5.27 AI Daily Report Crypto Assets market differentiation is obvious, multiple hot projects continue to strengthen.

I. Headlines

1. Su Network discloses details of the Cetus hacking incident: Vulnerability in third-party library leads to $2.6 billion loss

On May 22, the Sui ecosystem faced the most severe security threat in its history. The decentralized exchange Cetus Protocol suffered a devastating cyber attack, resulting in total losses exceeding $260 million. Sui Network recently released a detailed post-incident analysis report, revealing that this breach did not originate from vulnerabilities within Sui itself.

According to the report, the attacker exploited an undiscovered vulnerability in a third-party open-source math library used by Cetus, repeatedly executing liquidity removal operations to extract funds by depressing pool prices and injecting inflated liquidity. Throughout the attack process, the overflow checks and calculation functions of Cetus had flaws that failed to prevent this.

After the incident was exposed, the Sui Foundation quickly took countermeasures, including suspending the Cetus protocol and freezing funds in related addresses. At the same time, it announced an additional investment of $10 million to strengthen the security of the Sui chain and began discussions with Cetus on a compensation plan for the affected LPs.

This incident has once again sparked widespread attention in the industry regarding the security auditing of smart contracts. Analysts point out that even code that has undergone multiple rounds of audits may still contain potential vulnerabilities that can be exploited by attackers. Development teams need to strengthen their examination of third-party dependency libraries and conduct a comprehensive risk assessment. Meanwhile, the decentralized ecosystem needs to establish a more完善 compensation mechanism to protect user rights.

2. Trump Media explores $3 billion cryptocurrency financing, drawing market attention ahead of Bitcoin conference.

According to reports, Trump Media is exploring a $3 billion cryptocurrency financing plan. Although the company has denied the related news, the exposure ahead of the Bitcoin conference to be held in Las Vegas from May 27 to 29 undoubtedly exacerbates the market's sensitivity to headline risks.

The price of Bitcoin is fluctuating between $107,000 and $110,000. Analysis shows that the volatility has remained high recently, and traders are preparing for potential risk events ahead of the conference. The market's focus has shifted to the lineup of speakers, including members of the Trump family and advisors.

The Bitcoin conference held in Nashville last July caused significant volatility. At that time, President Trump's keynote speech led to an implied volatility spike of over 90%, and Bitcoin subsequently fell nearly 30% within two days. The uncertainty surrounding this conference may once again impact the market.

Although the likelihood of a significant pullback is low, market positioning shows a defensive tendency. In the past 24 hours, the open interest in perpetual contracts has decreased, and the funding rate has normalized. Some high-leverage retail traders, such as James Wen, have reduced their exposure, and the demand for short-term put options is attracting attention.

Analysts believe that once the conference concludes and the key speeches are over, the front-end volatility is expected to compress as the risk premium fades. Bitcoin is likely to continue fluctuating within a range in the short term.

3. Civitai uses cryptocurrency payments to bypass censorship restrictions on AI-generated 18+ content.

The world's largest AI sharing platform Civitai has switched to cryptocurrency payments after losing support from a credit card processor for AI-generated 18+ content. Users can pay with various cryptocurrencies through NowPayments, but Bitcoin is not included due to high fees.

Civitai encourages the use of USDC for fast transactions on Base, with no gas fees, and is compatible with most Ethereum wallets, with a fixed transaction fee of $1. The company is in talks with new card partners following the service suspension on May 23.

This move reflects the trend of NSFW platforms turning to cryptocurrency to avoid scrutiny from traditional financial systems. Analysts point out that the decentralization and anonymity of cryptocurrency make it an ideal choice for circumventing censorship, but it may also foster illegal content.

Industry regulatory authorities need to strengthen their oversight of such platforms and establish clear content review standards. At the same time, traditional financial institutions should also review their own inspection policies, ensuring the maintenance of public order and good customs while not excessively limiting the development space of innovative fields.

The cryptocurrency ecosystem needs to establish a self-discipline mechanism to actively purify the ecological environment. Only through the positive interaction between the industry itself, regulators, and traditional institutions can the healthy development of emerging technologies such as cryptocurrency and AI be promoted.

4. India's crypto industry lobbying for tax cuts, capital outflow prompting policy loosening

The Indian government has recently shown a positive attitude towards cryptocurrencies and is holding meetings with industry leaders. Due to the strict 30% capital gains tax, the industry has been seeking tax reductions to promote innovation.

Influenced by trade negotiations with the United States, India has become more open to cryptocurrencies, but the clarity of regulation remains uncertain. Analysts point out that the significant outflow of cryptocurrency trading from India is the main reason for the loosening of policies.

High tax rates and regulatory vacuums have led Indian cryptocurrency users and startups to shift their operations to cryptocurrency-friendly regions such as Singapore and Dubai. This not only affects the tax revenue of the Indian government but may also result in missed significant opportunities for future fintech development.

At the same time, the global cryptocurrency craze and the clear regulations of major economies have also put some pressure on India. Analysts believe that India needs to quickly improve its cryptocurrency regulatory framework to attract domestic and foreign capital and talent, avoiding falling behind in this emerging field.

In the future, whether India can secure a place in the cryptocurrency field will depend on whether the government can balance innovation with risk control, creating a favorable environment for industry development.

5. Uniswap trading volume surged 82% and the UNI price topped $6

Uniswap, a leading decentralized exchange, has been actively traded recently, and the price of the token UNI has also risen. Uniswap's 24-hour trading volume rose 82% to $5.73 billion, according to the data. The UNI token price broke through $6 and reached a market capitalization of $2.53 billion.

Analysts believe that despite the recent volatility of large-cap currencies such as Bitcoin and Ethereum, Uniswap is still favored as a leading DeFi project. Its unique decentralized model and innovative AMM mechanism provide users with a high degree of autonomy and security of funds.

Meanwhile, the Uniswap ecosystem is continuously expanding. Third-party applications are emerging one after another, bringing more functional choices for users. The DAO governance model of Uniswap has also attracted a large number of community members, effectively promoting its continuous innovation.

In the future, whether Uniswap can further increase its market share largely depends on its pace of improvements in areas such as scalability and Gas fees. The competitive landscape with Ethereum's Layer 2 scaling solutions is also worth paying attention to.

Overall, Uniswap is gradually occupying an irreplaceable position in the DeFi field due to its first-mover advantage and community autonomy characteristics. Its development trend will significantly influence the direction of the entire DeFi ecosystem.

2. Industry News

1. Bitcoin is fluctuating around $109,000, with the market focusing on inflation data.

Bitcoin prices have remained hovering at highs around $109,000 over the past 24 hours. Despite the stock market rally, Bitcoin reacted relatively restrained to macroeconomic data. Analysts believe this may be due to the fact that investors are waiting for Friday's core personal consumption expenditures (PCE) data, a key indicator of inflation for the Federal Reserve.

Despite the uncertainty, institutional demand for spot ETFs remains stable, providing underlying support for the market. BlackRock's ETF has seen net inflows for 30 consecutive days, reflecting ongoing interest from institutional investors in cryptocurrencies. However, the front-end implied volatility remains strong, indicating that traders are preparing for the upcoming Bitcoin conference, which is expected to bring headline risks.

Overall, the price of Bitcoin is consolidating within a high range, and the market is closely monitoring inflation data and significant events that could trigger price fluctuations. Investors need to remain vigilant, assess risks, and adjust strategies in a timely manner based on market changes.

2. Ethereum price breaks through $2,700, bullish sentiment heats up

Ethereum price broke through the key resistance level of $2,700 over the past 24 hours and is currently trading above $2,800. Trading volumes and inflows have increased significantly, reflecting the market's growing bullish sentiment towards Ethereum.

Analysts point out that the price of Ethereum is fluctuating between the rising support and the fixed resistance near $2,800, indicating that bulls are accumulating positions. The RSI indicator has risen above 40, suggesting that buying power is increasing, which may soon push Ethereum to break through the $2,800 resistance. Once broken, the next target could be the historical high of $3,200.

Traders are closely watching the resistance level at $2,800, as a breakout could trigger further upward momentum. However, some analysts warn that Ethereum may face the risk of profit-taking, advising investors to remain cautious and manage their risk exposure. Overall, Ethereum's upward trend continues, but investors need to closely monitor changes in technical indicators and market sentiment.

3. The Sui ecosystem has suffered a hacker attack, and the foundation has allocated $10 million to enhance security.

The Sui ecosystem recently experienced a serious hacking incident, resulting in a loss of over $260 million for the decentralized exchange Cetus Protocol. The Sui network released a post-incident analysis report, revealing that the main reason for the attack was an issue with the mathematical library used by Cetus, rather than a security vulnerability in Sui itself.

To rebuild community confidence, the Sui Foundation announced an additional investment of $10 million to enhance the security of the Sui chain, including the initiation of additional audits and strengthening on-chain monitoring measures. At the same time, Cetus is collaborating with security teams and auditing institutions to re-examine contracts and conduct multi-party joint audits to ensure a secure restoration of services after verification is completed.

This incident has raised concerns in the market about the security of the Sui ecosystem, leading to a significant drop in Sui and related tokens over the past 24 hours. Analysts state that although the Sui Foundation has taken proactive measures, prices may continue to be under pressure in the short term. Investors need to closely monitor the progress of the event, assess risks, and wait for further confidence to be rebuilt.

4. The cryptocurrency market shows differentiation, with some popular projects continuing to strengthen.

Despite Bitcoin and Ethereum remaining relatively stable over the past week, the cryptocurrency market has shown a clear trend of divergence. Some popular projects and ecosystems continue to strengthen, while others have experienced pullbacks.

Among them, the HYPE token of the Hyperliquid ecosystem surged nearly 40% in the past 24 hours, becoming the 11th ranked cryptocurrency by market capitalization, surpassing Chainlink and Sui. Analysts believe that the innovative products and strong development momentum of the Hyperliquid ecosystem are the main reasons driving the rise in HYPE prices.

At the same time, tokens in the Solana ecosystem, such as SEND, HIPPO, and BLUE, have also performed well, with varying degrees of increase. This reflects investors' optimistic attitude towards the development prospects of the Solana ecosystem.

However, there have been some popular projects experiencing pullbacks. For example, after the SUI ecosystem suffered a hacker attack, SUI and related tokens such as CETUS and SUIA all saw significant declines. In addition, well-known altcoins like Dogecoin and Ripple also experienced noticeable profit-taking.

Analysts say that this divergence trend reflects investors' different expectations for various projects and ecosystems. Investors need to closely monitor the development dynamics of projects, assess risks and opportunities, and make investment decisions based on their own judgment.

5. Whale trading is active, attracting market attention.

Recently, the large-value trading activities of some whale addresses have attracted widespread attention in the market. Among them, a well-known whale address added $4 million worth of WETH/EIGEN liquidity on Uniswap, which is more of a spot bet than providing usable pool depth.

Another whale has purchased $29.14 million worth of AAVE tokens in the past week, currently holding nearly $70 million worth of AAVE. Additionally, renowned trader James Wynn has increased his Bitcoin long positions again in the past few days, with a total position value now reaching $622 million.

Analysts say that large trading activity at whale addresses is often seen as a leading indicator of market sentiment. When a whale increases its position, it may signal a rise in bullish sentiment; And when whales reduce their holdings, it may mean profit-taking or a decrease in risk appetite.

Therefore, investors need to closely monitor the movements of these whale addresses, combined with other technical and fundamental indicators, to assess market sentiment and potential price trends. At the same time, it is also necessary to be aware of the liquidity shocks and price volatility risks that whale transactions may bring.

Overall, the cryptocurrency market has shown a diverging trend over the past week, with some popular projects continuing to strengthen while others have experienced pullbacks. Investors need to closely monitor market dynamics, assess risks and opportunities, and make investment decisions based on their own judgment. At the same time, attention should also be paid to the impact of whale trading activities on market sentiment and price trends.

3. Project News

1. The Sui ecosystem has encountered a major security incident, and the foundation has announced a $10 million security plan.

The Sui ecosystem recently suffered a devastating cyber attack. The decentralized exchange Cetus Protocol was hacked, resulting in the theft of over $260 million in assets. The root of the incident was a vulnerability in Cetus's own mathematical library, rather than a security issue with Sui or the Move language itself.

In response to this incident, the Sui Foundation announced that it will invest an additional $10 million to strengthen the security of the ecosystem. This funding will be used for audits, a bug bounty program, formal verification, and several other aspects, with specific measures to be discussed and determined in collaboration with the developer community. The Sui team stated that although this incident has had a serious impact on users, they remain firmly supportive of developers and are committed to ensuring the security of applications.

This incident has triggered widespread attention and discussion within the industry regarding the security of the Sui ecosystem. Analysts believe that although there are no significant vulnerabilities in the Sui technology itself, the rapid development of the ecosystem and the increased participation of developers pose new challenges to security. Sui needs to strengthen the auditing of third-party libraries and external dependencies, and establish a more comprehensive security mechanism.

On the other hand, some voices point out that this incident reflects the systemic risks that still exist in the cryptocurrency field. Even leading public chain ecosystems find it difficult to completely avoid hacker attacks and vulnerabilities. The industry needs to further strengthen security awareness, improve transparency, and establish stronger regulatory mechanisms to protect user interests.

2. Uniswap trading volume surges, whales increase liquidity by $400 million.

The leading decentralized exchange Uniswap has recently seen active trading, with significant increases in both trading volume and liquidity. Data shows that Uniswap's trading volume increased by 82% in the past 24 hours. Meanwhile, a whale address has added approximately $400 million worth of WETH/EIGEN liquidity pair on Uniswap.

According to analysts, the rise in Uniswap trading volume reflects increased activity in the cryptocurrency market. The Ethereum ecosystem is continuing to heat up, and investors' attention to DeFi and other fields is increasing. At the same time, Uniswap, as a leader, maintains its advantage in terms of user experience and decentralization, so it attracts a lot of liquidity and trading activity.

It is worth noting that the liquidity added by the aforementioned whale addresses is located outside the active price range of Uniswap, resembling a spot bet rather than providing available pool depth. When liquidity is situated outside the trading range, the actual amount of available liquidity is significantly lower than the total liquidity, so traders need to be cautious of potential price impact risks.

Overall, the increased activity in the Uniswap ecosystem is seen as a positive sign of development. Analysts expect that as regulations become clearer and user education improves, it will attract more liquidity and trading activity, playing an increasingly important role in cryptocurrency trading.

3. ASI-1 Mini makes its debut, ushering in a new era of We's native large language models.

The ASI-1 Mini launched by Fetch is hailed as the first We-native large language model, marking the arrival of a new stage in the integration of AI and blockchain. The ASI-1 Mini adopts a hybrid model architecture of MoM and MoA, featuring transparency and scalability, while also demonstrating excellent performance in hardware efficiency.

As a community-driven language model, the release of ASI-1 Mini fills the gap in the integration of We and AI. It can play a role in many fields such as healthcare, finance, and law, providing powerful natural language processing capabilities for decentralized applications. Different from traditional closed language models, ASI-1 Mini has open training data and model parameters, which can be used by anyone for secondary development and customized training.

It is worth noting that the emergence of ASI-1 Mini signifies that AI is developing towards transparency, decentralization, and assetization. In the future, blockchain-based AI models may become a new type of digital asset, which users can own, trade, and appreciate in value. This will open new avenues for the development of AI and promote the decentralized distribution of computing power and data.

Analysts believe that ASI-1 Mini is the beginning of We's native AI, signaling the deep integration of AI with blockchain technology. As more innovative applications emerge, AI is expected to play an increasingly important role in the cryptocurrency field, bringing new possibilities to scenarios such as decentralized finance and smart contracts.

4. The Solana ecosystem is showing new momentum, with multiple innovative projects attracting attention.

Despite experiencing a period of downturn, the Solana ecosystem has recently shown new development momentum. The addition of several innovative projects and fresh blood has brought new vitality and expectations to Solana.

At the recently concluded TOKEN2049 conference, the Solana ecosystem was undoubtedly in the spotlight. According to statistics, nearly half of the attendees were first-time participants, reflecting the continuous growth of the Solana community. At the same time, a number of new innovative projects have emerged on Solana, such as Cub and FlashTrade, bringing more interesting ideas and applications to Solana.

Analysts point out that the continuous innovation of the Solana ecosystem is the key to its vitality. Although it was once thought that there were not many projects worth looking forward to, this is not the case. New developers continue to join Solana, injecting new momentum into this ecosystem.

At the same time, the correlation between the Move language and Rust has brought new opportunities to the Solana ecosystem. Some projects originally based on Solana, such as Solend, have begun to experiment on Move ecosystems like Sui, and this cross-ecosystem communication helps foster mutual learning and innovation.

Overall, the Solana ecosystem is revitalizing and attracting more attention. Analysts believe that as long as Solana can continue to innovate and maintain an open ecosystem, it is expected to play an important role in the future development of cryptocurrencies.

5. Social media has become a new hot track, with innovative applications continuously emerging.

After experiencing a period of downturn, the We social field has once again become a focal point of attention in the cryptocurrency industry. During the TOKEN2049 conference, several innovative projects shared their attempts and thoughts in this sector, sparking widespread discussion within the industry.

We Social is seen as an important attempt of blockchain technology in consumer-level applications. Compared to complex financial applications like DeFi, We Social is closer to the everyday life scenarios of ordinary users and is expected to become a breakthrough for the large-scale application of blockchain technology.

At the conference, Korean entrepreneurs from the Warpcast ecosystem, such as Taki and Yawn, who previously launched mobile applications, shared their unique insights on We Social. They discussed how to make social applications interesting and sustainable through innovative models like "Connect to Earn," avoiding the collapse of the ecological economy.

Analysts believe that despite some setbacks in the past, the track is still full of imagination and opportunities for innovation. As long as we can continue to innovate and find a suitable business model and user incentive mechanism, We Social will surely become an important application scenario of blockchain technology.

At the same time, there are voices reminding us that We social needs to be wary of excessive hype and short-sighted behavior. Entrepreneurs should focus on long-term value creation rather than pursuing temporary traffic and financing. Only by truly addressing user pain points and continuously iterating on products can We social ultimately achieve success.

Overall, We Social has once again become a hot topic in the cryptocurrency space, indicating that this track will usher in a new wave of innovation. We look forward to more excellent projects and applications coming out in the future to promote the popularization of blockchain technology.

4. Economic Dynamics

1. The US tariff policy has attracted global attention.

Economic Background: The pace of global economic recovery is slowing, with major economies experiencing a deceleration in GDP growth. The annualized quarter-on-quarter GDP growth for the United States in the first quarter was 1.1%, below expectations. Inflationary pressures remain, with the U.S. CPI in April rising 4.9% year-on-year, slightly higher than expected. The employment market remains robust, with the unemployment rate falling to 3.4% in April.

Important Events: The U.S. government announced a delay in imposing tariffs on certain imported goods to avoid further increasing inflation levels. Previously, the United States had repeatedly threatened to impose tariffs on China, the European Union, and other major trading partners to protect domestic industries. This move has attracted global attention, raising concerns that trade disputes may intensify and further hinder economic growth.

Market Reaction: Investors have differing views on the direction of U.S. tariff policies. On one hand, delaying additional tariff increases is beneficial for alleviating inflationary pressure and supporting economic growth; on the other hand, the trade disputes have not been completely resolved, and there are still uncertainty risks. U.S. stocks rose slightly, and the dollar index fell slightly.

Expert Analysis: Goldman Sachs analysts stated that the U.S. delay in increasing tariffs is a stopgap measure and does not mean that the trade tensions have been completely alleviated. If the trade disputes escalate in the future, it will further exacerbate disruptions in the global supply chain, raising production costs and price levels. U.S. economist Norman believes that the U.S. should reach agreements with major trading partners to jointly uphold the free trade order and promote global economic recovery.

2. Japan loses its status as the world's largest creditor nation.

Economic Background: Japan's economic recovery is weak, with an annualized quarter-on-quarter GDP growth of only 1.6% in the first quarter, below expectations. Inflationary pressures are rising, with the CPI in April increasing by 3.5% year-on-year, hitting a nearly 42-year high. The job market remains stable, with the unemployment rate hovering around 2.6%.

Key Events: For the first time in 34 years, Japan lost its position as the world's largest creditor and was overtaken by Germany. According to the data, at the end of 2022, Japan's external debt balance was $3.24 trillion, and Germany's was $3.26 trillion. This change reflects the relative decline in Japan's economic strength and sluggish asset growth.

Market reaction: The yen has slightly depreciated against the US dollar. Investors are concerned about the outlook for the Japanese economy, with increased pressure from foreign capital outflows. The Tokyo stock market has declined, with the Nikkei 225 index falling by 0.9%. Bond yields have risen slightly, with the yield on 10-year government bonds increasing to 0.41%.

Expert Analysis: Goldman Sachs analysts said that Japan's loss of the status of the largest creditor reflects the lack of economic vitality and sluggish growth. Haruhiko Kuroda, former governor of the Bank of Japan, believes that Japan should accelerate the pace of structural reforms, improve productivity and competitiveness, and attract foreign capital inflows. Nomura analysts pointed out that Japan's current account surplus continues to decline, which may further weaken the yen's position.

3. The President of the European Central Bank warns that the dominance of the dollar is shaking.

Economic Background: The eurozone's economic recovery is slowing, with GDP growth of 1% year-on-year in the first quarter, below expectations. Inflation remains high, with the CPI rising by 7% year-on-year in April, well above the 2% target. The labor market remains robust, with the unemployment rate holding steady at around 6.5%.

Important event: European Central Bank President Christine Lagarde stated in a speech that the dollar's position as the world's dominant currency is under threat. She pointed out that the rise of digital currencies and other emerging payment methods in recent years is weakening the dollar's dominance in international payments and as a reserve currency.

Market reaction: The Euro to US Dollar exchange rate rose slightly. Investors have doubts about the long-term outlook for the US Dollar's status. European stock markets rose slightly, with the STOXX Europe 600 index up 0.3%. European bond yields fell slightly, with the German 10-year government bond yield down 2 basis points to 2.53%.

Expert analysis: Goldman Sachs analysts said that the dominance of the dollar is difficult to replace in the short term, but it does face challenges in the long run. The development of digital currencies and new payment methods will decentralize international payments and reserves, weakening the dollar's influence. Deutsche Bank analysts believe that the internationalization of the euro is expected to increase further, which is conducive to boosting the position of the euro. But only if the eurozone economy remains strong and monetary policy is firm.

4. India's cryptocurrency policy is becoming more lenient.

Economic Background: India's economy continues to grow rapidly, with a year-on-year GDP growth of 6.1% in the first quarter. Inflationary pressures are significant, with the CPI rising 4.7% year-on-year in April, exceeding the Reserve Bank of India's target range of 4%. The job market continues to improve, with the unemployment rate in urban areas dropping to 7.6%.

Important event: The Indian government's policy towards cryptocurrencies tends to be accommodative. Previously, India imposed a 30% capital gains tax on cryptocurrencies, sparking discontent in the industry. Recently, the Indian government held a meeting with industry leaders to discuss measures such as reducing tax rates to promote cryptocurrency innovation.

Market Reaction: The trading volume of cryptocurrency exchanges in India has significantly increased. The number of users and trading volume of well-known exchanges and Kuber have both seen substantial growth. Cryptocurrency prices have slightly risen, with the Bitcoin to Rupee exchange rate increasing by nearly 2%.

Expert Analysis: Citigroup analysts have stated that India's easing of cryptocurrency regulations is beneficial for attracting international capital and promoting fintech innovation. However, there is also a need to strengthen risk control and prevent illegal activities such as money laundering. The chairman of the Indian IT Alliance pointed out that lowering tax rates will help retain talent and prevent the outflow of cryptocurrency startups. Nonetheless, a comprehensive regulatory framework still needs to be established to protect investors' rights.

5. China Releases New Policies on Artificial Intelligence

Economic Background: China's economic growth slowed, with GDP rising 4.5% year-on-year in the first quarter, which was lower than expected. Inflationary pressures were modest, with CPI rising 0.1% year-on-year in April. The job market came under downward pressure, with the surveyed urban unemployment rate rising to 5.8% in March.

Important events: The Ministry of Education of China and eight other departments jointly issued the "Implementation Opinions on Accelerating the Digital Transformation of Education," proposing 22 policy measures to accelerate the digitalization of education and promote the role of artificial intelligence in educational reform.

Market Reaction: The stock prices of AI-related listed companies generally rose. iFLYTEK shares surged 6.7%, SenseTime rose 4.9%, and YITU rose 4.1%. The artificial intelligence education track is favored by funds, and education stocks have also seen a general rise.

Expert Analysis: Analysts from Zhongjin Company have stated that policy dividends are expected to drive the rapid development of the artificial intelligence education industry, bringing growth momentum to related enterprises. However, it is also necessary to be wary of the risk of intensified homogenization competition. Analysts from Guotai Junan believe that artificial intelligence education will become an important direction for future educational reform, likely promoting supply-side reform in education and improving the quality and efficiency of education.

5. Regulation & Policy

1. The crypto industry groups urge the U.S. SEC to clarify its stance on staking regulation.

Policy Background: The U.S. Securities and Exchange Commission (SEC) is the federal agency responsible for regulating the securities market, and its scope of regulation also covers the cryptocurrency space. With the rise of the cryptocurrency staking business, the industry expects the SEC to clarify the relevant regulatory policies.

Policy Content: The Crypto Council for Innovation, a group in the cryptocurrency industry, calls on the SEC to issue formal guidance on staking operations. Allison Muehr, the group's head of staking policy, stated that infrastructure providers currently face ongoing regulatory uncertainty, and the SEC needs to clarify its regulatory stance on staking. Muehr emphasized that although interactions between the SEC and the industry have increased, formal staking guidance has yet to be obtained.

Market Response: The cryptocurrency staking business has developed rapidly in recent years and has become an important part of the DeFi ecosystem. However, due to the lack of clear regulatory policies, some companies have doubts about compliance. The industry expects the SEC's guidance to create a clearer regulatory environment for the staking business.

Expert Opinion: The Crypto Council for Innovation believes that a clear regulatory framework will be conducive to the healthy development of the staking business. The group called on the SEC to maintain close communication with the industry and develop realistic regulatory policies. Industry insiders said that reasonable regulation will promote innovation and protect the rights and interests of investors.

2. Thailand embraces cryptocurrency and introduces new travel spending options

Policy Background: Thailand is one of the world's popular tourist destinations, and tourism is an important pillar of its economy. To attract more visitors and promote financial innovation, the Thai government is taking a series of measures, including allowing tourists to use cryptocurrency for consumption.

Policy Content: Thai Deputy Prime Minister and Finance Minister Pichai Chunhavajira announced that the government is reviewing a plan that allows tourists to use cryptocurrencies through a credit card-linked platform. Tourists can link their cryptocurrency assets to credit cards for local spending, while merchants will receive Thai Baht. The pilot project will be launched after key infrastructure and regulatory checks are in place.

Market Reaction: This initiative aims to promote cryptocurrency payments while avoiding the direct use of the Thai baht, reducing the risks associated with the domestic currency. Cryptocurrency companies and investors welcome this, believing it will drive the adoption of cryptocurrencies in real-world applications.

Expert Opinion: Vijitra Thanapanithi, head of the digital currency department at the Bank of Thailand, stated that the central bank is researching the application of cryptocurrencies in the payment sector. She believes that cryptocurrencies offer convenience and cost-effectiveness, but an appropriate regulatory framework needs to be established to manage risks.

3. The Hong Kong "Stablecoin Regulation Draft" has been passed, leading a new era of regulation.

Policy Background: As an international financial center, Hong Kong has been making continuous efforts in the virtual asset sector in recent years. To regulate the issuance and management of stablecoins, the Legislative Council of the Hong Kong Special Administrative Region passed the "Stablecoin Bill" on May 21.

Policy Content: The bill establishes the world's first comprehensive regulatory framework for fiat-backed stablecoins in Hong Kong. The main points include: clarifying the definition and classification of stablecoins, regulating the qualifications and responsibilities of stablecoin issuers, requiring stablecoins to be fully or partially backed by Hong Kong dollars or other legal tender, and establishing a reserve fund system, among others. The bill will come into effect in June 2024.

Market Reaction: Industry insiders generally believe that the bill provides a clear legal framework for Hong Kong's virtual asset industry, which is conducive to attracting more stablecoin issuers and related businesses to settle in Hong Kong. At the same time, reasonable regulation will also enhance investor confidence.

Expert Opinion: Financial law experts in Hong Kong stated that the bill, by balancing financial innovation with risk control, has brought positive effects to the development of the virtual currency industry in Hong Kong and mainland China. Experts believe that Hong Kong's pioneering position in stablecoin regulation will further solidify its status as an international financial center.