6.28 AI Daily Report: Hong Kong legislates to regulate virtual assets, the US accelerates the advancement of Crypto Assets regulation.

1. Headline

1. Hong Kong officially legislates to regulate virtual asset trading and custody services.

The Hong Kong Securities and Futures Commission and the Financial Secretary's Office announced a consultation document proposing legislation to establish a licensing system for virtual asset trading and custodial service providers. The document mentions that whether it is as simple as virtual currency trading, withdrawals, and exchanges for fiat currency, or as complex as brokerage activities and large transactions, all must apply for a license from the Securities and Futures Commission, effectively bringing over-the-counter trading platforms for virtual assets under regulation.

The new regulations require stricter compliance than last year's consultation regarding the requirements for virtual asset over-the-counter trading platforms to apply for licenses from customs. The minimum paid-in capital for trading service providers must be 5 million yuan, while for custodians it is 10 million yuan. Additionally, there must be two responsible personnel approved by the securities regulatory authority. Operating without a license can result in a maximum sentence of 7 years in prison.

Analysis indicates that Hong Kong, as an international financial center, marks a formal inclusion of virtual assets into the regulatory framework, which is beneficial for the long-term development of the industry. However, industry entities need to prepare for compliance, as they may face higher operational costs in the future. Overall, standardized regulation will enhance the transparency and credibility of Hong Kong's virtual asset industry, attracting more institutions and capital.

2. Trump criticizes the Federal Reserve for raising interest rates too quickly, calling for Powell to resign.

Former U.S. President Trump spoke at a White House press conference about the aftermath of his shooting incident and other issues. He criticized Federal Reserve Chairman Powell, stating that his actions in the coming years would harm American national interests, and called for his resignation.

Trump pointed out that Powell's rapid interest rate hikes have inflicted a heavy blow on the U.S. economy. He believes that the Federal Reserve should slow down the pace of interest rate increases, otherwise it will lead the U.S. into a recession. Trump also stated that if he returns to the White House, he will immediately terminate all trade negotiations with Canada.

Analysts point out that Trump's speech reflects his concerns about the outlook for the U.S. economy. Given the high inflation, the Federal Reserve may continue to raise interest rates within the year, and it is expected that there will be significant differences between Trump and the current government's economic policy orientations. In the long run, the uncertainty of U.S. economic policy may exacerbate market volatility.

3. Meta seeks $29 billion in financing, fully betting on AI data center construction

According to the Financial Times, Meta is seeking to raise $29 billion to fund its comprehensive advancement in artificial intelligence business, for which it will seek assistance from private capital firms to finance the construction of data centers in the United States.

Informed sources revealed that Meta's negotiations with private credit investors have made progress, with several large institutions involved in the discussions, including Apollo Global Management, KKR, Brookfield, Carlyle, and Pacific Investment Management Company. Meta aims to raise $3 billion in equity from them, followed by raising $26 billion in debt.

Analysis indicates that Meta's move reflects its ambitions in the AI field. As a tech giant, Meta realizes that AI will be a key growth point in the future, and thus is increasing its investment in AI infrastructure. However, due to the high investment and high risk associated with AI technology, the success of Meta's AI bets remains to be seen over time.

4. The number of IRS warning letters received by American crypto investors surged by 758%.

According to a study, the number of cryptocurrency-related warning letters received by US crypto investors from the IRS ( has surged by 758% in the past 60 days.

Researchers analyzed data from across the United States and found that the IRS issued a large number of warning letters regarding tax obligations for cryptocurrency transactions between April and May 2023. Among these, investors in California, New Jersey, and Texas received the most warning letters.

Analysts say that the IRS's move aims to remind investors that cryptocurrency transactions are also subject to taxation. With the growing popularity of cryptocurrencies, related tax issues are increasingly drawing the attention of regulatory agencies. In the future, the IRS may further intensify its oversight of cryptocurrency investors to ensure tax fairness.

) 5. The British AI company Cel AI plans to raise $10.3 million to purchase Bitcoin.

UK artificial intelligence company Cel AI will raise at least £7.5 million ###, approximately $10.3 million (, through accelerated bookkeeping issuance to purchase Bitcoin as part of its recently announced Bitcoin treasury reserve strategy.

Cel AI stated that this move aims to hedge against inflation risks and provide the company with a new source of revenue. The company plans to convert most of its cash reserves into Bitcoin over the next few years.

Analysis points out that in recent years, an increasing number of companies and institutional investors have begun to incorporate Bitcoin into their asset portfolios in search of potential investment returns. However, the high volatility of Bitcoin prices also presents certain risks for investors. Cel AI's move may inspire more companies to follow suit, treating Bitcoin as a financial reserve asset.

2. Industry News

) 1. Bitcoin price hovers around $107,000, market sentiment cautious.

Bitcoin has not seen much price fluctuation in the past 24 hours, hovering around $107,000. Nevertheless, market sentiment remains cautious as investors closely monitor changes in the macroeconomic landscape and regulatory environment.

Analysts point out that Bitcoin is currently at a critical stage. If it can break through the resistance level of $108,000, it may trigger a new wave of upward momentum. However, if it falls below the support level of $106,000, it may face further downside risks.

Trading volume data shows that, despite limited price fluctuations, market participation has not declined. This indicates that investors still hold an optimistic outlook on the future prospects of Bitcoin, merely adopting a wait-and-see attitude for the time being. Once favorable news or a significant breakthrough occurs, it may trigger a new wave of capital inflow.

Overall, Bitcoin may fluctuate around the $107,000 range in the short term. Investors need to closely monitor macroeconomic and regulatory dynamics, as well as the technical performance of Bitcoin itself, to cautiously seize investment opportunities.

2. Ethereum transaction activity reaches an 18-month high, with transaction volume exceeding 1.75 million.

The Ethereum network set a new high record on June 25, reaching a transaction volume of 1.75 million confirmations, the highest in 18 months. This data reflects a significant increase in the activity of the Ethereum ecosystem and highlights the continued development of application areas such as DeFi and NFTs.

Analysts say that the rise in Ethereum trading volume is mainly due to several factors: first, the continued warming of the DeFi ecosystem has driven a large amount of trading demand; second, the booming NFT market has also promoted the use of the Ethereum network; in addition, various new applications launched on Ethereum have attracted more users to join.

The significant increase in trading volume will undoubtedly exacerbate congestion on the Ethereum network, leading to higher transaction fees. However, in the long run, the increase in activity is beneficial for the development of the Ethereum ecosystem, attracting more developers and funds, creating a virtuous cycle.

However, some analysts remind that the competition faced by Ethereum is intensifying, and other public chains are also accelerating their development pace. To maintain its leading position, Ethereum needs to continue innovating, improve scalability, and enhance user experience.

Overall, the new high in Ethereum's trading volume reflects the vitality of the ecosystem, but it also faces challenges, and its future development is worth ongoing attention.

3. XRP faces a major blow as the judge rejects a key motion.

In the long-term legal dispute between XRP and the U.S. Securities and Exchange Commission ### SEC (, XRP has suffered a significant setback. Federal Judge Analisa Torres dismissed a key motion from XRP, which could have profound implications for the future development of XRP.

According to court documents, Judge Torres ruled that selling XRP to retail investors on public exchanges constitutes a securities transaction, violating relevant laws. However, selling XRP to institutional investors does not fall under the scope of securities transactions. This ruling is seen as a significant blow to XRP.

As soon as the news broke, the price of XRP fell sharply, and investor sentiment plummeted. Analysts pointed out that the court ruling increased the uncertainty surrounding XRP, which could hinder its development in the institutional sector.

However, some analysts believe that the court ruling is not the end. XRP may still appeal to try to turn the situation around. In addition, changes in the regulatory environment may also bring new opportunities for XRP.

Overall, the court ruling undoubtedly poses challenges for XRP, but there is still significant uncertainty regarding its future development. Investors need to closely monitor subsequent legal developments and prudently assess the risks.

) 4. Stablecoin regulation intensifies, Hong Kong takes the lead in implementing comprehensive regulations.

Regulation of digital assets has always been a focal point of global attention. The Hong Kong Special Administrative Region government recently officially issued the "Stablecoin Regulation," becoming the world's first major financial center to implement comprehensive legal regulation on stablecoins, attracting wide attention from the industry.

This regulation establishes a "issuance access + activity supervision + entity designation" three-in-one regulatory system, clearly defines the definition and scope of stablecoins, regulates the issuance, management, and operation activities of stablecoins, and requires that the issuers of stablecoins must be recognized entities.

Industry insiders believe that Hong Kong's regulatory measures will set a model for global stablecoin regulation, which is beneficial for the long-term healthy development of the stablecoin market. At the same time, it also means that the issuance and use of stablecoins will face more regulatory constraints in the future.

However, there are also views that excessive regulation may stifle innovation and affect the application of stablecoins in areas such as payment settlement. Regulatory policies need to seek a balance between risk prevention and innovative development.

Overall, the stablecoin regulatory framework in Hong Kong marks a significant change in the regulatory landscape and will have a profound impact on the global digital asset market, warranting continued attention.

5. Cryptocurrency exchanges launch XRP and SOL futures contracts

A well-known cryptocurrency exchange has announced the launch of micro futures contracts for XRP and Solana###SOL(, as well as a micro version of Bitcoin Friday futures, further enriching its crypto derivatives product line.

Futures contracts allow traders to speculate or hedge against price fluctuations of assets. Compared to standard futures, micro futures have lower capital requirements and reduced risk, making them more appealing to attract more investors.

Analysts say that the launch of XRP and SOL futures contracts reflects the continuous growth in market demand for these two cryptocurrencies. In particular, XRP has seen a significant increase in attention from institutional investors following the near conclusion of its legal disputes with the SEC.

However, there are also views that the launch of futures contracts may exacerbate speculative behavior in the cryptocurrency market, leading to greater price volatility and risk. Investors need to prudently manage their risk exposure.

Overall, this initiative is beneficial in meeting the diverse needs of investors, but it also requires investors to maintain a sufficient awareness of risks and to view market fluctuations rationally.

) 6. The production costs of Bitcoin miners have surpassed $100,000, marking a significant turning point for the industry.

As the price of Bitcoin continues to rise, the production costs for miners have also seen a significant increase. According to statistics, the production costs for Bitcoin miners have surpassed the $100,000 mark, marking the industry’s entry into a new development stage.

Analysts point out that the rise in production costs mainly stems from several aspects: first, the increasing difficulty of Bitcoin mining, which requires more computing power; second, the continuous rise in costs such as electricity and equipment; third, the increasing regulatory pressure, which has forced some mining sites to close or relocate.

The high production costs will undoubtedly put pressure on miners' profitability, potentially accelerating the reshuffling process in the industry. Mining farms with strong financial backing and high operational efficiency will gain a greater advantage, while small and medium-sized farms face the risk of being eliminated.

However, some analysts believe that the continuous rise in Bitcoin prices will bring considerable profits to miners, thereby offsetting some cost pressures. At the same time, the launch of a new generation of more energy-efficient mining machines will also help reduce production costs.

Overall, Bitcoin mining is undergoing a significant turning point and facing severe challenges. However, as long as the Bitcoin ecosystem continues to develop healthily, mining will surely rejuvenate.

3. Project News

1. NOYA.ai discovered a security vulnerability and called for a suspension of use.

NOYA.ai is a decentralized application based on artificial intelligence, designed to provide users with personalized cryptocurrency investment advice. The project was launched in 2022 and developed by an experienced team, quickly gaining the attention of the crypto community.

The official NOYA.ai announced on the Twitter platform X### that a potential security vulnerability has been discovered, and the team has launched a full investigation. During this period, they are urging users to suspend the use of the application. It is reported that this incident was triggered by an overreaching developer, and the situation is complex, with the team working hard to handle it.

This security incident has sparked widespread attention and discussion within the cryptocurrency community. Some analysts believe that it highlights the existing risks in the security of decentralized applications, indicating a need for further strengthening of security measures. However, there are also opinions that the NOYA.ai team promptly discovered and publicly reported the vulnerabilities, demonstrating their high regard for user interests.

Overall, this incident has once again raised people's concerns about the security of decentralized applications. As an emerging field, blockchain technology is still evolving and improving, and security issues require the joint efforts of the entire industry to address.

( 2. The Solana ecosystem continues to innovate, with new projects emerging one after another.

Solana is a high-performance blockchain network known for its low costs and high throughput. Since its launch in 2020, the Solana ecosystem has rapidly developed, attracting a large number of developers and projects.

Recently, a number of new innovative projects have emerged in the Solana ecosystem, such as Cub, FlashTrade, SonicSVM, and Solayer, which are bringing more interesting application scenarios to Solana. According to statistics, nearly half of the attendees at the recent Breakpoint conference were participating for the first time, reflecting that the Solana ecosystem continues to attract fresh blood.

The emergence of these new projects has further enriched the application scenarios of the Solana ecosystem, providing users with more choices. At the same time, some analyses suggest that the Solana ecosystem is recovering from its lows, and the community is becoming more resilient.

However, there is also a viewpoint that, despite the emergence of many new projects in the Solana ecosystem, the truly "killer" applications that can gain large-scale user recognition are still waiting to appear. Whether Solana can ultimately achieve widespread application remains to be seen.

) 3. The Move ecosystem has attracted attention, with projects like Sui and Aptos becoming favorites.

Move is an emerging blockchain programming language developed by Meta###Facebook###. Recently, blockchain projects based on the Move language have attracted wide attention from the crypto community.

Among them, Sui and Aptos are two of the most notable Move ecosystem projects. Sui was launched in 2022, founded by former Meta employees, and has issued tokens and launched its mainnet. Aptos, also founded by former Meta employees, launched its mainnet in October 2022. Both projects have received significant investment and are regarded as representative projects of the Move ecosystem.

The Move language has a certain correlation with the Rust language, allowing projects within the Solana ecosystem to migrate relatively easily to the Move ecosystem. This further promotes the development of the Move ecosystem.

Analysts believe that the rise of the Move ecosystem reflects the crypto community's desire for new technologies. The Move language is considered to have better security and scalability, and is expected to bring new development opportunities to blockchain. However, the Move ecosystem is still in its early stages, and whether it will ultimately achieve widespread adoption remains to be seen.

Overall, the rise of the Move ecosystem has brought new vitality to the crypto world and provided new options for investors and developers.

4. Economic Dynamics

( 1. Federal Reserve Chairman Powell reiterated that interest rate hikes will continue.

)# Economic Background The U.S. economy experienced high inflation and a rate hike cycle in 2022, but the latest data shows that the inflation rate has eased. In May, the core Personal Consumption Expenditures Price Index ### PCE ### rose by 4.7% year-on-year, down from 4.8% in April. However, the labor market remains strong, with the unemployment rate in May at just 3.7%. The Federal Reserve has been working to achieve its inflation target while avoiding an economic hard landing.

(# Important Event In a significant speech this Tuesday, Federal Reserve Chairman Jerome Powell reiterated that interest rates will continue to rise until inflation rates show a clear decline. He stated: "Our work is not done yet. We will continue to raise interest rates until we are confident that inflation is steadily returning to our target level of 2%." This statement has heightened market expectations for further rate hikes.

)# Market response Powell's speech immediately triggered a sharp reaction in the market. The U.S. stock market fell after the speech, with the S&P 500 index dropping 0.6%. The dollar index also rose, reflecting expectations for more interest rate hikes. Bond yields increased, with the 10-year Treasury yield rising to 3.83%. Investors generally believe that Powell's hawkish remarks indicate that more rate hikes are imminent, which could increase the risk of a hard landing for the economy.

Expert Opinion

Goldman Sachs Chief Economist Jan Hatzius stated: "Powell's speech reinforces our view that the Federal Reserve will raise interest rates two more times later this year, bringing the federal funds rate to 5.5%." Morgan Stanley Chief U.S. Economist Ellen Zentner also believes Powell's remarks "cleared the way for rate hikes in September and November." However, she added that if inflation continues to decline, the Federal Reserve may pause rate hikes in 2024.

2. China's June Manufacturing PMI unexpectedly rebounded, indicating a strong economic recovery momentum.

Economic Background

The Chinese economy was significantly affected by strict pandemic control measures in 2022, resulting in a sharp slowdown in GDP growth. However, since 2023, with the optimization of epidemic prevention policies and the introduction of a series of support measures, the economy has begun to stabilize and rebound. In May, the official manufacturing PMI was 49.6, slightly higher than April's 49.2, indicating an improvement in the manufacturing sector's prosperity.

Important Events

The data released by the National Bureau of Statistics of China on June 28 shows that the official Manufacturing Purchasing Managers' Index ### PMI ### for June is 49.0, higher than the previous value of 48.8 and above the market expectation of 48.6. This marks the second consecutive month of recovery in China's manufacturing PMI, reflecting an improvement in manufacturing activity.

(# Market Reaction The better-than-expected manufacturing PMI data has further enhanced market confidence in the prospects for China's economic recovery. The onshore RMB against the US dollar spot exchange rate rose nearly 200 pips, reclaiming the 6.71 mark. The Chinese stock market also saw an increase, with the Shanghai Composite Index closing up 0.63%. Analysts believe that the strong PMI data will further boost market sentiment.

)# Expert Opinion Xie Nanye, a senior economist at the Macroeconomic Research Center of China International Capital Corporation, stated: "The June manufacturing PMI data exceeded expectations, reflecting a strong momentum in economic recovery. With domestic and external demand continuing to improve, the manufacturing sector is expected to further warm up." The macro research team at Guotai Junan Securities also believes that the manufacturing PMI data is positive, indicating sufficient momentum for economic recovery, and expects the economy to maintain rapid growth in the third quarter.

3. The EU and the UK have reached an agreement on the new Northern Ireland protocol.

Economic Background

The UK officially left the EU in 2020, but the special status of Northern Ireland has been a focal point of negotiations between the UK and the EU. To avoid establishing a hard border between Northern Ireland and Ireland, the "Northern Ireland Protocol" previously agreed upon by both sides stipulates that Northern Ireland largely continues to abide by EU rules. However, this agreement has sparked internal divisions in Northern Ireland, and the UK government has been seeking to renegotiate.

Important Events

After two years of difficult negotiations, the EU and the UK reached a new Northern Ireland agreement in February 2023, known as the "Windsor Framework." The agreement aims to simplify trade between Northern Ireland and other parts of the UK while ensuring the integrity of the EU single market. On June 27, the EU Council officially approved the agreement.

Market Reaction

After the new Northern Ireland agreement was approved, the pound rose slightly against the dollar. Investors believe that this agreement helps eliminate a major uncertainty factor for the UK economy. The UK stock market also saw an increase, with the FTSE 100 closing up 0.3%. Analysts stated that the agreement provides greater certainty for UK businesses, which is beneficial for attracting investment.

Expert Opinion

British economist Graham Stuart stated: "The new Northern Ireland agreement is an important milestone in the Brexit process. It provides greater certainty for British businesses and is expected to boost trade between the UK and the EU." Goldman Sachs analysts believe that the agreement will help boost the UK economy, with UK GDP expected to grow by 0.6% in 2023, higher than previously anticipated.

5. Regulation & Policy

1. Hong Kong plans to legislate to regulate virtual asset trading and custodial services.

The Hong Kong Securities and Futures Commission and the Financial Services and the Treasury Bureau have published a consultation document proposing to legislate a licensing regime for digital asset (i.e., virtual asset) trading and custody service providers. This initiative aims to establish a comprehensive regulatory framework for the virtual asset industry in Hong Kong, enhancing market transparency and investor protection.

According to the consultation documents, whether it is small cryptocurrency transactions, withdrawals, exchanges for fiat currency, or complex brokerage activities and large transactions, a license must be obtained from the Securities Regulatory Commission. This means that virtual asset over-the-counter trading platforms will fall under regulatory oversight. Compared to last year's proposal regarding virtual asset over-the-counter trading platforms applying for licenses from customs, the newly proposed regulatory requirements are more stringent.

Trading service providers must pay a minimum capital of 5 million HKD, while custodians must have 10 million HKD. Additionally, service providers must have at least two responsible personnel approved by the Securities and Futures Commission. Furthermore, operating without a license can result in a maximum sentence of 7 years in prison.

Industry insiders believe that Hong Kong, as an international financial center, establishing a comprehensive regulatory system for virtual assets will help attract more companies to conduct related businesses in the region. However, there are also opinions that overly strict regulations may hinder industry development. Overall, the market welcomes this policy and looks forward to further implementation of detailed measures.

2. The Republican Party of the U.S. Senate has introduced a cryptocurrency regulation bill.

According to a report by The New York Times, Republican senators in the United States introduced a 1,000-page cryptocurrency regulation bill on the eve of the July 4 deadline. This initiative aims to establish a comprehensive regulatory framework for the digital asset industry.

The bill is known as the "GENIUS Act" and the "CLARITY Act," and is expected to be finalized in September. It includes provisions to legalize the crypto market, establish clear rules for stablecoins, and define the regulatory boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

The introduction of this bill marks a significant step towards comprehensive regulation of digital assets by U.S. lawmakers. For a long time, the lack of cryptocurrency regulation has been a hindrance to the industry's development. If this bill is passed, it will provide clearer compliance guidelines for cryptocurrency companies.

However, there are also industry insiders who have doubts about the content of the bill. They worry that excessive regulation may stifle innovation and question whether lawmakers truly understand the essence of cryptocurrency. Overall, the market has mixed reactions to this bill, with both supportive and skeptical voices existing.

3. The White House Reveals Timeline for Cryptocurrency Legislation

According to insiders from the White House, the U.S. government is accelerating the process of cryptocurrency regulation. Key bills "GENIUS Act" and "CLARITY Act" are expected to be finalized in September.

These two bills aim to legalize the cryptocurrency market, establish clear rules for stablecoins, and define the regulatory boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The White House hopes to create a more defined regulatory environment for the digital asset industry through legislation.

Insiders say that July will be a key period for advancing cryptocurrency regulation. During this time, Congress will engage in intense debates over relevant bills. The White House will also intensify its efforts to coordinate with all parties in hopes of completing the legislative process before September.

Previously, the lack of regulation in the cryptocurrency sector has been a bottleneck for the industry's development. Industry insiders welcome this government action, believing that clear regulation will help attract more institutional investors and promote the long-term healthy development of the industry. However, there are also concerns that excessive regulation could stifle innovation.

Overall, there are differences in the market regarding government regulatory measures, and there is hope that the bill can ultimately strike a balance between regulation and innovation.