Hong Kong’s First Crypto Futures EFTs Raise $73.6M Ahead of Launch

<p class="MsoNormal text-align-justify">CSOP Asset Management, an investment advisor based in Hong Kong, will launch Bitcoin and Ether futures exchange-traded funds (ETS) on the Hong Kong Stock Exchange on Friday. However, ahead of their debut, the ETFs have raised a combined $73.6 million, with the Bitcoin futures ETF alone accounting for $53.9 million, Reuters reports. </p><p class="MsoNormal">In October last year, the United States’ first Bitcoin-linked futures EFT launched with a seed capital of $20 million after <a href="https://www.financemagnates.com/cryptocurrency/bitcoin-etf-launched-3-things-you-must-know/" target="_blank" rel="follow">approval</a> by the United States Securities and Exchange Commission.</p><p class="MsoNormal">Hong Kong Crypto Raise to Invest in Bitcoin and Ether Futures</p><p class="MsoNormal">The new ETFs, which are expected to be launched at HK$780 per unit, will invest in Bitcoin and Ether futures listed on the Chicago Mercantile Exchange in the United States. Bitcoin and Ether are currently the only digital assets approved by Hong Kong’s Securities and Futures Commission (SFC). </p><p class="MsoNormal">Check out this recent Finance Magnates London Summit 2022 session on the crypto market structure.</p><p class="MsoNormal">The launch of the crypto ETFs come less than two months after the SFC <a href="https://www.financemagnates.com/cryptocurrency/regulation/hong-kong-decides-on-rules-for-crypto-etfs/" target="_blank" rel="follow">decided to permit crypto EFTs</a> in Hong Kong, diverging from the blanket ban on all crypto investments obtainable in mainland China. The Commission had said only virtual asset futures traded on conventional regulated exchanges would be permitted, with Bitcoin and <a href="https://www.financemagnates.com/cryptocurrency/news/cme-group-launches-ethereum-futures-contracts/" target="_blank" rel="follow">Ether futures</a> traded on CME getting the first go-ahead.</p><p class="MsoNormal">Additionally, the securities regulator previously <a href="https://www.financemagnates.com/cryptocurrency/hong-kong-set-to-legalize-crypto/" target="_blank" rel="follow">expressed the intention</a> to open up crypto trading services to retail customers in March 2023 to attract talent to the autonomous jurisdiction.</p><p class="MsoNormal text-align-justify">Crypto Market Upheaval</p><p class="MsoNormal">The expected launch of Hong Kong’s first crypto futures ETF comes in a year the cryptocurrency industry has been weighed down by big blows, the latest being <a href="https://www.financemagnates.com/cryptocurrency/ftx-the-rise-the-fall-and-the-reaction/">the collapse</a> and <a href="https://www.financemagnates.com/cryptocurrency/troubled-ftx-files-for-bankruptcy-as-ceo-bankman-fried-resigns/">bankruptcy</a> of the crypto exchange, FTX. On top of that, in August, Bitcoin deposits on exchanges collapsed to <a href="https://www.financemagnates.com/cryptocurrency/news/btc-exchange-deposits-reach-the-lowest-level-in-2-years/">a two-year low</a>. In addition, the global market capitalization of the crypto industry sank below $1 trillion, which is down from a market cap of over $2 trillion at the start of the year. </p><p class="MsoNormal">However, despite these trends, <a href="https://www.financemagnates.com/cryptocurrency/institutions-stick-to-crypto-despite-market-upheaval-in-2022/" target="_blank" rel="follow">a new study by Eurex</a>, one of the world’s largest derivatives exchanges, found that institutional adoption of cryptocurrency is still on track this year. </p> This article was written by Solomon Oladipupo at www.financemagnates.com.

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Crypto Exchange Digitex Ordered to Pay $16M Following CFTC Charges

A US court has ordered Adam Todd to pay approximately $16 million for operating an unregistered crypto exchange Digitex Futures. The amount includes $11.7 million in civil monetary penalty and $3.9 million as the return of illicit profit.

Court Slams Trading Ban on Digitex Founder

Judge Roy K. Altman of the US District Court for the Southern District of Florida delivered the judgement on July 5, the Commodity Futures Trading Commission (CFTC) announced today (Wednesday). Judge Altman also banned Todd and four companies he controlled from registering with the CFTC or engaging in any trading activities overseen by the US derivatives regulator.

CFTC in September last year charged Todd and his digital asset derivatives trading firm, alleging that the exchange between May 2020 and May 2022 operated an unauthorized trading platform from a Florida-based office. The derivatives watchdog also accused the Digitex Founder of attempting to manipulate the price of the exchange’s native token, DGTX. In addition, it considers the token to be a 'commodity’ in interstate commerce.

“According to the complaint, throughout the summer of 2020—the time when the exchange was readying for ‘launch’—Todd repeatedly attempted to, in his words, ‘pump’ the price of DGTX as reported by third-party exchange,” CFTC explained.

Furthermore, CFTC alleged that Digitex failed to establish a customer information program, know-your-customer policies and anti-money laundering procedures.

“This case demonstrates that regardless of the technology used, the CFTC will aggressively use its well-established authority to ensure entities are lawfully registered and to address the manipulation of commodities in interstate commerce,” noted Ian McGinley, Director of CFTC’s Division of Enforcement.

Court Orders LBRY to Pay $111K

Meanwhile, a district court in New Hampshire yesterday ordered LBRY, a blockchain-based file-sharing and payment network, to pay $111,614 in civil penalty for operating without registration, the US Securities and Exchange Commission (SEC) disclosed in a statement released on today. The securities regulator sued LBRY in March 2021, alleging that the firm was running an unauthorized platform and offering unregistered securities.

SEC initially asked the court to slam a $22 million penalty on LBRY for allegedly pooling $11 million from its unauthorized activities. However, the securities watchdog in May requested that the court reduce the amount to $111,614, because the firm was “defunct, ceasing operations, and without the funds to pay a larger fine.”

“In November 2022, the court granted summary judgment in favour of the SEC, holding that LBRY offered and sold LBC in violation of Section 5 of the Securities Act of 1933, the registration provisions of the federal securities laws,” SEC explained in the statement. “The court rejected LBRY's claim that it lacked fair notice of the application of those laws to its offer and sale.”

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