3.21 AI Daily Report on Crypto Assets Industry Trends: Regulation and Innovation Go Hand in Hand

1. Headline

1. The U.S. Securities and Exchange Commission announced: PoW mining does not constitute a securities offering, and miners do not need to register.

The U.S. Securities and Exchange Commission (SEC) has for the first time clearly defined that Proof-of-Work (PoW) cryptocurrency mining activities do not constitute securities transactions, and thus are exempt from federal securities law regulation. Participants such as miners and mining pools are also not required to register with the SEC. This decision brings significant positive news for the legal status of PoW cryptocurrencies and is expected to promote industry development.

The SEC stated that participants in mining activities do not need to register transactions with the U.S. SEC under the Securities Act, nor do they need to comply with any of the exemptions from registration concerning these mining activities as outlined in the Securities Act. This decision aims to create a clearer regulatory environment for the cryptocurrency industry and eliminate long-standing uncertainties.

Analysts point out that this move will clear the obstacles for the development of PoW cryptocurrencies. For a long time, regulatory uncertainty has been a stumbling block for the industry's growth. The SEC's clear stance will bring certainty of compliance operations for participants such as miners and mining pools. At the same time, this will also encourage more institutional investors and enterprises to enter the field, promoting industry development.

However, it is worth noting that the SEC has only made the above regulations regarding PoW mining activities, and the regulatory policies for other types of cryptocurrency issuance and trading activities remain to be further clarified.

2. Canary submits PENGU ETF application, cryptocurrency ETF frenzy reignites

The asset management company Canary Capital Partners has submitted an S-1 filing to the U.S. Securities and Exchange Commission to launch a cryptocurrency ETF named PENGU. This ETF will track the performance of a basket of crypto assets, including Bitcoin, Ethereum, and NFT tokens.

This move follows the previous proposal for the Grayscale Ethereum ETF. Staking has been emphasized as crucial for the performance of the Ethereum ETF. Although regulators have a relatively open attitude towards cryptocurrencies, this process may face challenges. Additionally, Wise has also launched a Solana ETP with staking features.

Even NFTs are included, and the industry has mixed reviews of the crypto ETF craze. Proponents believe that this will propel crypto assets into the mainstream investment space, improving liquidity and transparency. Critics, however, have questioned the prospects of crypto ETFs, arguing that factors such as the lack of physical delivery and staking yields could weigh on their attractiveness.

Overall, the increasing number of cryptocurrency ETF applications reflects the industry's desire for regulatory clarity. With the improvement of the policy environment, it is expected that more innovative cryptocurrency investment products will emerge in the future.

3. The TON Foundation raised over $400 million through token sales to promote ecosystem development.

The TON Foundation announced that it has successfully raised over $400 million through a token sale event. This funding will be used to promote the development of the TON ecosystem, including infrastructure construction, application development, and community expansion.

TON is a decentralized open-source network designed to provide a highly scalable, fast, and secure distributed computing infrastructure. It was first proposed by Telegram founder Pavel Durov in 2018 but was shelved due to regulatory issues. In 2022, the TON Foundation relaunched the project.

This token sale event attracted investors from all over the world. The TON Foundation stated that the funds raised will be used to accelerate ecosystem development, including areas such as developer tools, DApp ecosystem, decentralized storage, and privacy protection. It will also invest in supporting community development and educational programs.

Analysts believe that the TON network has enormous development potential. It adopts innovative sharding technology and consensus mechanisms, which are expected to address the scalability and performance bottleneck issues currently faced by blockchain. This successful financing will inject new momentum into the TON ecosystem.

However, TON also faces fierce competition from other public chain projects. Whether it can stand out in the future remains to be seen.

4. Trump delivered a speech at the DAS summit, calling for the United States to lead the development of cryptocurrency.

Former U.S. President Donald Trump delivered a video address at the Digital Asset Summit (DAS), emphasizing that the U.S. will lead the future development of cryptocurrencies and the next generation of financial technology. It was the first sitting U.S. president in history to speak at a cryptocurrency-themed conference.

Trump stated in his speech that pioneers will unleash explosive forces of economic growth. His participation highlights the increasing importance and influence of digital assets in financial policy.

Analysts point out that Trump's speech reflects the increasingly friendly attitude of the U.S. government towards cryptocurrencies. During his term, regulators took a more open and inclusive stance on digital assets. This trend continues even after his departure.

However, some analyses suggest that Trump's speech is more a consideration of his personal influence rather than representing the official stance of the government. In the future, the regulatory policies of the United States regarding cryptocurrencies may still change under the influence of the new government.

Overall, Trump's speech undoubtedly had a positive impact on the cryptocurrency industry, helping to improve its position in the traditional financial sector. However, the long-term policy direction still needs to be further observed.

5. Australia launches new cryptocurrency regulatory framework to address banking service restrictions.

The Australian government has launched a new regulatory framework for digital assets, requiring major crypto platforms to obtain financial services licenses, while small businesses may be exempt. This initiative aims to address the service restrictions imposed by banks on crypto companies.

The new framework will implement regulations for cryptocurrency exchanges, custodial service providers, and payment systems. They will need to obtain a financial services license issued by the Australian Securities and Investments Commission. However, small businesses with an annual income of less than 25 million AUD will be granted an exemption.

The move reflects the Australian government's desire to create a conducive environment for the cryptocurrency industry while protecting consumer rights. For a long time, banks' implementation of "de-banking" behavior of crypto companies has been a pain point in the development of the industry. The new framework will provide legal guarantees for crypto businesses to access banking services.

Analysts believe that Australia's regulatory approach is relatively mild, reflecting an inclusive attitude towards cryptocurrencies. With a clear regulatory framework, it is expected to attract more crypto companies to conduct business in Australia and promote industry development.

However, there are also views that the new framework may increase compliance costs for cryptocurrency companies and put pressure on the survival of small firms. The specific implementation details in the future still need further observation.

II. Industry data

1. PI

The recent transaction price of PI is 1.1711 USDT, with a daily increase of +3.00%.

2. BTC

The recent transaction price of BTC is 85865.6000 USDT, with a daily increase of +3.20%.

3. ETH

The recent transaction price of ETH is 2008.4900 USDT, with a daily increase of +4.00%.

4. X

X last traded at 0.0012 USDT, up +43.00% during the day.

5. GT

The recent transaction price of GT is 22.7930 USDT, with a daily increase of +3.10%.

3. Industry News

1. Bitcoin broke through the $94,000 mark in the short term, but whether it can continue to rise remains in doubt.

The price of Bitcoin broke the $94,000 mark on March 21, reaching above $95,000 at one point. This increase was primarily driven by the Trump administration's friendly policies towards cryptocurrencies. Trump called on Congress to pass stable cryptocurrency regulation laws at the Digital Asset Summit and outlined plans to make the U.S. a leading country in the fields of fintech and digital currencies. This positive news directly triggered a strong market response, pushing mainstream cryptocurrencies like Bitcoin to rise across the board.

However, analysts point out that there is still uncertainty about whether Bitcoin can continue to rise in the short term. On one hand, Bitcoin has encountered some resistance around $94,000. If it cannot effectively break through, it may trigger profit-taking; on the other hand, changes in the macroeconomic situation and geopolitical landscape may also affect investor sentiment, thus intensifying market volatility.

According to CoinGlass data, in the past 24 hours, the net outflow of Bitcoin spot funds reached 125 million USD, indicating that some investors are taking profits. Analyst Adam from the Greek live streaming platform Greeks.live stated that large options trading orders show a divergence in market sentiment regarding cryptocurrency prices, with a clear differentiation in market sentiment.

Overall, whether Bitcoin can continue its upward trend in the short term still needs further observation. Investors should closely monitor policy directions, economic data, and changes in market sentiment, and cautiously seize investment opportunities.

2. Ethereum breaks through $2000 but still faces selling pressure.

The price of Ethereum broke through the $2000 mark on March 21, reaching a high of $2460, with a daily increase of over 13%. This surge was mainly driven by the favorable cryptocurrency policies of the Trump administration and investors' expectations for the Ethereum network upgrade.

Analysts point out that Ethereum breaking the $2000 barrier has significant psychological and technical implications, which is expected to lay the groundwork for future market rises. According to the data, about 44% of cryptocurrency users are optimistic about the impact of artificial intelligence on the market. The integration of artificial intelligence can enhance trading strategies and security, provide efficient solutions, and improve user experiences in the crypto space.

However, some analysts hold a cautious attitude towards the future of Ethereum. According to Coinglass data, the net outflow of Ethereum spot funds in the past 24 hours reached 82.16 million USD, indicating that some investors are taking profits. In addition, data from Gate Research Institute shows that a large amount of Ethereum was withdrawn in the past 24 hours, indicating certain selling pressure.

Overall, whether Ethereum can continue to rise in the short term still needs further observation. Investors should closely monitor the progress of network upgrades, changes in regulatory policies, and fluctuations in market sentiment, and prudently seize investment opportunities.

3. XRP skyrocketed by 34%, surpassing ETH in terms of fully circulating market capitalization

The price of XRP surged by 34% on March 21, reaching a high of $2.93. This surge was mainly driven by the positive news of the United States Securities and Exchange Commission ( SEC ) withdrawing its appeal against Ripple. The SEC had previously accused Ripple of raising funds through the sale of XRP, constituting a securities offering, but the withdrawal of the appeal ultimately means that XRP has received favorable regulatory news.

This positive news has directly triggered a vigorous response from the market, driving the price of XRP to surge. According to Deri's options data, traders are closely monitoring and actively participating in the XRP options trading expiring on March 28, with the number of open contracts for call options leading the way.

Analysts point out that the SEC's withdrawal of the appeal against Ripple is expected to bring long-term development opportunities for XRP. According to Coinglass data, the net inflow of XRP spot funds in the past 24 hours reached 24.26 million USD, indicating that investors hold an optimistic attitude towards the future prospects of XRP. In addition, XRP's fully diluted market capitalization once surpassed Ethereum, becoming the second-ranked token in terms of cryptocurrency market value.

However, some analysts hold a cautious attitude towards the future of XRP. Despite favorable regulatory conditions, XRP still faces technical resistance, and whether it can continue to rise remains to be seen. Investors need to closely monitor changes in regulatory policies, technical trends, and fluctuations in market sentiment, and prudently seize investment opportunities.

4. Project News

1. The Sui ecosystem continues to develop, and the Move series project leads a new wave of innovation

Sui is a brand new blockchain project built by a team of engineers who were involved in the design of Diem. It uses the Move programming language and aims to provide a decentralized solution for high performance, high scalability, and asset ownership.

Latest updates: The Sui ecosystem has recently developed rapidly, becoming the most watched star project among Move-based projects. During the TOKEN2049 conference, Sui's performance attracted widespread attention. In addition, the launch of Grayscale Trust and the native USDC on Sui has injected new momentum into the Sui ecosystem. Although there are currently few tradable assets, Sui is nurturing more star projects through incubation programs to enrich the ecosystem.

Market Impact: The Move ecosystem projects, with their high performance and innovative design, are leading a new wave of development in blockchain technology. As the most representative project within the Move ecosystem, Sui's development will have a profound impact on the entire ecosystem. Its technological advancements and ecological construction are expected to promote breakthroughs in performance, security, and application scenarios for Move ecosystem projects, injecting new vitality into the development of blockchain technology.

Industry feedback: Industry insiders generally have a positive outlook on the development prospects of Move-based projects. Analysts believe that the correlation between the Move language and Rust will enable developers to quickly engage, which will attract more excellent projects to join the Move ecosystem. At the same time, the technical advantages and innovative designs of projects like Sui are expected to drive breakthroughs in the performance and application scenarios of Move-based projects. However, some analysts also warn that Move-based projects are still in the early stages of development and need more time to prove their long-term value.

2. Pump.fun launched PumpSwap to accelerate the Meme token ecosystem construction.

Pump.fun is a Meme token issuance platform based on Solana, which recently launched its native decentralized exchange PumpSwap, marking an important step in its ecosystem development for Meme tokens.

Latest news: PumpSwap, as the AMM platform in the Pump.fun ecosystem, aims to provide a seamless trading experience and innovative incentive mechanisms for Meme tokens. PumpSwap will offer automatic migration services for tokens on Pump.fun for free and introduce a creator profit-sharing mechanism to attract more quality projects. In addition, PumpSwap has also reached a strategic partnership with a certain company to promote the integration of DeFi and centralized finance.

Market Impact: The launch of PumpSwap marks that Pump.fun is accelerating the construction of a complete Meme token ecosystem. As a leading Meme issuance platform, the ecological construction of Pump.fun will have a profound impact on the entire Meme track. The innovative design of PumpSwap is expected to provide better liquidity and trading experience for Meme tokens, promoting the development of the Meme token market. At the same time, its collaboration with a certain company will also promote the integration of DeFi and traditional finance, bringing new development opportunities to the industry.

Industry Feedback: Industry insiders have reacted enthusiastically to the launch of PumpSwap. Analysts believe that PumpSwap's free migration service and creator revenue-sharing mechanism will help attract more quality projects, thereby promoting the prosperous development of the Meme token ecosystem. However, some analysts caution that the Meme token market carries significant regulatory risks and project failure rates, and PumpSwap needs to focus on risk control and compliance building.

3. DeFAI opens a new era of DeFi automated trading, with AI-driven innovation

DeFAI(Decentralized AI) is an emerging field aimed at enhancing the functionality of decentralized finance( DeFi) through artificial intelligence technology. By automating, managing risks, and optimizing capital, DeFAI is expected to bring a whole new trading experience to DeFi.

What's new: The evolution of DeFAI has spanned multiple levels, from simple trading automation to complex portfolio management. The newly launched DeFAI product is capable of turning simple text instructions into executable on-chain strategies through AI, enabling automated trading without manual operation. Whether it's regular investment, take-profit and stop-loss, or volatility management, the system can be executed accurately, making complex trading strategies simple and easy to use.

Market Impact: The rise of DeFAI marks a complete transformation in the way DeFi trading is conducted. Traditional DeFi trading has pain points such as complex operations and insufficient risk management, while DeFAI, through AI-driven automation and intelligence, aims to provide ordinary users with hedge fund-level trading tools. This not only lowers the barriers to trading and improves trading efficiency but also helps attract more users to join the DeFi ecosystem, promoting the widespread adoption of DeFi.

Industry feedback: Industry insiders are full of expectations for DeFAI. Analysts believe that DeFAI can effectively address the pain points of DeFi transactions, bringing users a brand new trading experience. However, some analysts remind that the security and reliability of the DeFAI system are crucial, and it needs to undergo thorough testing and optimization to truly realize its value. At the same time, the development of DeFAI also needs to maintain good communication with regulatory authorities to ensure compliance.

5. Economic Dynamics

1. The Federal Reserve keeps interest rates unchanged, and Powell emphasizes that economic risks are "temporary".

Economic Background: The US economy experienced strong growth in 2022, but inflation remained high and the unemployment rate stayed at a low level. The latest data shows that the annualized quarterly GDP growth rate for the fourth quarter of 2022 was 2.7%, and the annual GDP growth was 2.1%. In February, the inflation rate was 6%, higher than expected. The unemployment rate was 3.6%, and the job market remained robust.

Key events: At its monetary policy meeting on March 21, the Fed decided to keep the federal funds rate unchanged in the target range of 4.75%-5%. At the press conference, Powell stressed that the risks to the economy are "transitory" and expects inflation to gradually fall back to the target level of 2%. The Fed will continue to "cautiously and patiently" assess the need for further policy adjustments.

Market reaction: U.S. stocks experienced a brief decline after Powell's speech but then rebounded to close higher. Investors expressed concerns over Powell's "transitory" narrative, believing that the Federal Reserve may have underestimated the persistence of inflationary pressures. The bond market reacted to the prospect of the Federal Reserve pausing interest rate hikes, with the yield on the 10-year Treasury falling to around 3.5%.

Expert Opinion: Goldman Sachs Chief Economist Jan Hatzius stated that the Federal Reserve may need to raise interest rates again later this year to address the ongoing tightening of the labor market. JPMorgan Chase Chief Economist Michael Feroli believes that the Federal Reserve's policy stance remains "dovish," but inflationary pressures may force it to raise rates again in the coming months.

2. The European Central Bank raised interest rates by 50 basis points, and it is expected to continue its tightening policy.

Economic Background: The Eurozone economy slowed down in 2022, affected by the Russia-Ukraine conflict, the energy crisis, and persistently high inflation. The latest data shows that the Eurozone's GDP growth rate for the fourth quarter of 2022 was 0.1%, with an annual GDP growth of 3.5%. The inflation rate in February reached 8.5%, far exceeding the European Central Bank's target of 2%. The labor market remains robust, with an unemployment rate of 6.6%.

Important Event: The European Central Bank decided to raise the three key interest rates by 50 basis points at its monetary policy meeting on March 16. This marks the sixth consecutive rate hike by the European Central Bank, raising the deposit rate to 3%. ECB President Lagarde emphasized that they will continue to adopt a "determined and patient" stance until the inflation rate reliably falls back to the 2% target.

Market reaction: The euro to US dollar exchange rate rose slightly to around 1.09 after the European Central Bank raised interest rates. European stock markets saw a decline, as investors worried that prolonged tightening policies would exacerbate the risk of economic slowdown. The bond market reacted to the European Central Bank's "hawkish" stance, with the yield on 10-year German government bonds rising to around 2.4%.

Expert Opinion: David Folkerts-Landau, Chief Eurozone Economist at Deutsche Bank, stated that the European Central Bank may need to raise the deposit rate to over 4% to effectively curb inflation expectations. Goldman Sachs European economist Jari Stehn believes that the pace of rate hikes by the European Central Bank may slow down as the risks of an economic slowdown are increasing.

3. China's GDP growth in the first quarter is expected to exceed expectations, and policy support has been stepped up

Economic Background: In 2022, China's GDP grew by 3% year-on-year, lower than the expected target of 5.5%, mainly due to the impact of pandemic control measures. In 2023, the government set the GDP growth target at around 5%. Latest data shows that the industrial added value grew by 2.4% year-on-year from January to February, fixed asset investment increased by 5.5% year-on-year, and the total retail sales of consumer goods decreased by 3.7% year-on-year.

Important event: The Chinese government announced a series of new policy measures to support the economy during the "Two Sessions" held in March. These include expanding the fiscal deficit ratio, increasing the scale of special bond issuance, and reducing taxes and fees. The Governor of the People's Bank of China, Yi Gang, stated that it will continue to implement a prudent monetary policy and maintain reasonable liquidity.

Market response: Driven by favorable policies, the stock indices of the Shanghai and Shenzhen markets have rebounded since March, with the Shanghai Composite Index increasing by about 6%. The RMB has slightly strengthened against the US dollar in March. The bond market reacted to the expectations of easing policies, with the 10-year government bond yield falling to around 2.8%.

Expert view: Hong Tao, chief economist of CICC, said that GDP growth is expected to exceed 5% in the first quarter, and economic growth is expected to reach about 5.5% for the whole year. Goldman Sachs Asia economist Zhu Hai believes that China's economic recovery still faces many uncertainties and needs to further increase policy support.

6. Regulation & Policy

1. The U.S. Securities and Exchange Commission clarifies that PoW mining does not constitute a securities transaction.

The U.S. Securities and Exchange Commission (SEC) has clearly defined for the first time that Proof-of-Work (PoW) cryptocurrency mining activities do not constitute securities transactions, thus exempting them from federal securities law regulation, and participants such as miners and mining pools are also not required to register with the SEC.

This statement aims to provide greater regulatory certainty for the cryptocurrency industry. The SEC stated that participants in PoW mining activities do not need to register their transactions with the SEC under the Securities Act, nor do they need to comply with any of the registration exemption provisions of the Securities Act regarding these mining activities. This guidance distinguishes mining activities as management activities rather than investment contracts, exempting miners from federal securities registration requirements.

This initiative reflects the SEC's focus on specific use cases and aims to promote innovation in cryptocurrency regulation. Industry insiders generally believe that this move will bring significant benefits to miners and mining pools, helping to drive industry development. However, the SEC has still not provided a clear definition regarding the regulatory status of other crypto assets.

2. Australia Announces New Cryptocurrency Regulatory Framework to Address "De-Banking" Phenomenon

Australia's Albanese government has unveiled a new regulation for cryptocurrency exchanges and stablecoins that aims to provide greater certainty for industry participants while addressing risks related to consumer protection and market integrity.

The framework will require mainstream cryptocurrency platforms to obtain an Australian financial services license, while exempting small businesses and companies not involved in financial services. Businesses providing tokenized stored value facilities, including some stablecoin issuers, will also be subject to licensing and compliance obligations.

The government stated that this initiative aligns with similar regulatory approaches from the EU and Singapore, aiming to enhance Australia's global competitiveness in the digital asset space. At the same time, the government will also focus on the intersection of cryptocurrencies and "de-banking" issues to ensure that Australia maintains its advantage in global competition.

Industry insiders generally believe that the new framework will help strengthen consumer protection, improve industry transparency and risk management. However, there are also concerns that over-regulation could hinder innovation. Overall, the market welcomed the policy, believing that it would create a more favorable environment for the development of the Australian crypto industry.

3. South Korean financial regulators launch enforcement actions against unregistered overseas exchanges.

The Financial Intelligence Unit (FIU) under the South Korean Financial Services Commission (FSC) has taken enforcement actions against overseas cryptocurrency exchanges that provide services to South Korean users without registration. This action is based on the Act on Reporting and Using Specified Financial Transaction Information.

According to reports, the FIU is considering blocking website access as a primary law enforcement measure, targeting exchanges including MEX, unix, and K.

This initiative aims to strengthen the regulation of the cryptocurrency market in South Korea and protect the rights of investors. The South Korean government has been working to regulate cryptocurrency trading activities and has previously required all exchanges providing services to Korean users to obtain the relevant licenses.

Industry insiders believe that this law enforcement action will further regulate the order of the cryptocurrency market in South Korea, which is beneficial for the long-term healthy development of the industry. However, some are concerned that excessive regulation may affect South Korea's position as a cryptocurrency hub. Overall, the market has mixed reactions to this policy, hoping that regulation can strike a balance between protecting investors' rights and promoting innovation.