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On 14 October 2024, the Hong Kong’s Securities and Futures Commission (HK SFC) announced the appointment of Dr. Kelvin Wong Tin-yau as its new Chairman for a three-year term, starting on 20 October 2024. Dr. Wong will succeed Mr. Tim Lui, who will step down on 19 October 2024, after serving a successful six-year term. Dr. Wong brings a wealth of experience in financial regulations and capital market development to this leadership role. He is currently the Chairman of the Hong Kong’s Accounting and Financial Reporting Council (AFRC), a body that collaborates closely with the HK SFC to ensure the high standards and integrity of Hong Kong’s financial markets. He will continue in this AFRC position until 31 December 2024. Dr. Wong is no stranger to the HK SFC. Between 2012 and 2018, he served as a Non-Executive Director of the Commission and also chaired the Investor Education Centre (now known as the Investor and Financial Education Council) from 2017 to 2018. His deep knowledge of the...

On 14 October 2024, Monochrome Asset Management launched Australia’s first spot Ethereum exchange-traded fund (ETF), IETH, on Cboe Australia, marking a significant advancement in the nation's cryptocurrency investment landscape. The IETH ETF offers unique in-kind Ethereum subscriptions and tax efficiencies via a bare trust structure. The launch follows Monochrome's successful Bitcoin ETF (IBTC) debut in 2023, which has already garnered $15 million in assets. Trading for IETH is set to begin on 14 October 2024. This new ETF will allow investors direct exposure to Ethereum (ETH), providing a tax-efficient investment option. This launch builds on the success of Monochrome’s Bitcoin ETF (IBTC), introduced in August 2023, which has amassed $15 million in assets under management. The IETH ETF has been designed with a unique structure. Unlike U.S.-based ETFs, it features in-kind subscriptions and redemptions, where investors can contribute or redeem Ethereum directly from the fund without...

On 11 October 2024, the Australian Securities and Investments Commission (ASIC) published Report 797, titled Licensing and Professional Registration Activities: 2024 Update. The report outlines ASIC's licensing and registration activities over the 2023–24 financial year, providing insights for Australian Financial Services (AFS) licensees, credit licensees, auditors, service providers, and other professionals in the financial services sector. This report also covers ASIC’s performance in processing 1,531 licensing and registration applications from July 2023 to June 2024, marking a 2% increase from the previous year. ASIC finalised 874 AFS licence applications and 372 credit licence applications, reflecting slight decreases from the previous year. The report also discusses regulatory actions, including cancellations and suspensions of 239 AFS licences and 204 credit licences. In addition to addressing general licensing trends, ASIC outlines several reforms and amendments set to...

On 10 October 2024, the Singapore Police Force and the Monetary Authority of Singapore issued a joint advisory alerting the public to a surge in scams where perpetrators impersonate bank officers and government officials. The scam variant has seen at least 100 reported cases in September 2024, resulting in a total financial loss of $6.7 million. The advisory also outlines the method and practices used by the scammers to educate the public and provide precautionary steps for the public to avoid falling victim to such scams. The Singapore’s advisory describes how victims fall for such scams. In a scam which begins with an unsolicited phone call to potential victims, and the scammer is impersonating a bank officer from major Singaporean banks, such as DBS, OCBC, UOB, or Standard Chartered Bank. The scammer typically claims that either suspicious activities or unauthorized transactions have been detected in the victim’s bank account, prompting them to verify these transactions. When the...

On 4 October 2024, the United States Commodity Futures Trading Commission issued a supplemental no-action letter in response to a request from KalshiEX LLC and Kalshi Klear LLC, which grants exemptions to Kalshi and its clearing organisations, specifically Kalshi Klear LLC and LedgerX LLC, regarding compliance with provisions of the United States Commodity Exchange Act and United States CFTC regulations. The relief provided in this letter is an extension of a previous no-action letter issued in 2021 and exempts changes in Kalshi’s clearing operations, as the firm transitions from clearing contracts through LedgerX to Kalshi Klear LLC. The no-action relief granted by the United States CFTC offers Kalshi and its clearing entities exemptions from various reporting and recordkeeping requirements under United States regulations, including those specified in United States CFTC Regulations 38.8(b), 38.10, 38.951, and 39.20(b)(2), as well as Parts 43 and 45 of the United States CFTC...

On 10 October 2024, the United States Securities and Exchange Commission sought to initiate legal proceedings against Cumberland DRW LLC, a crypto liquidity provider operating through its trading platform Marea. The complaint, filed in the United States District Court for the Northern District of Illinois, alleges that Cumberland has been engaging in the unregistered sale of securities in the form of crypto assets since at least March 2018. These actions, the United States SEC claims, constitute violations of Section 15(a) of the United States Securities Exchange Act of 1934. The SEC asserts that by trading billions of dollars worth of crypto assets as securities without registering as a securities dealer, Cumberland deprived investors of the protections afforded under United States securities laws, which are designed to ensure transparency, oversight, and accountability in the marketplace. Cumberland DRW LLC, the firm at the centre of the United States SEC’s allegations, is a...

On 9 October 2024, the U.S. Securities and Exchange Commission (SEC) filed a complaint against ZM Quant Investment Ltd., Baijun Ou, and Ruiqi Lau, in the United States District Court for the District of Massachusetts, alleging market manipulation of crypto assets and demanding a jury trial. In its complaint, the US SEC alleges that ZM Quant Investment Ltd. and its principals, Baijun Ou and Ruiqi Lau, manipulated crypto asset markets by artificially inflating the price and trading volume of various tokens. According to the SEC, these actions misled investors and created the illusion of robust market activity, while in reality, ZM Quant was engaging in wash trading and other manipulative practices. The SEC's complaint further outlines how ZM Quant's actions harmed market integrity and defrauded investors. The SEC seeks permanent injunctions, disgorgement of profits, civil penalties, and a ban on the defendants' participation in the securities markets, excluding personal trading. From...

On October 9, 2024, the United States’ Securities and Exchange Commission (US SEC) filed a complaint against CLS Global FZC LLC and Andrey Zhorzhes, in the United States District Court for the District of Massachusetts, alleging a complex market manipulation scheme involving cryptocurrency assets. The SEC claims that CLS Global, which presents itself as a "market maker" for crypto assets, was, in fact, engaging in deceptive practices designed to artificially inflate the trading volume and prices of its clients' crypto assets, thereby misleading investors. Central to this case is the allegation that between August 23, 2024, and September 18, 2024, CLS Global conducted manipulative trades on the Uniswap platform, generating $595,000 in artificial trading volume for a crypto asset known as NexFundAI, which accounted for 98% of the total trading activity during that period. The lawsuit details how CLS Global advertised its services as offering advanced trading algorithms and...

On 25 September 2024, the South Korean Financial Services Commission (SK FSC) announced its authorization of the digital asset industry’s plan to create the Digital Asset Protection Foundation, an entity aimed at safeguarding users’ assets in the event of virtual asset service providers shutting down. This initiative, led by the Digital Asset Exchange Association (DAXA) aims to move toward protecting virtual asset users’ rights and maintaining stability in the market. The foundation will be responsible for receiving, managing, and securely returning users’ assets that were previously held by defunct exchange service providers after a structured consultation process. The establishment of this foundation comes in response to growing concerns about the ability of VASPs to return users’ assets following business closures. Despite previous efforts by financial authorities, such as issuing guidelines for VASP closures and conducting inspections on closed exchanges, the lengthy and complex...

On 4 October 2024, the Monetary Authority of Singapore (MAS) publishes a Consultation Paper on Proposed Regulatory Approach, Regulations and Notices for Digital Token Service Providers issued under the Financial Services and Markets Act 2022 outlining the proposed regulatory framework for Digital Token Service Providers (DTSPs). This new consultation paper is issued under the Singapore’s Financial Services and Markets Act 2022 (FSM Act) which aims to ensure proper regulation of DTSPs providing services from or within the Singapore to customers inside and outside the country. The public is invited to provide feedback on these proposals, with submissions open until 4 November 2024. The consultation paper introduces amendments to regulate the activities of DTSPs focusing on their operations abroad to prevent risks related to money laundering and terrorism financing, which are heightened in cross-border digital services. The consultation paper mandates the DTSPs to apply for a license...

On 2 October 2024, Hong Kong Virtual Asset Exchange (HKVAX) officially announced that it had obtained Type 1 (dealing in securities) and Type 7 (providing automated trading services) licenses from the Hong Kong’s Securities and Futures Commission (HK SFC), along with a license under the Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). This development makes HKVAX the third regulated virtual asset platform in Hong Kong, joining the ranks of HashKey Group and OSL, which are currently the only operators permitted to serve retail customers in the territory. HKVAX was established with a strong focus on combining traditional financial services with blockchain technology, providing a wide array of virtual asset services. These include over-the-counter (OTC) trading, a 24/7 trading platform, and asset custody with advanced security features such as multi-signature technology and wallet separation. The platform has a particular emphasis on Security Token...