Network School founder Balaji Srinivasan says he is seeking a memorandum of understanding with Malaysia after Malaysian authorities probed his Forest City tech community over allegations that it may have hosted Israeli citizens using second passports. Malaysia’s Home Affairs Ministry said it is investigating the start-up community in Johor following claims that Israelis were present in violation of immigration rules.

The situation underscores a challenge for crypto-adjacent “digital utopia” projects: even when communities aim to build their own institutions and economies, they still rely on conventional nation-states for legal certainty. Srinivasan has linked the next phase of his Malaysia expansion plans to getting that assurance.

Key takeaways

• Malaysia’s Home Affairs Ministry is investigating Network School in Johor after allegations of Israeli nationals using second passports.
• Authorities’ initial checks reportedly found that 266 foreign residents held valid documents.
• Srinivasan is asking Malaysia for written assurances—possibly a memorandum of understanding or changes tied to a special economic zone.
• He says further investment in Malaysia, including a $122 million expansion plan, is on hold pending “sufficient assurance” that issues won’t repeat.

Malaysia investigation follows immigration-related claims

Malaysia’s Home Affairs Ministry said Tuesday that it is investigating Network School’s operations in Johor after claims surfaced alleging that the community included Israelis who may have breached immigration laws. In an early review, the ministry said it found no immediate documentary irregularities—reportedly confirming that 266 foreigners under the initiative had valid documents.

According to the ministry’s statement, the probe is tied to specific allegations rather than a blanket rejection of the project. Still, the inquiry puts Network School’s continued ability to attract and house foreign participants under closer scrutiny.

Srinivasan pushes for written legal certainty

Srinivasan said the reason for pursuing an agreement with Malaysia is to provide Network School with “legal certainty” that would allow it to continue investing and operating in the country. Without such a document, he suggested, the community could redirect its capital elsewhere.

In a video addressed to Malaysian Prime Minister Anwar Ibrahim, Srinivasan said he wants more than general statements welcoming tech; he wants personal, written confirmation that Network School will be considered welcome. He also indicated he is open to different legal mechanisms, including a memorandum of understanding or modifications tied to a special economic zone provision.

While Srinivasan did not lay out specific terms publicly, his messaging focused on predictability: investors and community operators need clarity about the legal status of participants, not just broad political signals.

He also said he is pausing any further investment in Malaysia, including a planned $122 million expansion, until he receives “sufficient assurance” that the immigration issues raised during this episode do not recur.

How the allegations surfaced

Claims that Network School was harboring Israeli citizens were traced back to an Instagram post from “Malaysian Protest 4 Palestine,” an activist group that accused the school of becoming a “gathering place for Israeli entrepreneurs.” In its course of action, the post helped spur immigration scrutiny that then moved to the Malaysian Home Affairs Ministry.

Malaysian policy on entry for Israeli passport holders is central to the dispute. The article notes that Israeli passport holders are forbidden from entering Malaysia, a Muslim-majority country, without written permission from the Malaysian Ministry of Home Affairs—reflecting Malaysia’s lack of diplomatic relations with Israel and its stated position of not recognizing Israel.

Importantly, while the investigation is ongoing, the ministry’s initial checks reportedly did not find immediate evidence—at least at the documentation level—that foreign residents lacked valid paperwork. That creates a key uncertainty going forward: authorities may still need to determine whether the allegations relate to residency status, identity verification, the use of alternate travel documents, or other aspects not covered by “valid documents” alone.

Why this matters for crypto-linked community models

Beyond the specifics of one tech community, the episode reflects a recurring tension for crypto-leaning projects that describe themselves as building new social and economic systems. Such initiatives often emphasize borderless or community-driven norms, but they still require host governments to provide stable, enforceable rules—especially when the project involves foreign nationals and long-term operations.

For investors and participants, the difference between informal tolerance and formal assurance can determine where capital goes next. Srinivasan’s decision to pause a large expansion plan suggests Network School is treating immigration uncertainty as a material risk to its business continuity, not a temporary public-relations issue.

If Malaysia provides the kind of written clarity Srinivasan is requesting, the project could regain confidence for future fundraising and staffing. If not, the story hints at a broader pattern: even when “build-first” communities develop successfully, compliance and policy certainty may become the bottleneck.

Readers should watch for what Malaysia’s Home Affairs Ministry concludes in the investigation, and whether any formal agreement—such as a memorandum of understanding or changes tied to existing special economic zone rules—emerges that addresses the specific compliance concerns raised in this case.

Network School founder Balaji Srinivasan is seeking a memorandum of understanding with Malaysia after authorities probed his Forest City tech community over allegations it was hosting Israeli citizens using second passports. 

Malaysia’s Home Affairs Ministry said Tuesday it was investigating Srinivasan’s start-up community in Johor following claims it included Israelis in violation of immigration laws. Initial checks found all 266 foreigners held valid documents. 

Srinivasan said the agreement would give Network School legal certainty to continue investing in Malaysia. Without it, he said, the community could take its capital to countries that are more welcoming. 

“I’d like to have a document which says not just abstractly that tech is welcome … but rather that we’re personally welcome,” Srinivasan said in a video directed at Malaysian Prime Minister Anwar Ibrahim on Thursday. 

The episode highlights a tension faced by many crypto utopias, which aspire to build digital-native communities with their own institutions and economies, but still depend on conventional states for legal certainty. 

Related: Balaji calls for more ‘crypto tools’ for refugees amid Middle East tensions

“If not, then we will readily go somewhere else because I don’t want to be where we’re not welcome,” he said.  

Srinivasan also announced that he is putting any further investment in Malaysia, including a $122 million plan to expand its community, on hold until it gets “sufficient assurance” that such issues don’t recur. 

Instagram post led to immigration probe

Claims that the Network School was harboring Israeli citizens have been traced back to a social media post on Friday from activist group “Malaysian Protest 4 Palestine,” which accused the school of becoming a “gathering place for Israeli entrepreneurs.” 

Israeli passport holders are forbidden from entering Malaysia, a Muslim-majority country, without written permission from the Malaysian Ministry of Home Affairs, as Malaysia does not recognize Israel and does not have any diplomatic relations with the country. 

Magazine: Gambling on random Pokémon cards: Onchain gagcha hits record high as crypto sinks

South Korea has raised interest rates for the first time since January 2023, shifting monetary policy toward tighter conditions in one of the world’s most active retail crypto markets.

The Bank of Korea raised its benchmark rate by 25 basis points from 2.50% to 2.75% on July 16. All seven members of the Monetary Policy Board supported the decision. The central bank also said further increases may be needed depending on inflation, growth and financial stability conditions.

Bank of Korea shifts toward tighter monetary policy

The rate increase was widely expected. A Reuters poll found that 36 of 37 economists expected the central bank to raise its policy rate to 2.75%.

The Bank of Korea cited stronger exports and investment, persistent inflation and risks to financial stability. June consumer inflation reached 3.2%, while the central bank expects economic growth to exceed its previous 2.6% forecast by a wide margin.

Governor Hyun Song Shin said developments in growth, inflation and financial stability all supported a rate increase. The bank also said monetary policy may need to remain on a tightening path, with future decisions depending on economic data.

Higher interest rates generally raise borrowing costs and can reduce demand for speculative assets. For crypto markets, the direct effect may depend on whether tighter local financial conditions reduce the amount of won available for trading.

South Korea remains a major retail crypto market

South Korea continues to play an important role in global cryptocurrency trading. Local exchanges such as Upbit and Bithumb regularly generate large volumes in won-denominated markets, especially for altcoins.

As previously reported by crypto.news, XRP briefly became the most traded asset on Upbit in May, recording about $110.9 million in daily volume compared with $88.6 million for Bitcoin and $67 million for Ethereum. That trading pattern showed the continued influence of Korean retail traders on individual crypto markets.

Recent listings also show that crypto exchanges continue to target Korean traders. As reported by crypto.news, Upbit added Derive’s DRV token to its KRW, BTC and USDT markets on July 14, while Bithumb also introduced a won trading pair.

Crypto demand had already weakened before the rate hike

The rate increase comes after local crypto activity had already fallen from earlier peaks. However, cryptocurrency holdings among South Korean investors dropped from about $83.3 billion in January 2025 to $41.4 billion by February 2026.

Daily trading volume across five major domestic exchanges also declined from about $11.6 billion in December 2024 to roughly $3 billion in February. Won deposits held at exchanges fell from 10.7 trillion won to 7.8 trillion won, pointing to weaker cash demand for crypto trading.

Higher rates could add another restraint on speculative activity if households choose deposits, bonds or other yield-bearing assets over cryptocurrencies. However, crypto prices also depend heavily on global monetary policy, institutional flows and broader market conditions.

Further rate hikes could keep liquidity under pressure

The Bank of Korea has left the door open to additional tightening. Reuters reported that many economists expect at least one more increase this year, potentially taking the benchmark rate to 3.00%.

For South Korea’s crypto market, the policy shift comes as local retail participation has already cooled from previous highs. Further increases could keep domestic liquidity tighter, while stronger global institutional demand may become more important in supporting broader crypto risk appetite.

Cantor and Securitize have formed a partnership to bring blockchain infrastructure directly into initial public offerings and follow-on stock sales, creating a pathway for companies to raise capital and issue securities onchain.

Under the agreement announced on July 15, Cantor will provide its equity capital markets and trading capabilities. Securitize will handle the infrastructure used to issue, distribute and service the tokenized securities. Its SEC-registered broker-dealer affiliate, Securitize Markets, will also participate in the offering and settlement process.

Partnership takes tokenization into primary markets

The collaboration differs from many existing tokenized stock products because it brings blockchain technology into the original issuance process. Companies could conduct IPOs or later share offerings using onchain infrastructure while remaining within the established framework for regulated public offerings.

The companies said the approach could modernize ownership records, distribution and settlement. Carlos Domingo, co-founder and CEO of Securitize, said “public companies shouldn’t have to choose” between traditional capital markets and blockchain infrastructure. The partnership does not yet name a company planning to use the new model or provide a date for its first offering.

Securitize builds on its own tokenized public shares

The agreement follows Securitize’s own move into public markets. The company listed on the New York Stock Exchange under the SECZ ticker on July 2 and simultaneously issued tokenized versions of its common shares on Solana and Avalanche.

Those blockchain-based shares represent the same SECZ common stock rather than a separate share class or synthetic product. Securitize had entered public markets through a business combination with Cantor Equity Partners II, a deal expected to deliver about $400 million in gross proceeds before expenses.

Wall Street expands its tokenization efforts

The Cantor partnership arrives as large financial institutions move more traditional securities onto blockchain networks. As reported by crypto.news, DTCC recently launched a tokenization initiative involving BlackRock, JPMorgan, Goldman Sachs, Vanguard and other major financial firms.

The New York Stock Exchange has also taken steps toward blockchain-based securities. As previously reported, the exchange proposed allowing eligible tokenized shares to trade alongside traditional securities while retaining the same rights, ticker and other ownership features. Securitize has separately worked with the NYSE on its planned tokenized securities platform.

Issuer-sponsored model keeps the actual security onchain

The Cantor-Securitize model centers on issuer-sponsored tokenization. Under the structure described by the companies, the blockchain token would represent the actual security rather than a wrapper, special-purpose vehicle or synthetic exposure linked to a stock.

Cantor Co-CEO and Global Head of Equities Pascal Bandelier said “tokenization is becoming part of mainstream capital markets.” The partnership now aims to apply that technology directly to capital raising rather than limiting it to funds or secondary-market trading.

Securitize has already expanded across institutional tokenization, including work with major asset managers and more than 650 funds, according to earlier crypto.news coverage. The new Cantor partnership extends that strategy into IPOs and follow-on offerings, although the companies have not yet announced the first issuer that will use the platform.

Bitcoin’s near-term direction appears increasingly tied to where leverage is concentrated in the futures market, according to liquidation heatmap readings. As BTC tests the area around the low-$60,000s—holding above $64,000 at the time of writing—price action is gravitating toward liquidity “magnets” where traders have the most to lose if the market moves.

Hyblock’s liquidation heatmap points to a key cluster of short positions between $65,500 and $66,000, positioned about 3% away from current pricing. If BTC pushes through roughly $65,600, that pocket of liquidity could be triggered, potentially helping fuel a move toward the next notable ceiling around $67,000.

Key takeaways

• A dense short-position cluster sits between $65,500 and $66,000, roughly 3% above current price, making $65,600 a potential inflection point.
• Support is layered below with a notable long-side liquidity band around $63,500 to $63,750, about 1% under current pricing.
• Deeper liquidity pools are visible at $63,000 to $63,250 and $62,500 to $62,750, which may matter if the market slips lower.
• Across the tracked window, long-side liquidity outweighs short-side liquidity by nearly 2-to-1, hinting that leverage built over the past month may not be fully unwound.
• A bearish outlier liquidation band near $55,000 stands out, suggesting that a breakdown—especially below $62,500 to $63,750—could accelerate downside.

Where liquidation clusters could pull price

Liquidation heatmaps illustrate how concentrated leverage is at specific price levels. When markets move toward those levels, forced position closings can compound the move, creating short-term momentum in either direction.

In this case, the most prominent overhead liquidity comes from shorts stacked between $65,500 and $66,000. This area sits close enough to current trading to plausibly act as a near-term target if BTC continues to grind higher. Hyblock’s data suggests that a push beyond $65,600 could put the cluster “in play,” increasing the odds of a faster run toward $67,000.

On the downside, Hyblock shows multiple long-side support zones. The closest concentration lies between $63,500 and $63,750, roughly 1% below current pricing. Additional liquidity pockets appear at $63,000 to $63,250 (about 1.5% lower) and $62,500 to $62,750 (about 2.3% lower). Together, these levels form a tiered map of where liquidations could either cushion dips—or, if breached, remove support quickly.

Importantly, the balance of liquidity is not symmetrical. Hyblock’s tracked window shows long-side liquidity outweighing short-side liquidity by nearly two to one. While that does not guarantee upside, it implies that—based on where leverage appears to sit—the market may be more prone to short-term upward pressure if BTC reaches the upper liquidity shelves first.

Rangebound trade structure backed by open interest and funding

The liquidation picture is only part of the story. The article notes that recent price behavior has leaned toward a $60,000 to $67,000 range, and that derivatives positioning metrics broadly align with a market that is not fully trending.

Two signals in particular are cited: aggregate open interest (OI) and the funding rate. Open interest had been elevated earlier, but it has since eased. Specifically, the data referenced shows OI has come down by more than 3% from a Tuesday peak, yet BTC’s price has barely moved in the same span.

At the same time, funding is described as having cooled toward neutral. Funding neutrality often corresponds with reduced directional conviction in perpetual markets; it can also mean traders are less aggressively paying for long or short exposure at that moment, even if liquidation levels remain influential.

The piece further states that spot and futures flows have been skewed toward the buy side over the past week, with spot activity and cumulative volume flows—also sourced from Hyblock—supporting the idea that dip-buying has not fully disappeared.

The $55,000 liquidation band: a risk scenario to monitor

Beyond the near-term clusters around $65,500–$66,000 and the layered support below $63,500, Hyblock’s month-long liquidation heatmap highlights a much larger bearish outlier.

A wide liquidation band near $55,000 is described as standing out more than almost anything else on the chart when using a full month lookback. The logic is straightforward: if price action weakens enough to break through key supports—particularly the $62,500 to $63,750 zone—then the market could become exposed to lower-price leverage unwinds that have been building over longer horizons.

In other words, while the most “actionable” levels may currently be close to the prevailing price, the existence of a substantial liquidity magnet farther down adds asymmetry to the downside risk. It suggests that a deeper move would not just be a continuation of the existing range—it would likely involve a regime shift where forced selling dynamics become more pronounced.

What traders should watch next

For the next decision point, focus on whether BTC can move cleanly toward $65,600 and test the short-heavy shelf between $65,500 and $66,000; doing so would be consistent with the liquidation-driven upside path toward $67,000. If instead BTC loses the nearest support bands around $63,500–$63,750 and then $62,500–$63,750, the heatmap implies that downside could accelerate toward deeper liquidity pockets, including the prominent band near $55,000.

With three weeks left on the Senate calendar, the President stopped selling crypto’s biggest bill on its merits and started selling it as a race against Beijing. The pitch is a tell, and it reveals exactly which argument Washington has already lost.

For most of its life, the Digital Asset Market Clarity Act has been sold on plumbing. It would decide which American regulator supervises which digital asset, split jurisdiction between the Securities and Exchange Commission and the Commodity Futures Trading Commission, and replace a decade of enforcement-by-lawsuit with written rules. That is a technocratic argument, and it is the argument that carried the bill through the House and out of the Senate Banking Committee. For readers new to the market-structure fight, crypto.news has also explained how the bill splits SEC and CFTC jurisdiction. On July 13, with the bill stalled and the calendar closing, the President changed the pitch. In a Truth Social post, Trump said the Senate should pass the CLARITY Act, warned that China and other countries would like to take complete and total control of this major financial moment as well as artificial intelligence, and closed by telling lawmakers not to let China win on either front. The plumbing argument had not worked. The new one is about national power, and the switch itself is the most informative thing that has happened to this bill in weeks.

The post that reframed the bill

The specifics of the moment matter, because the timing was not accidental. Trump opened the post by invoking Senator Lindsey Graham, the South Carolina Republican who died on July 11 at 71 following a sudden illness, and who advocacy groups had counted as a reliable supporter of the industry, including his vote for the stablecoin law CLARITY builds on in 2025. Framing passage as a tribute to a dead colleague is a legislative pressure tactic as old as Congress. Attaching it to a warning about Beijing is newer, and it tells you which audience the White House thinks it still has to move.

The administration amplified the message in unison. Patrick Witt, the White House digital-assets adviser, called the days ahead a critical week and pointed to the one-year anniversary of the GENIUS Act on July 18 as proof of what coordinated action can produce. Federal regulators joined in: CFTC Chairman Mike Selig urged lawmakers to write clear statutory standards, arguing that continued reliance on enforcement actions and statutes drafted before blockchain markets existed threatens American leadership across crypto, artificial intelligence, and financial technology. A coalition of more than 200 companies pressed Senate leadership to bring the bill to the floor. The House Financial Services digital-assets subcommittee scheduled a field hearing at Federal Hall in New York for July 17, titled around the idea that CLARITY enables innovation.

That is a full-court campaign, and campaigns of that intensity are not run from positions of strength. The bill missed the July 4 signing ceremony the White House had informally targeted. It has sat since June 1 at Calendar No. 423 on the Senate Legislative Calendar, eligible for a floor vote nobody has scheduled, with no cloture motion filed. The Senate returned July 13 with roughly three working weeks before the August recess, after which the midterm campaign consumes the political oxygen. The China frame is what a bill sounds like when its sponsors have run out of runway and are reaching for the one argument that has historically moved reluctant senators of both parties.

What Washington is actually selling against

The comparison Trump is drawing deserves scrutiny, because the two systems are not competing to do the same thing. Mainland China has banned the private crypto activities that CLARITY would regulate, including trading and mining. What Beijing has built instead is the e-CNY, a central bank digital currency issued and supervised by the People’s Bank of China, a state-run digital money that gives the central bank direct visibility into transactions. That is not a rival crypto market. It is the philosophical opposite of one.

The American model, as the administration frames it, puts privately issued dollar stablecoins at the center and keeps the state out of retail digital money entirely. This is where the CLARITY Act contains a detail that complicates the China pitch in an interesting way: the House version of the bill carries anti-CBDC provisions, barring Federal Reserve banks from offering certain products directly to individuals and prohibiting the use of a central bank digital currency for monetary policy. In other words, the bill Trump is selling as the answer to China is partly built to prevent America from ever fielding China’s actual product. The competition is not two countries racing to build the same thing faster. It is two countries betting on incompatible architectures, one state-issued and surveilled, one private and regulated.

There is a third model that goes unmentioned in the framing, and its absence is telling. Europe already passed comprehensive crypto market rules under MiCA, which means the honest competitive comparison for the United States is not with Beijing but with Brussels, a jurisdiction that did the boring legislative work first and now has the regulatory certainty American firms say they want. Naming Europe would make the argument about American legislative dysfunction. Naming China makes it about a foreign threat. The second frame is more useful politically, which is precisely why it was chosen.

The case that clarity is a competitiveness asset

Strip away the rhetoric, and there is a serious argument underneath, one that does not depend on Beijing at all. American crypto regulation has been conducted for years primarily through enforcement, with agencies applying securities statutes written in the 1930s and 1940s to assets that did not exist when those laws were drafted. Firms have responded rationally by domiciling offshore, which means the activity continues, the jurisdiction changes, and American regulators lose visibility over the very conduct they wanted to police. Selig’s point stands on its own merits: a country cannot supervise what it has pushed out of its borders.

The competitiveness case has a concrete shape. American leadership in digital finance rests on capital markets, legal certainty, developer talent, banking access, and exchange liquidity. Delayed rules weaken each of those, even while demand for the assets themselves stays strong. A framework that tells firms which regulator governs them, what disclosures they owe, and what registration path exists would let institutional capital participate at a scale that legal ambiguity currently prevents. That argument explains why more than 200 companies signed on and why the industry treats this as its top policy priority, and none of it requires believing that China is about to seize the crypto market.

The geopolitical version of the argument, at its strongest, is about the dollar. The GENIUS Act created a framework for payment stablecoins, the overwhelming majority of which are dollar-denominated, and dollar stablecoins have become an unexpectedly effective instrument of American monetary reach, putting dollar exposure in the hands of people who cannot easily access dollar banking. If digital money is where cross-border payments eventually migrate, then the country whose currency dominates that layer inherits a meaningful advantage. In that reading, the CLARITY Act is not about beating China at crypto. It is about extending the dollar’s incumbency into the next rail, which is a real strategic interest even if the invocation of Beijing is theatrical.

The case that China is a lobbying device

The skeptical reading is simpler: the frame is aimed at a domestic audience, not a foreign adversary, and it is designed to make a stalled negotiation feel like a national emergency. Nothing about China’s posture changed in July. The e-CNY has been in development for years, the trading ban is old news, and no Chinese policy shift prompted the post. What changed was the Senate calendar and the vote count. When the substance of a bill cannot close the deal, urgency becomes the substitute, and few things generate urgency in Washington faster than the suggestion that Beijing is winning.

The framing also collides with an inconvenient fact about the electorate. A survey commissioned by CoinDesk found that just 1 percent of registered voters ranked crypto as a top priority heading into the 2026 election. Senator Elizabeth Warren has made that number a centerpiece of her opposition, arguing the Senate is spending its scarce floor time on legislation written by the crypto industry for the crypto industry while voters are preoccupied with the cost of groceries, utilities, and health care. Whatever one makes of her policy views, the political arithmetic is hard to dispute: there is no constituency pressure driving this bill, which is exactly why its advocates need an external threat to manufacture stakes.

There is a further problem with the competitiveness claim as applied. If the concern is that activity migrates offshore without rules, the natural rejoinder is that America already has a stablecoin law and a functioning, if messy, enforcement regime, while the specific provisions holding CLARITY up are not the ones foreign competitors care about. Nobody in Beijing has a view on whether Coinbase may pass through yield on USDC balances, or on the precise wording of a developer liability shield. Those are domestic fights among American banks, American law enforcement, and American politicians. Wrapping them in a flag does not resolve any of them, and the senators blocking the bill are unlikely to be persuaded that their objections are unpatriotic.

South Korean retail investors have reportedly lost about 2.15 trillion won, or roughly $1.45 billion, from leveraged trading over the past month as sharp market swings triggered widespread margin calls.

According to market reports, more than 1.2 million retail leverage accounts had reached margin-call thresholds by July 13. Estimates placed the number of accounts fully liquidated by brokerages between 320,000 and 460,000, although the broader account figures have not been independently confirmed by regulators.

Young investors bear the largest share of liquidations

Investors in their 20s and 30s reportedly accounted for 62% of accounts hit by full forced liquidations. Many retail traders had built leveraged positions during South Korea’s strong equity rally, increasing their exposure to losses when prices reversed.

The losses followed months of heavy borrowing by retail investors. Reuters reported in June that borrowed investment in South Korean equities had reached a record 60 trillion won by the end of May. Regulators were already reviewing safeguards around leveraged exchange-traded funds after acknowledging concerns about their rapid growth.

Forced sales accelerate during volatile market swings

The Korea Financial Investment Association has recorded a sharp increase in forced stock sales linked to unpaid brokerage balances. Market reports put actual forced sales from unsettled trades at 451.9 billion won between July 1 and July 13.

The pressure had already been building before July. According to Seoul Economic Daily, forced sales reached 1.12 trillion won in June, the highest monthly total of 2026. The figure rose from 707.6 billion won in May as sharp KOSPI swings repeatedly caught leveraged investors on the wrong side of the market.

When investors use short-term brokerage credit, they must provide additional funds if their positions fall below required levels. Brokers can sell the shares when clients fail to cover the shortfall, locking in losses during periods of falling prices.

Retail money had shifted from crypto into stocks

The leverage rout follows a major change in how South Korean retail investors allocated their money. As previously reported by crypto.news, crypto holdings on the country’s major exchanges fell from $83.3 billion in January 2025 to $41.4 billion by February 2026 as investors increasingly moved toward equities.

Crypto trading activity also weakened as the stock market gained momentum. A later crypto.news report found that won-based crypto trading volume fell 71% between August 2025 and May 2026, while KOSPI trading volume rose 243%.

The current equity-market losses therefore affect a retail investor base that had already moved substantial capital away from digital assets and into stocks.

Tighter financial conditions add another pressure point

The deleveraging comes as South Korea also shifts toward tighter monetary policy. The Bank of Korea raised its benchmark interest rate by 25 basis points to 2.75% on July 16, its first increase since January 2023.

Higher borrowing costs could place additional pressure on leveraged trading while making investors more cautious toward risk assets. The effect may extend beyond equities because South Korea remains an active crypto market where retail trading can influence global volumes, particularly for altcoins such as XRP. As previously reported, Korean trading activity remains an important source of liquidity for several major digital assets.

Bitget has launched a Cross-Asset Unified Account that combines cryptocurrency and tokenized U.S. equities within one margin system.

The exchange said the new structure supports more than 370 eligible assets, including 100 US stock tokens known as rTokens.

According to the official Bitget announcement, users can hold eligible stock tokens while also using them as margin for futures and margin trading. They can also pledge supported rTokens as collateral to borrow stablecoins rather than selling their positions.

Bitget expands unified margin beyond crypto

Traditional exchange accounts often separate collateral across individual products and positions. Bitget’s Unified Trading Account already allowed several cryptocurrencies to contribute toward one collateral pool. The latest update extends that model to tokenized equities and other eligible real-world assets.

The initial list includes tokens linked to Apple, Amazon, Tesla, Nvidia, Microsoft, Meta, JPMorgan, Walmart, Strategy, the S&P 500 ETF and the Nasdaq-100 ETF. Bitget applies collateral discount rates of up to 95%, depending on the asset and the amount held. Borrowing rates change hourly based on market supply and demand.

Bitget CEO Gracy Chen said “the real breakthrough” comes when tokenized stocks can work with the same flexibility as crypto. She said a stock position should be able to support another trade or provide liquidity instead of remaining isolated within an account.

rTokens gain a wider role across trading products

The launch expands an earlier rollout that covered a smaller group of tokenized assets. Bitget enabled 15 tokenized stocks and ETFs as collateral for USDT-margined futures in June. The list included assets linked to Apple, Tesla, Nvidia, Microsoft, Amazon, SPY and QQQ.

The new account raises that number to 100 stock tokens and adds broader uses for the assets. Eligible rTokens can now contribute to margin requirements, support borrowing and provide exposure to their linked equities. Bitget also says holders can receive cash dividend distributions where applicable.

The company warns that using tokenized assets as collateral can increase overall account leverage. A fall in collateral value can lead to margin calls or liquidation, while borrowed funds also carry interest costs.

Reality platform supports Bitget’s tokenized stock push

The Cross-Asset Unified Account builds on Bitget’s Reality platform, which launched in May. As reported by crypto.news, Reality offers rTokens linked to publicly traded US stocks and ETFs, with Bitget saying the assets are backed 1:1 through regulated brokerage arrangements.

Bitget now says Reality-linked rTokens have passed $100 million in assets under management during their first month and generated more than $671 million in cumulative trading volume. Those figures come from the company and have not been independently verified in the announcement.

The exchange has also reported stronger liquidity across some tokenized markets. As previously reported, a Bitget and Block Scholes study found that its Nvidia-linked perpetual market reached about 75% of the liquidity depth of its Bitcoin spot market.

Exchanges push tokenized assets toward broader utility

Bitget’s latest rollout comes as crypto platforms move tokenized stocks beyond simple price exposure. The company is positioning rTokens as assets that can serve several purposes inside a single account instead of functioning only as instruments that track equity prices.

The broader trend is also extending into wallets and trading infrastructure. Bitget Wallet upgraded its trading infrastructure in June to support direct transactions involving tokenized real-world assets.

Bitget plans to add more assets to its Cross-Asset Unified Account. The launch expands its earlier collateral framework while placing tokenized stocks, crypto assets and borrowing functions inside the same capital pool.