$308M crypto laundering scheme busted, Hashkey token, Hong Kong CBDC: Asia Express
Visa completes e-HKD CBDC trial with HSBC and Hang Seng
Hong Kong is one step closer to a central bank digital currency (CBDC) with the release of its successful e-HKD phase 1 results in collaboration with Visa, HSBC, and Hang Seng Bank.
According to the November 1 announcement, Visa said that it achieved “near real-time” finality with transfers involving tokenized deposits of the digital Hong Kong dollar (e-HKD).
“Tokenized deposits were burned on the sending bank’s ledger, minted on the receiving bank’s ledger, and simultaneously settled interbank via the simulated wholesale CBDC layer,” the payments firm wrote.
“This would provide for settlement in an atomic manner with better streamlining of any operational dependencies imposed by financial institutions and other intermediaries, thus improving liquidity management.”
The payment processor also stated that its e-HKD test pilot was functional 24/7, surpassing the uptime of traditional financial systems, which typically don’t function after hours or on weekends. In addition, the firm wrote that “tokenized deposits can be fully transacted while remaining encrypted, without revealing information about identity, balances, or transaction amounts to non-bank users.”
For its next steps, Visa plans to explore the use of e-HKD in tokenized asset markets and programmable finance to automate real estate transactions. “In this pilot’s Property Payments use case, the payment from a buyer transferring the remaining balance tokens to the property developer may be automated upon reaching the completion date of the contract, minimising lag time in closure of the process,” the company said. Other areas of research interest include expansion of retail solutions and digital cross-border payments.
Despite the promising results, no definite timelines have been given for the full launch of the e-HKD CBDC, or even that such a launch will occur. In its October 30report, the Hong Kong Monetary Authority warned there are still issues to resolve:
“For instance, an rCBDC issued as a programmable money may be more susceptible to cybersecurity risks, as it may present more mediums for external threats to inject malicious code.”
With the silent nod from Beijing’s Central Government, Hong Kong has been striving to become a Web3 hub for blockchain in the Asia-Pacific Region. However, such efforts had been overshadowed by the collapse of the JPEX crypto exchange, resulting in losses exceeding $150 million for Hong Kong investors. Since the incident unfolded, trust in cryptocurrency among local residents has fallen drastically.
Hashkey’s regulated exchange token
Hashkey, one of the first crypto exchanges to receive a regulatory license in Hong Kong, will introduce an exchange token in 2024.
According to therecentwhitepaper, the “HashKey EcoPoints” (HSK) token will be minted on Ethereum with a total supply of 1 billion. Out of this amount, 65% is reserved for users, 30% for Hashkey staff, and 5% for its ecosystem treasury.
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The token will be distributed as incentivizes to ecosystem users and distributors and will not be “sold via private or public sales for fund raising purposes.” As for utility, the company states that the token could be used to settle trading fees, along with early access to future token subscriptions and product upgrades on its exchange services.
The exchange also pledges to buyback HSK tokens with up to 20% of profits generated from related Hashkey services. “HashKey implements an offsetting issuance mechanism (burning) to protect HSK holders from the dilutionary impact of rewards-based increases in HSK circulating supply,” the firm wrote. However, regulatory approval is still required for the token design plan:
“The contents of this whitepaper have not been reviewed by any regulatory authority in Singapore or Hong Kong. You are advised to exercise caution in relation to the information in this whitepaper and any transaction that you intend to carry out involving HSK.”
In August, Hashkey, alongside crypto exchange OSL, received one of the first regulatory licenses for retail crypto trading in Hong Kong. Its trading volume initially stagnated but has sincegainedtraction. Only select coins and tokens, such as Bitcoin, Ethereum, Tether, and Avalanche, are approved to be listed on the exchange.
$308M syndicate manipulated crypto markets to launder money: Police
Nineteen Chinese nationals have been sentenced for their role in a $308 million money laundering scheme involving cryptocurrencies between November 2020 and April 2021.
According to an October 31 report by the Chongqing Tongliang District People’s Court, Mr. Jiang and Mr. Deng, the principal conductors of the money laundering syndicate, together laundered a total of $308 million worth of Bitcoin and Tether for proceeds of crime related to online gambling and wire fraud.
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Police say that to avoid platform monitoring and know-your-customer requirements, the accused individuals orchestrated a sophisticated scheme of using peer-to-peer transactions, where coins were sold at “unusual prices relative to spot markets” for stablecoin Tether and then transferred to exchanges for cash.
“By fabricating pretexts such as withdrawing project funds and migrant workers’ wages, they organized gang members to withdraw cash from bank counters in Chongqing, Sichuan, Shanghai and other provinces and cities. The amount of cash withdrawals ranged from hundreds of thousands to several million yuan each time. After withdrawing the cash, the cash is packaged in trolley cases, backpacks, etc., and transported by plane.”
The 19 individuals, including Mr. Jiang and Mr. Deng, were sentenced to six months to six years in prison. “In recent years, the phenomenon of criminals committing illegal and criminal activities through telecommunications networks has become increasingly rampant, posing a huge threat to the legitimate rights and interests of the general public,” the presiding judge wrote.
Due to such a rise in wire fraud involving cryptocurrencies, China’s Central Government has cracked down harshly on crypto-related activities in the country, although there have been some signs of relaxation as of late. Nevertheless, such enforcement actions have sometimes resulted in collateral damage for foreign investors using Chinese-based crypto services without criminal intent.
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Bitcoin’s expanding institutional adoption may provide the “structural” inflows necessary to surpass gold’s market capitalization and push its price beyond $1 million by 2029, according to Bitwise’s head of European research, André Dragosch.
“Our in-house prediction is $1 million by 2029. So that Bitcoin will match gold’s market cap and total addressable market by 2029,” he told Cointelegraph during the Chain Reaction daily X spaces show on April 30.
Corporations are coming for your bitcoin (feat. André Dragosch, Head of Research at Bitwise) #CHAINREACTION https://t.co/5F3cRWBHzq
— Cointelegraph (@Cointelegraph) April 30, 2025
Gold is currently the world’s largest asset, valued at over $21.7 trillion. In comparison, Bitcoin’s market capitalization sits at $1.9 trillion, making it the seventh-largest asset globally, according to CompaniesMarketCap data.
Related: Bitcoin treasury firms driving $200T hyperbitcoinization — Adam Back
For the 2025 market cycle, Bitcoin may surpass $200,000 in the “base case” and $500,000 with more governmental adoption, Dragosch said.
“But once you see sovereign bias like the US government stepping in, all this will change to $500,000.”
“So the base case is $200,000, conditional on the US government not stepping in. If they step in, it will move closer toward $500,000,” said Dragosch, referring to the US government’s plan to potentially make direct Bitcoin acquisitions through “budget-neutral” strategies.
The US is looking at “many creative ways” to fund its Bitcoin investments, including from tariff revenue and by reevaluating the US Treasury’s gold certificates, creating a paper surplus to fund the BTC reserve without selling gold, Bo Hines of the Presidential Council of Advisers for Digital Assets said in an interview on April 14.
Related: Crypto sentiment recovers, but weekend liquidity risks remain
“Structural” ETF inflows, institutional adoption prolong Bitcoin cycle
The US-based spot Bitcoin exchange-traded funds (ETFs) have surpassed all expectations during their first year of trading, exceeding record trading volumes as BlackRock’s iShares Bitcoin Trust ETF became the fastest-growing ETF in history.
The first year is usually the “slowest” for ETFs, Dragosch said, highlighting the launch of the gold ETF:
“That alone implies that in the second and third year, we will see growing inflows. In terms of the four four-year cycle, implies that, this cycle will be prolonged by these structural inflows.”
The Bitcoin cycle may also be prolonged when US wirehouses start gaining exposure to Bitcoin and ETFs.
“In the US, the major distribution channels go via Wirehouses, which are essentially the big banks like Merrill Lynch or Morgan Stanley. […] Not even half of these wirehouses have opened up their distribution channels to US Bitcoin ETFs,” the analyst said.
Adoption from US wirehouses may bring a “huge amount of capital,” since these control over $10 trillion worth of customer assets, Dragosch added.
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Major European cryptocurrency investment firm 21Shares has filed for a spot Sui exchange-traded fund (ETF) in the United States, marking another step in its expansion to the US market.
21Shares on April 30 submitted the Form S-1 registration for a spot Sui (SUI) ETF to the US Securities and Exchange Commission (SEC).
Called the 21Shares Sui ETF, the proposed ETF will issue common shares of beneficial interest by seeking to track the performance of SUI held by 21Shares’ US subsidiary.
The US filing comes a year after 21Shares started trading the 21Shares Sui Staking exchange-traded product in Europe in July 2024, with its first listings on Euronext Paris and Euronext Amsterdam.
No ticker or planned exchange yet
The 128-page filing does not specify on which US exchange the new SUI ETF is expected to debut trading. The ETF also doesn’t have a ticker symbol yet.
“There is no certainty that there will be liquidity available on the exchange or that the market price will be in line with the NAV [net asset value] or the principal market NAV at any given time,” it states.
The filing highlighted that the ETF aims to provide exposure to SUI by holding the tokens directly, without utilizing leverage, derivatives or engaging in speculative trading.
Canary Capital was the first to file for Sui ETF
21Shares is not the first company to file for a Sui ETF in the US. Canary Capital, a US-based crypto investment firm, filed a Form S-1 registration for a spot Sui ETF on March 17.
Subsequently, Cboe BZX Exchange asked US regulators for clearance to list Canary’s Sui ETF in early April.
Sui-based ETPs have already been trading in Europe, with some of such products including 21Shares Sui staking ETP and VanEck Sui ETP.
Related: More than 70 US crypto ETFs await SEC decision this year — Bloomberg
According to the latest CoinShares update, Sui-based ETPs had $400 million in assets under management as of April 25.
Year-to-date, Sui ETPs have seen $72 million of inflows, with a fresh $20.7 million coming in just last week.
The latest ETF filing by 21Shares is yet another product joining a massive list of crypto ETFs awaiting the SEC’s decision.
According to Bloomberg ETF analysts Eric Balchunas and James Seyffart, there were at least 72 new crypto ETF filings on the SEC’s table as of May 1.
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Banking giant Morgan Stanley reportedly plans to list cryptocurrencies on its E*Trade investment brokerage and trading platform.
According to a May 1 Bloomberg report, the firm intends to list crypto assets on E*Trade in 2026. The plan is still in early development, and the bank is said to be exploring partnerships with established crypto firms to power the service. Internal discussions about cryptocurrency support reportedly began in late 2024.
This would not be Morgan Stanley’s first exposure to digital assets. The bank’s wealthiest clients have had access to crypto exchange-traded funds (ETFs) and futures for some time, with the firm’s advisers allowed to pitch Bitcoin ETFs since August 2024.
Related: Morgan Stanley to explore crypto offerings for clients — CEO
Regulatory tailwinds push crypto forward
The news follows previous reports that Morgan Stanley was considering adding cryptocurrency trading to its E*Trade online brokerage platform in early January. The reports at the time cited the expectations of a friendlier crypto regulatory environment.
The move comes amid an increasingly favorable regulatory environment in the United States following the election of President Donald Trump, who campaigned on a pro-crypto platform and is personally involved in several blockchain ventures.
Related: Morgan Stanley discloses $188M in BlackRock Bitcoin ETF holdings
The first 30 days of the Trump administration brought significant changes to the local crypto industry. More recently, US crypto proponents have shown optimism following the swearing-in of pro-crypto Securities and Exchange Commission Chair Paul Atkins.
The SEC had significantly changed its stance even before Atkins took office. In late February, the agency had already paused multiple cryptocurrency enforcement cases with imminent deadlines.
This is a developing story, and further information will be added as it becomes available.
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