Crypto Morning Brief: Hong Kong Passes Crypto Asset Tax Reporting Bill; Circle Q3 Revenue and Reserve Income Reach $865 Million

Author: TechFlow

Yesterday's Market Updates

Hong Kong Passes Crypto Asset Tax Reporting Bill, To Be Implemented in 2027

According to an announcement by the Hong Kong SAR Government, the Legislative Council has passed the Inland Revenue Amendment (Crypto-asset Reporting Framework and Revised Common Reporting Standard) Ordinance 2026, which will implement the OECD's Crypto-asset Reporting Framework in Hong Kong.

The framework will take effect in 2027, requiring relevant service providers to collect specified information for the Inland Revenue Department (IRD) to exchange with partner jurisdictions starting in 2028. The revised CRS will also become effective in 2028, with the IRD beginning automatic exchange of financial account information with appropriate partners under the new standard starting in 2029.

Justin Sun Seeks ~$264,000 Sanctions Against World Liberty and Its Lawyers

According to U.S. District Court documents for the Northern District of California, Justin Sun and two co-plaintiffs have sought sanctions against World Liberty Financial and its legal counsel, demanding approximately $264,000 in attorney fees and costs. The plaintiffs allege that World Liberty made false disclosures regarding its citizenship status during the litigation.

The plaintiffs state that World Liberty initially only disclosed its Florida citizenship, and nearly three months later supplemented this with information revealing 22 members in its ownership chain whose citizenship includes individuals residing in the UAE and other locations. World Liberty's legal team then argued that the federal court lacked jurisdiction because both sides of the lawsuit included foreign parties.

The amount sought covers attorney fees and costs related to the plaintiffs' opposition to mandatory arbitration. The plaintiffs stated in their filing that they would be forced to re-litigate the case in California state courts; a hearing on the sanctions motion is scheduled for December 10.

Crédit Mutuel Arkéa Confirms Cyberattack, Customer Assets Unaffected

According to Cryptoast, Fortuneo, the online bank under France's Crédit Mutuel Arkéa group, suffered a large-scale fraud attack where perpetrators initiated transfers using forged payee identities, routing funds to cryptocurrency exchange accounts opened with fake credentials. On-chain detective ZachXBT previously estimated the involving amount exceeded $133 million, suggesting actual losses may be higher.

Blockchain analytics firm Bitquery tracked approximately $62.98 million in stablecoins converted into 27,553 ETH via UniswapX within four hours. The funds were subsequently moved through various cross-chain and instant swap services, with a portion converted into the privacy coin Monero (XMR). Kraken has restricted the involved accounts, while Crypto.com has taken steps to freeze related funds. Both platforms confirmed their internal systems and customer accounts remain uncompromised.

On November 4, Crédit Mutuel Arkéa confirmed the attack and fraudulent transactions to Cryptoast, stating the situation is under control, some transactions have been suspended to prevent further fund movement, and customer assets are unaffected. Investigations are ongoing. The bank has not yet disclosed the exact loss amount. ZachXBT noted that actual losses could be even higher if OTC transactions are factored in.

US Democrats Have Secured 6 of 7 Swing States

Reports indicate that out of the seven swing states considered highly competitive in the final phase of the midterm elections, Democrats have swept six of them.

The six states are Texas, Kansas, Ohio, Iowa, Maine, and Michigan. Texas has not elected a Democratic US Senator since 1988, and Kansas has not done so since 1932; victories in both states are expected to be major upsets in American political history. Ohio, previously represented in the Senate by J.D. Vance, also failed to reverse Republican losses. Additionally, Democrats flipped North Carolina and South Carolina, previously held by Republicans, for a combined total of 7 seat flips.

As a result, Democrats are projected to secure 54 Senate seats. Due to disputes arising from candidates sharing the same name, the results for the final swing state, Alaska, remain undecided.

Binance Co-founder CZ: Public Sentiment Analysis Reveals Another Attack

In a post, Binance Co-founder CZ cited an analysis of social media sentiment following the Binance hack, describing it as another coordinated attack targeting Binance.

The analysis author stated that among 1,083 sampled accounts, approximately 11,700 negative posts about Binance were published, garnering around 20.93 million impressions, with 3,354 deemed disinformation. The analysis further noted that among the top 641 most active accounts, 452 exhibited observable coordination patterns with other accounts.

The author clarified that the term "coordination" merely describes behavioral patterns, and factional affiliations are inferential, constituting no accusation that any entity or individual hired or directed these accounts.

Whale Shorts Anthropic Pre-market Contracts on Hyperliquid, Positions Reach ~$25.43 Million

On-chain analyst Ember (@EmberCN) monitored data indicating Anthropic (ANT) is expected to list in roughly two weeks with a projected valuation of $1.75 trillion, while pre-market contracts across platforms reflect a market cap of approximately $1.8 trillion. Viewing this valuation as inflated, a whale is shorting ANT on Hyperliquid's pre-market contracts, with open positions valued at roughly $25.43 million and increasing.

Bhutan Central Bank Approved to Include Bitcoin and Other Crypto Assets in Reserves

According to Apple's published financial statements, Apple reported Q4 revenue for fiscal year 2026 (ending Sept 26) of $114.477 billion, a ~12% increase from $102.466 billion in the prior-year period; diluted EPS was $2.10, compared to $1.85 a year ago.

iPhone revenue for the quarter stood at $57.583 billion, Services revenue at $31.573 billion, Wearables, Home and Accessories at $8.3 billion; Greater China region revenue reached $17.539 billion.

Astrid Ho: Binance Will Fully Cover User Losses, Welcomes Top AI Security Experts

Binance Co-founder Astrid Ho addressed external criticisms regarding Binance's security and access management in a post on X, stating "We acknowledge everything," noting that while Binance is not a perfect company, it is continuously evolving.

Ho outlined three key issues Binance is currently addressing:

First, whether user funds are impacted—Binance will fully cover any losses; she noted that while severe funding gaps could legally lead to bankruptcy or abandonment, Binance remains user-centric and committed to contractual integrity.

Second, how the incident occurred—many experts advised against disclosing details prior to the report, but Binance believes transparency builds trust and hopes the findings serve as a cautionary example for peers regarding social engineering attacks and AI access boundaries.

Third, how to prevent recurrence—Binance has rebuilt security boundaries across departmental access controls, security environments, device updates, and AI tool resets based on zero-trust and least-privilege principles, with subsequent security audit reports to follow.

Ho also expressed openness to welcoming top-tier AI security experts to join Binance.

Circle Reports Q3 Revenue and Reserve Income of $865 Million, USDC On-Chain Volume Up 49% Year-over-Year

According to filings submitted to the US SEC by Circle, the company's total revenue and reserve income for Q3 2026 reached $865 million, up 17% year-over-year; net income from continuing operations was $226 million, up 5%, with diluted EPS of $0.84; adjusted EBITDA came in at $317 million, representing an 85% YoY increase.

BREAKING DOWN the figures: reserve income totaled $658 million, down 8% YoY primarily due to a 61 basis point drop in reserve yield to 3.5%; other revenue reached $207 million, surging 627% YoY, with $182 million derived from the ARC token presale. Sales, transaction, and other expenses amounted to $412 million, down 8% YoY, yielding a profit margin of 52% after deducting distribution costs. As of Sept 30, Circle held approximately $1.7 billion in cash and cash equivalents.

OPERATIONALLY, average USDC circulating supply for Q3 was $73.3 billion, up 8% YoY, ending at $73.9 billion; on-chain volume reached $13.9 trillion, up 49% YoY; stablecoin market share stood at 27%, and wallets holding over $10 in USDC hit 7.3 million, a 16% YoY increase.

IN TERMS OF BUSINESS DEVELOPMENT, Circle Payments Network (CPN) annualized payment volume reached $41.3 billion, alongside signing a definitive agreement to acquire Singapore-based cross-border payment platform Tazapay, expected to close in 2027. Arc mainnet launched on Sept 16 with an initial ARC token supply of 10 billion, slated to transition to a Proof-of-Stake (PoS) mechanism by 2027. Additionally, Binance announced a $100 million investment in Circle to expand strategic cooperation. Circle reduced its workforce by approximately 5% in Q3, incurring roughly $9.15 million in restructuring costs.

CIRCLE maintains full-year guidance unchanged, projecting 2026 other revenue between $310 million and $330 million, with adjusted operating expenses between $570 million and $585 million.

Today's Market Overview

Recommended Reading

12 Key Questions Investors Care About Most After Democrats Sweep Congress

https://www.techflowpost.com/article/35103

This article examines how Democrats reclaiming control of both chambers of Congress following the US midterms will shape American policy shifts and global asset allocation opportunities over the next two years. It argues that while Trump's tax cuts, fiscal stimulus, and AI industrial policies will face greater constraints, they won't be immediately overturned, with political gridlock potentially exacerbating regulatory and fiscal uncertainty.

For markets, the AI investment thesis is shifting from compute expansion to earnings realization: established chipmakers and cloud computing leaders appear relatively resilient, while highly leveraged data center operators grapple with financing, power, and regulatory pressures. Conversely, application-layer companies leveraging AI to boost margins may capture more upside. Regarding asset allocation, US Treasuries and gold could benefit from a weaker dollar and cooling fiscal stimulus expectations, while Asian markets and non-tech sectors warrant attention.

The article concludes by warning investors against simply bottom-fishing tech stocks or betting on a unilateral USD decline. Looking ahead, tracking AI corporate earnings, hyperscaler capex, US inflation and employment data, and whether Congress triggers fresh fiscal confrontations will be paramount. The core driver of this market cycle isn't merely the electoral political shift, but rather a simultaneous re-pricing of AI sector valuations, US fiscal trajectories, and global capital flows.

Vitalik's Digital Minimalism Lifestyle: Is It Right for You?

https://www.techflowpost.com/article/35101

This piece outlines Vitalik Buterin's digital minimalism experiment, centered on reducing algorithmic recommendations, smartphone connectivity, and web apps' grip on personal attention to reclaim agency over one's digital life.

Vitalik shared three key practices: first, using Firefly instead of the official X client to bypass personalized recommendation feeds; second, disabling cellular data on his phone for 100 consecutive days while keeping Wi-Fi active to break constant connectivity habits; third, prioritizing local applications and command-line tools, utilizing apps like CoMaps and Kiwix for offline navigation and knowledge retrieval.

The article also notes these methods aren't universally applicable. Even Vitalik himself struggled to log into Grab when SMS verification codes failed, and offline maps occasionally provided inaccurate data. Rather than completely disconnecting, ordinary users are better off starting with low-effort adjustments like turning off unnecessary notifications, curbing recommendation-heavy content, and downloading offline resources.

The underlying message is clear: digital minimalism isn't about rejecting technology, but rather deliberately deciding when and how to use it, ensuring technology serves you rather than vice versa.

78 Hours, 1,083 Accounts, 11,700 Tweets: The Second Battlefield Following the Binance Hack

https://www.techflowpost.com/article/35102

By analyzing X-platform sentiment data for 78 hours post-breach, this article exposes a parallel narrative war unfolding on social media alongside the actual security incident. The study tracked 1,083 accounts, 11,700 tweets, and ~20.93 million impressions, identifying 3,354 pieces of disinformation across 15 rumor categories including "insider job," "insolvency," "another FTX," and withdrawal rushes. It found that negative sentiment didn't simply fade with news cycles but actively shifted targets as Binance issued compensation promises, released investigation updates, and restored withdrawals; among 641 active accounts, 452 demonstrated observable coordination, clustering into 11 distinct groups.

Notably, the authors explicitly state that observed coordination and ecosystem affinity among accounts do not prove hiring, direction, or funding by any exchange or entity. What the article truly illuminates is that during major exchange crises, disinformation, comment-section mobbing, and competitor traffic redirection on social media can amplify retail panic and even trigger mass asset migrations. Exchange security breaches now extend beyond blockchain infrastructure into the realms of information dissemination and user trust.

a16z Partner: Code is Infinite Debasing—Why Network Effects Are the Ultimate Moat in the AI Era

https://www.techflowpost.com/article/35098

Eddy Lazzarin, Chief Technology Officer at a16z Crypto, argues that AI is drastically depressing software development costs, making codebases and UI designs increasingly trivial to replicate, thereby eroding traditional software moats. What will genuinely matter going forward isn't a dev's speed to ship a product, but rather the uncopyable network resources backing it—deep liquidity, user identity, credit reputation, historical data, and community consensus. Using Uniswap and USDC as examples, the piece highlights that while AI can instantly generate wallets, NFTs, or trading interfaces, it cannot conjure long-tail accumulated liquidity or settlement trust organically. Core competitiveness in the AI age is shifting from reusable code to reusable networks; blockchain's value proposition lies in serving as the foundational layer for internet-wide shared assets, identity, and credit states.