The U.S. Treasury Department is urging Congress to grant it wider enforcement powers to use against foreign cryptocurrency service providers as part of its goal of protecting national security.

Solana, the high-speed blockchain network known for its low transaction fees, has suffered from a significant congestion problem in recent days, with users reporting slow processing times and even a large number of transactions being dropped.

Several major Chinese asset management firms are looking to enter the Bitcoin exchange-traded fund (ETF) market through their Hong Kong subsidiaries, at a time in which China's strict regulations on cryptocurrency trading and mining prevent domestic firms from launching such ETFs within the mainland.

Top stories in the Crypto Roundup today:

• Treasury Calls for Broader Authority to Combat Crypto Threats
• Solana Developers Move to Address Network Congestion
• China-Based Asset Giants Eye Hong Kong for Bitcoin ETFs
• Binance Volumes Rise 120% MoM, Reaching Highest Level Since May 2021

Treasury Calls for Broader Authority to Combat Crypto Threats

The U.S. Treasury Department is urging Congress to grant it wider enforcement powers to use against foreign cryptocurrency service providers as part of its goal of protecting national security.

In written testimony submitted ahead of a Senate hearing on Tuesday, Deputy Secretary Adewale Adeyemo highlighted the growing challenge of illicit actors using cryptocurrencies to hide their identities and circumvent traditional financial systems.

Adeyemo wrote that malicious actors, including terrorists, are constantly seeking “new ways to move their resources in light of the actions we are taking to cut them off from accessing the traditional financial system.”

Adeyemo cited instances of Iran's Quds Force, a part of the Islamic Revolutionary Guard Corps, using crypto to funnel funds to Hamas and Palestinian Islamic Jihad, and pointed to North Korea and Russia as state actors increasingly using digital assets.

To counter these threats, Adeyemo called for a new tool enabling the Treasury to impose secondary sanctions on foreign crypto service providers facilitating illicit activity. This would enhance the department's ability to target actors exploiting the limitations of existing sanctions on traditional financial transactions.

The Treasury Department is also seeking explicit authority to oversee key players in the digital asset space, including cryptocurrency exchanges. This expanded reach would allow them to regulate foreign crypto platforms that exploit the U.S. financial system while posing a national security threat.

The Treasury is also proposing an expansion of its oversight to encompass major cryptocurrency players including exchanges, as well as powers to target overseas platforms that while engaging with the U.S. financial system, may pose risks to national security.

Solana Developers Move to Address Network Congestion

Solana, the high-speed blockchain network known for its low transaction fees, has suffered from a significant congestion problem in recent days, with users reporting slow processing times and even a large number of transactions being dropped.

The congestion appears to stem from a wave of spam transactions, where bots attempt to flood the network and prioritize their own activity over legitimate transactions. This congestion is further compounded by a recent explosion in memecoin-related transactions, creating extreme demand for limited space on Solana's blockchains, effectively blocking access for many regular users.

The first quarter this year saw a record number of new tokens launched on Solana's decentralized exchanges, with memecoins leading the charge as memecoin traders flocked to the network over its low transaction fees.

Matt Sorg, a representative from the Solana Foundation, compared Solana's architecture to the internet's infrastructure. He explained how the network's unique transaction processing system, while efficient, can be susceptible to being overwhelmed by spam, leading to transaction failures.

Solana developers are actively working on solutions, with co-founder Anatoly Yakovenko and strategy lead Austin Federa assuring users that fixes are underway, but may take some time to fully implement.

The network’s upcoming 1.18 update is set to improve scheduling, while the integration of dynamic priority fees within decentralized applications aims to streamline the user experience by minimizing processing delays.

China-Based Asset Giants Eye Hong Kong for Bitcoin ETFs

Several major Chinese asset management firms are looking to enter the Bitcoin exchange-traded fund (ETF) market through their Hong Kong subsidiaries, at a time in which China's strict regulations on cryptocurrency trading and mining prevent domestic firms from launching such ETFs within the mainland.

Heavyweight firms Harvest Fund and Southern Fund, each managing over $200 billion in assets, are reportedly exploring the possibility of launching such spot Bitcoin ETFs in Hong Kong.

The move follows the Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) announcing their acceptance of cryptocurrency-based ETFs in late 2023.

The availability of these funds would provide Hong Kong investors with a regulated way to gain exposure to Bitcoin without having to manage the private keys of a cryptocurrency wallet.

Harvest Fund's Hong Kong arm had already preemptively submitted an application for a spot Bitcoin ETF in January, while Southern Fund, which currently offers Bitcoin and Ether futures ETFs in Hong Kong, may also be considering a spot Bitcoin ETF launch.

Binance Volumes Rise 120% MoM, Reaching Highest Level Since May 2021

In March, Binance saw its spot trading volume soar by 121% to $1.12 trillion, reaching its highest level since May 2021. Derivatives trading volumes on the exchange also witnessed a substantial increase, climbing by 89.7% to $2.91 trillion, marking their highest levels since May 2021.

Bitget similarly reported a dramatic rise in its trading volumes, with spot and derivatives volumes increasing by 150% to $90.5 billion and 129% to $794 billion, respectively. This growth saw Bitget become the third-largest derivatives exchange by volume, surpassing Bybit for the first time since 2022.

Dig deeper into the world of cryptocurrency trading with CCData’s latest Exchange Review report.

State of the Crypto by Top Tier Exchange Volume

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