21 May, 2025

Hong Kong Passes Stablecoin Bill to Establish Licensing Regime Amid Global Competition

Hong Kong's Legislative Council passed the long-anticipated stablecoin bill today, establishing a licensing regime for stablecoin issuers.In a council meeting Wednesday, lawmakers passed the "Stablecoins Bill" in its third reading, which mandates licensing from the Hong Kong Monetary Authority for issuers of fiat-referenced stablecoins.The Hong Kong government said in a statement that the Stablecoins Ordinance is set to come into effect this year, to "allow sufficient time for the industry to understand the requirements under the licensing regime." The HKMA said it plans to hold additional consultations on the detailed regulatory framework.Under the new regime, stablecoin issuers must meet requirements in key areas such as reserve asset management, redemption mechanisms, and client asset segregation. They are expected to maintain robust systems to stabilize token value and comply with anti-money laundering standards, counter-terrorist financing, risk management, and other regulatory requirements."The Ordinance adheres to the 'same activity, same risks, same regulation' principle, with a focus on a risk-based approach to promote a robust regulatory environment," said Christopher Hui, the Secretary for Financial Services and the Treasury.Johnny Ng, one of the lawmakers in the stablecoin bill committee, said on X that the passage of the stablecoin legislation is "just the first step in building Web3 infrastructure.""Issuing stablecoins is only the beginning; the most crucial step is to develop more real-world applications," Ng said. "Whether in physical retail, cross-border trade, or peer-to-peer transactions, I believe there is tremendous untapped potential for stablecoin adoption."Hong Kong has rolled out the welcome mat for crypto firms by enacting a crypto licensing regime for crypto trading platforms in 2023. In March last year, the HKMA launched a sandbox for stablecoin issuers. It has admitted participants, including Standard Chartered Bank, Animoca Brands, Hong Kong Telecommunications, Jingdong Coinlink and RD InnoTech.Hong Kong's passage of the stablecoin licensing bill coincided with the U.S. Senate's recent vote to advance its stablecoin legislation, dubbed the GENIUS Act. U.S. lawmakers are expected to vote on potential amendments before holding a final vote.

16 May, 2025

Coinbase Hack Exposes Security Gaps in Crypto's Most Trusted Name

$400 Million Breach Shows How Vulnerable Even the Biggest Crypto Firms Still AreCoinbase, the most prominent US-based crypto exchange and a symbol of crypto's entry into mainstream finance, is now dealing with a data breach that strikes at the core of its credibility. The incident is expected to cost the company around $400 million, but the financial damage is only part of the story.What Happened?Hackers gained access to sensitive customer data by bribing support agents contracted through business process outsourcing (BPO) firms in India. This wasn’t a sophisticated exploit of Coinbase’s codebase — it was a social engineering attack. They paid off insiders to leak personal information.The data accessed includes names, addresses, dates of birth, government ID numbers, banking details, account balances, and more. These details can be used to impersonate Coinbase, target customers with phishing attempts, or worse, impersonate the victims with other financial service providers.Why This Is DifferentThis is not just another crypto hack. Coinbase is the primary custodian for $122 billion in assets held by spot Bitcoin ETFs. It's the first crypto exchange listed on a US stock exchange and was just added to the S&P 500 Index. That inclusion puts its shares into countless retirement funds and index portfolios.The breach was revealed just days after that milestone, and it triggered a 7 percent drop in Coinbase shares. Investors are also watching closely due to a separate investigation by the US Securities and Exchange Commission into whether the company misstated user data in past filings.Ongoing Risk and ResponseCoinbase insists that its institutional services, including Coinbase Prime, were not compromised. The company also says that affected agents were immediately fired and their access revoked once suspicious behavior was detected.However, a person familiar with the situation said that the hackers had intermittent but repeated access to internal systems since January. At one point, the attackers reportedly demanded a $20 million ransom in exchange for deleting the stolen data.Rather than comply, Coinbase is offering a $20 million bounty to anyone who can help identify and convict those responsible.Coinbase stated that less than 1 percent of monthly active users were affected and that any customers who lost funds will be reimbursed in full. The company also began notifying affected users via email, stating that passwords, seed phrases, and direct access credentials were not exposed.Impact on High-Net-Worth ClientsSome users are worried about more than just financial loss. With recent violent incidents targeting prominent figures in the crypto world, including kidnappings and physical assaults, the leak of personal details has raised concerns about physical safety.Mike Dudas, managing partner at web3 firm 6MV and one of the individuals targeted, said the breach's scope is “staggering” and raises urgent questions about personal security.Crypto's Social Engineering ProblemThis case is the latest in a string of attacks using human vulnerabilities instead of software exploits. In 2024 alone, over $2.2 billion has been lost to hacks in the crypto space. Bybit’s $1.5 billion breach earlier this year was also the result of social engineering.Nick Jones, CEO of crypto infrastructure platform Zumo, says attackers are using increasingly advanced techniques, including AI, to bypass defenses and trick employees into handing over sensitive data.Bottom LineEven the most established and regulated crypto companies remain exposed to basic forms of manipulation. As Coinbase scrambles to contain the fallout and reassure investors, the breach serves as a blunt reminder: no one is immune — not even the biggest player on the field.