DeFi's Security Challenges Confront Hong Kong's Efforts to Regulate for International Liquidity

Bitget App

Trade smarter

Bitget

News

Markets

DeFi's Security Challenges Confront Hong Kong's Efforts to Regulate for International Liquidity

Bitget-RWA2025/11/03 20:14

By:Bitget-RWA

- DeFi protocol Balancer lost $128.6M via a V2 pool exploit, triggering pool pauses and a 4% BAL token drop. - Hong Kong's SFC now allows licensed crypto exchanges to access global liquidity pools, easing ringfenced rules to boost market competitiveness. - Ethereum stablecoins hit $2.82T in October volume, with USDC and USDT dominating as traders seek yields amid market volatility. - Hong Kong's reforms align crypto rules with traditional finance, exempting licensed tokens from trading history requirements

DeFi protocol

Balancer

experienced a major security incident on Monday, with hackers siphoning off around $128.6 million worth of assets from its vaults across several blockchains, according to blockchain security company PeckShield, as cited by

The Block

. The attackers took advantage of a flaw in Balancer V2 Composable Stable Pools, enabling them to turn counterfeit fee balances into genuine assets. In reaction, Balancer halted the impacted pools and stated that its engineering team is actively looking into the breach. The platform’s native

BAL

token dropped more than 4% right after the attack, signaling increased market uncertainty, according to the same source.

DeFi's Security Challenges Confront Hong Kong's Efforts to Regulate for International Liquidity image 0

At the same time, Hong Kong’s Securities and Futures Commission (SFC) revealed a significant policy update, now permitting locally licensed crypto exchanges to connect with global liquidity pools, as reported by

Yahoo Finance

. This change moves away from the city’s previous approach, which kept Hong Kong-based order books separate from international markets. By allowing exchanges to access worldwide trading flows, the SFC aims to boost liquidity, enhance price discovery, and strengthen Hong Kong’s role as a leading digital asset center, according to

Bloomberg

The new rules, outlined in a regulatory notice, bring crypto trading regulations closer to those for traditional financial assets and provide exemptions for SFC-approved tokens and stablecoins from the usual 12-month trading history rule, according to a

Yahoo Finance report

. SFC CEO Julia Leung highlighted that these adjustments strike a balance between regulatory protection and market competitiveness, saying, “Once we are confident in investor protection, we do ease restrictions, as we did with global liquidity,” as Bloomberg reported. The SFC also shared plans to finalize licensing systems for crypto brokers and custodians, with the Hong Kong Monetary Authority preparing to issue stablecoin licenses in 2026.

Ethereum’s stablecoin sector reached unprecedented activity in October, with monthly transaction volumes soaring to $2.82 trillion—a 45% jump from September,

The Block

noted.

USDC

led the way with $1.62 trillion in transactions, followed by

USDT

at $895.5 billion. Experts attribute this spike to traders searching for yield opportunities amid ongoing volatility in the crypto market. Stablecoin providers accounted for 65–70% of total protocol revenue during the month, highlighting their dominance in DeFi and international payments, according to

Yahoo Finance

These events underscore the contrasting paths within the crypto sector: while DeFi platforms contend with security threats, regulators in Hong Kong and elsewhere are actively developing policies to attract both institutional and retail investors. As the industry faces hacks, regulatory developments, and new applications, liquidity and innovation continue to drive its expansion.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops

Lock your assets and earn 10%+ APR

Lock now!

- Bitcoin exchange holdings fell 209,000 BTC in six months as institutions shift toward mining infrastructure and structured products amid volatility and regulatory uncertainty. - U.S. Bitcoin ETFs lost $946M last week, driven by Fed Chair Powell's hawkish stance and government shutdown-induced economic data gaps, while European/Asian funds saw inflows. - MicroStrategy's $45B Bitcoin reserve grew to 612,000 BTC through Saylor's accumulation strategy, while Matador aims to add 1,000 BTC by 2026 via $100M co

Bitget-RWA•2025/11/04 01:30

Bitcoin News Update: Investors Move Toward Mining and Infrastructure as Bitcoin Holdings Decline During Market Fluctuations

States and Judges Stand Up for SNAP Amid Congressional Stalemate

- U.S. government shutdown enters 31st day as bipartisan leaders seek resolution while states and judges act to protect SNAP benefits. - Oklahoma allocates $1M/week from emergency funds to support food banks, targeting 680,000 residents as federal aid dwindles. - Federal judges mandate $5B contingency fund use for SNAP, rejecting administration claims of legal barriers to sustain benefits. - Political blame shifts between parties, with Republicans citing Democratic filibuster delays and Democrats accusing

Bitget-RWA•2025/11/04 01:30

States and Judges Stand Up for SNAP Amid Congressional Stalemate

Bitcoin Updates Today: MSTR's Bitcoin Investment: Will Preferred Financing Outperform Market Fluctuations?

- Strategy Inc. (MSTR) plans to issue 3.5M euros-denominated STRE preferred shares with 10% annual dividends to fund bitcoin investments and corporate activities. - The move follows a July 2025 $2.5B STRC preferred stock raise and recent $45.6M bitcoin purchases, expanding holdings to 641,205 units at $4.75B cost. - Market reaction is mixed: shares rose post-announcement but fell in pre-market trading, with analysts noting earnings volatility tied to bitcoin price swings under ASU 2023-08. - Company emphas

Bitget-RWA•2025/11/04 01:30

Bitcoin Updates Today: MSTR's Bitcoin Investment: Will Preferred Financing Outperform Market Fluctuations?

Bitcoin News Update: Major Whale Makes $55M BTC/ETH Move as Crypto ETFs See $62B Inflows Amid Market Rally

- A crypto whale's $55M BTC/ETH long position aligns with $62.34B in BTC ETF inflows, signaling institutional confidence amid mixed technical indicators. - Michael Saylor's Strategy (MSTR) added 397 BTC ($45.6M) to its 641k token portfolio, boosting holdings to $69B as Q3 net income hit $2.8B from unrealized gains. - BTC faces critical $110,163 breakout potential with $115,600-$118,000 resistance, while ETH risks short squeezes below $4,101 amid negative funding rates. - November's historical 42.5% BTC ave

Bitget-RWA•2025/11/04 01:02