XRP Perpetual Futures Open Interest (PFOI) has shot up significantly since March 24 to around $610 million at its peak.

Open interest refers to the number of open futures contracts traders hold at the end of a trading day. It is commonly used to gauge market sentiment and the strength underlying price moves.

Whereas perpetual futures are a form of derivative contract, with no expiration date, that is cash settled – as opposed to settled in the underlying asset.

XRP perps skyrocket

Analysis from the data platform Kaiko showed a spike in XRP PFOI.

Since the start of March, XRP PFOI had been holding relatively steady, at around $300 million. However, on March 22, a significant jump in PFOI occurred – spiking as high as $500 million.

Through to March 26, a downtrend followed. But as we entered this week, futures traders began piling in to lift XRP PFOI much higher – peaking at $610 million on Wednesday.

Further analysis from Kaiko showed spot XRP daily trading volume rising and falling in tandem with PFOI – with a monthly peak at around $2.5 billion on two occasions.

The chart below shows spot volumes being primarily driven by the Korean market.

SEC lawsuit drawing to a close?

In December 2020, the SEC filed charges against Ripple over allegations it had raised over $1.3 billion through the unregistered XRP token.

“the defendants failed to register their offers and sales of XRP or satisfy any exemption from registration, in violation of the registration provisions of the federal securities laws.”

Since then, both sides have stated their case, with many observers noting the fragility of the regulator’s arguments.

While many XRP advocates expect a favorable decision, Judge Torres has yet to give her final verdict.

Some in the XRP community expect the outcome to be delivered before March 31. However, there has been no official confirmation of this deadline.

It should be noted that this date was a predictive estimate from James Filan – a lawyer who has been monitoring this case.

The daily chart below shows anticipation of the case conclusion filtering into the spot price around March 22. Since then, XRP recorded 57% gains at its peak – to post a 46-week high.

Crypto exchanges Coinbase and Kraken have stated that they plan to continue operating in Canada.

Coinbase says it will serve Canadians

Coinbase said in a March 30 blog post that Coinbase Canada has signed an enhanced pre-registration undertaking with Canadian securities regulators.

The company added that its Canadian presence is part of its international expansion efforts. Coinbase said it has created a “tech hub” in Canada with more than 200 engineers and said that its global team will visit Canada on a regular basis.

Coinbase also said that it has hired Lucas Matheson, a former Senior Director of Operations at Shopify, to direct Coinbase’s Canadian operations from Ottawa.

The company’s announcement implied that its interactions with Canadian regulators were favorable. Its various statements suggest that the country’s regulatory framework provides clarity, permits innovation, and protects consumers.

By contrast, Coinbase is currently locked in a dispute with U.S. Securities regulators, which have sent the firm a Wells notice in advance of possible legal action.

Kraken to also operate in Canada

Kraken also said it has filed a pre-registration undertaking with Canada’s Ontario Securities Commission (OSC) and aims to become a registered Restricted Dealer in the country.

COO David Ripley called Canada a region that is “critical to [Kraken’s] mission.” The company emphasized its local presence by stating that it has served Canadian users for over ten years and has more than 250 employees in the country.

Kraken also highlighted the rate of crypto adoption in Canada in a separate blog post. There, it cited statistics from the OSC itself showing that 13% of Canadians currently own cryptocurrency and that 31% of Canadians plan to purchase crypto in one year.

The company said that, despite its commitment, it will make “certain changes” to the services that it offers in Canada in order to remain in line with the new rules.

Canadian rules affect multiple exchanges

Kraken’s change in policy is due to rules that are currently being introduced by Canadian securities regulators. These rules required crypto exchanges to pre-register within 30 days of Feb. 22, in order to continue operating in the country.

Under the new rules, exchanges must segregate crypto assets held by Canadian users and refrain from offering certain services. These requirements came after the collapses of U.S.-based crypto platforms, and the failures of FTX, Celsius, BlockFi, Genesis, and Voyager Digital are explicitly named in a government statement.

Kraken and Coinbase are among the first exchanges to officially declare their intent to remain in Canada. According to the Canadian Securities Administrators, just one other exchange — Crypto.com  — has filed a pre-registration undertaking.

Blockchain.com has stated on its website that it will suspend Canadian custodial and exchange services. OKX has also told users that it will discontinue Canadian services.

Hong Kong is likely to license at least eight crypto companies by the end of the year, according to Forkast News.

The licenses will be issued as a part of Hong Kong’s new crypto licensing regime, as the Forkast News article noted. The information was stated by Angelina Kwan, a former regulator at the Hong Kong Securities and Futures Commission (SFC) and the current CEO of financial services firm Stratford Finance.

New licensing regime

According to Kwan, many crypto companies are looking to establish a business in Hong Kong. Knowing this, the regulators draw up a new licensing program that will come into force in June. Considering the number of demands for a license, Kwan estimates that at least eight companies will be eligible to acquire a license during the second half of the year.

Regarding the most vital aspects of securing a license, Kwan stated:

“Internal controls are very important and by putting it in policies and procedures that they actually follow. Security is key, and so is the walleting system. They’re requiring digital asset firms to have their own walleting system in place. That has to be as a part of the whole process now instead of separating it, unless you have a really good system in place.”

The rules will require all crypto exchanges that allow for the trade of specific large-capitalization tokens. On the other hand, non-fungible tokens (NFTs) are considered securities and are not included within the scope of the new licensing regulations.

Hong Kong and crypto

Hong Kong started to lean on regulations after the FTX collapse. Within a few months, the city’s regulators announced that a new set of regulations would come into effect in June 2023.

According to statements from earlier this month, over 80 crypto businesses are looking to branch out to Hong Kong, while state-owned banks located in the region are also motivated to cooperate with crypto businesses.

Examining Hong Kong’s current stand within the crypto sphere, some experts acknowledge the benefits of the city’s strict crypto regulations.