Following a significant hack in 2024, Indian cryptocurrency exchange WazirX is resuming operations. Concurrently, regulatory bodies like the UK's Financial Conduct Authority (FCA) are intensifying their scrutiny of crypto exchanges.
The FCA has issued numerous warnings to cryptocurrency exchanges operating without registration, including one associated with Justin Sun's HTX.
In Russia, the Ministry of Finance is reportedly preparing to implement new regulations for the cryptocurrency sector. Meanwhile, European regulators are pursuing additional sanctions against Russian cryptocurrency exchanges, driven by concerns over Russia evading sanctions related to its conflict in Ukraine.
On a different note, Bitcoin (BTC) treasuries are experiencing a resurgence in popularity among companies. In the United States, data services firm Hyperscale Data has allocated $60 million to its Bitcoin holdings.
WazirX Shutdown Ends After $230 Million July Hack
WazirX CEO Nischal Shetty announced on Thursday that the platform will recommence trading on October 24. Initially, the exchange will offer 30 days of zero-fee trading. Trading pairs with the Indian Rupee will be gradually introduced, beginning with Tether's USDt (USDT) stablecoin.
WazirX had been inactive since last summer, when the Lazarus Group, a hacking collective linked to the North Korean government, reportedly stole approximately $240 million in cryptocurrency from the exchange. Prior to the hack, WazirX reported holding around $500 million in assets, indicating that the hackers absconded with nearly half of the platform's total crypto holdings.
While serving an Indian clientele, the exchange underwent a restructuring process through its Singapore-based parent company, Zettai, in the Singapore High Court. Following the rejection of several proposals earlier this year, the court approved a final restructuring plan on October 13.
Not all creditors of WazirX are satisfied with the outcome. The exchange is currently involved in litigation with Indian crypto app CoinSwitch, which has filed a lawsuit against WazirX for its failure to recover lost funds. CoinSwitch's claim of $5.4 million was recently upheld by the Bombay High Court.
UK FCA Takes Action Against Justin Sun's HTX
The Financial Conduct Authority (FCA), the United Kingdom's financial markets regulator, filed a lawsuit against cryptocurrency exchange HTX (formerly Huobi) on October 22. According to Bloomberg, the exchange is owned by Justin Sun, who also serves as a global advisor for HTX.
The FCA alleges that HTX has violated the UK's financial promotions regulations, as it lacks the necessary license to operate within the country. The action, initiated in the London High Court, is described by the FCA as part of its commitment to protecting consumers and maintaining the integrity of UK financial markets. HTX has not issued any public statements concerning these allegations.
HTX is not the sole exchange that the FCA has scrutinized. The agency has lodged numerous complaints against unregistered exchanges and crypto companies serving UK clients. This heightened regulatory focus on crypto businesses follows a recent rule modification, after which the FCA now permits crypto exchange-traded notes, citing the market's maturation.
Russia Prepares New Crypto Regulations; EU Implements Crypto Sanctions
Russia's Ministry of Finance is reportedly preparing to introduce comprehensive new regulations for the cryptocurrency industry, which will include provisions for cross-border crypto payments.
Finance Minister Anton Siluanov disclosed these new measures following a strategic session chaired by Prime Minister Mikhail Mishustin on Tuesday, as reported by Interfax. Siluanov indicated that the government has observed the use of cryptocurrency for transferring funds out of the country and for import payments.
Late last year, the central bank established an experimental framework permitting cryptocurrencies for import payments. However, all other forms of crypto payments remain prohibited in Russia. Siluanov stated that the ministry has reached an agreement with the central bank to impose order on financial markets and enhance oversight.
Russia has utilized various methods to circumvent wartime sanctions, including cryptocurrency. Just two days after the strategic session, the European Union enacted its 19th package of sanctions against Russia, which included significant measures against the Russian state-backed stablecoin A7A5.
The European Council stated that the stablecoin A7A5 has emerged as a significant instrument for financing activities that support the war of aggression. Sanctions were imposed on the developer, issuer, and operator of a platform where substantial A7A5 volumes were recorded. Transactions involving this stablecoin are also prohibited within the EU.
US-Based Hyperscale Allocates $60 Million to Bitcoin Treasury
Hyperscale Data, a data services company headquartered in the United States, announced that the total value of its Bitcoin treasury reached $60 million, based on prices from October 19. This Bitcoin treasury constitutes nearly 66% of the company's overall market valuation.
Its subsidiary, Sentinum, holds approximately $16 million in Bitcoin on its balance sheet. Hyperscale has also earmarked around $43 million in cash for Sentinum to acquire additional Bitcoin. Milton Ault, Hyperscale's executive chairman, commented that their disciplined dollar-cost averaging strategy continues to demonstrate its efficacy. He noted that Bitcoin's price volatility has presented valuable opportunities to methodically build their position at favorable long-term averages.
Driven by the advocacy of Bitcoin maximalist and Strategy Chairman Michael Saylor, an increasing number of companies are adopting Bitcoin for their treasuries. Strategy, recognized as the world's largest publicly traded holder of Bitcoin, has experienced considerable success with its Bitcoin investments.
However, not all companies have achieved similar success. Market fluctuations have caused the market value of some companies to fall below the value of their Bitcoin holdings. If this trend persists over an extended period, it can lead to a rapid deterioration of a company's financial position, potentially forcing the liquidation of its assets.
KindlyMD CEO David Bailey recently stated that the enthusiasm surrounding Bitcoin treasuries is diminishing, and investors are becoming more adept at identifying less viable ones.