Hong Kong's storage sector opens higher; Nanfang's 2x leveraged long product tracking SK Hynix surges nearly 15%

The U.S. House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development held a hearing to discuss how the U.S. Commodity Futures Trading Commission (CFTC) can strengthen oversight of prediction market platforms including Kalshi and Polymarket, as well as the potential role of the Digital Asset Market Clarity Act (CLARITY Act). Carl Kennedy, a partner at New York law firm Katten Muchin Rosenman, testified at the hearing that the CFTC is currently understaffed, making it difficult to effectively regulate the fast-growing prediction market and digital asset sectors. He argued that if the CLARITY Act is passed, it would grant the CFTC more regulatory authority and help it address the "explosive growth" of prediction markets. CFTC Chairman Michael Selig has maintained that event contracts on prediction markets fall under swap products regulated by the Commodity Exchange Act, giving the CFTC exclusive regulatory authority. This position has sparked a jurisdictional dispute between federal and state regulators; multiple states have previously sued Kalshi and Polymarket over sports event prediction markets. Market observers expect related cases may eventually be brought before the U.S. Supreme Court to clarify the division of regulatory authority between the federal and state governments over prediction markets. Additionally, Republican lawmakers plan to push for a vote on the CLARITY Act before Congress’s August recess and will release the bill text soon. In June this year, U.S. gambling industry groups called for the CLARITY Act to explicitly ban event contracts related to sports events and casino gambling.

According to a report by the Financial Times, people familiar with the matter revealed that Samsung is in talks to participate in a new funding round for AI startup Mistral, which could value the French firm at around €20 billion. The move would help Mistral emerge as a key alternative to U.S. tech giants. One insider added that Samsung had previously backed the company via its venture capital arm, and may invest around €1 billion in this new round. The talks reflect a broader trend among AI developers to partner with semiconductor suppliers to address the industry’s gap where computing power demand far outstrips supply. Interest in alternatives to leading U.S. AI models has been rising among European and Asian businesses and governments, following the Trump administration’s ban last month on foreign users accessing Anthropic’s latest Mythos and Fable models. Since its founding, Mistral has focused on developing open-source AI models that allow customers to customize and control them, meaning no company or government can shut down these models.

South Korean retail investors are once again heavily buying high-leverage Contracts for Difference (CFDs). Data from the Korea Financial Investment Association shows that as of July 21, South Korea's CFD holdings have risen to approximately 3.3 trillion won (around $2.2 billion), an increase of nearly two-thirds from a year ago. Data shows that SK Hynix and Samsung Electronics have become the most concentrated leveraged betting targets for South Korean retail investors. Over the past year, SK Hynix's CFD holdings surged nearly 2500% to 235 billion won, while Samsung Electronics' CFD positions expanded to around 217 billion won, five times their level a year prior. CFDs allow investors to gain full exposure to underlying assets by posting only around 40% margin, without actually owning the underlying stocks. Analysts note that when market declines trigger margin calls, the spot stocks held by banks to hedge their risks may be sold off simultaneously, amplifying market volatility. The market is concerned that risks from CFDs, when combined with products like margin trading and leveraged ETFs, could trigger a chain liquidation effect during market corrections. The Korea Capital Market Institute stated that if a large number of leveraged positions are concentrated in the same direction and investors fail to meet margin calls, forced liquidations will further exacerbate market volatility. South Korea saw in 2023 a wave of concentrated liquidations in retail CFD positions, which caused multiple stocks to hit their daily limit declines in succession and prompted regulatory crackdowns. Analysts believe that as South Korean retail investors ramp up high-leverage trading again, similar risks are drawing market attention once more.

Data released by the Bank of Korea on Wednesday shows that driven by rising housing and securities prices, South Korea’s per capita household net worth reached 274.7 million won (approximately $185,600) in 2025, growing by over 9% year-on-year. This growth rate marked a significant jump from the 3% recorded in 2024. In 2025, South Korea’s stock market delivered the strongest performance among Asian markets: the Korea Composite Stock Price Index (KOSPI) surged nearly 76% for the full year, its largest gain since 1999, far outperforming the S&P 500’s roughly 17% rise and the MSCI Asia Pacific Index’s around 25% increase. The core driver behind this historic rally was the cyclical recovery of the global semiconductor industry. Semiconductor giants like Samsung Electronics and SK Hynix—pillars of South Korea’s economy—exerted significant influence on the broader market via their earnings and stock performance. The chief Asia Pacific strategist at Goldman Sachs previously noted that the end of semiconductor inventory destocking, combined with a new demand cycle driven by artificial intelligence, has brought strong earnings recovery expectations for South Korean tech stocks, serving as the core engine pushing the KOSPI upward.

Algorithmic stablecoin Balance Coin has suffered a severe depegging amid a suspected security incident, with its price plummeting from around $0.9954 to $0.001358, a drop of over 99%. Blockchain security firm PeckShield stated that the depegging is linked to an approximately $915,000 attack on 42DAO, the decentralized autonomous organization (DAO) governing the Balance Protocol ecosystem and its BLC token. Another security firm TenArmor said it has detected suspicious attack activities involving GemJoin and 42DAO on BNB Chain. To date, the project team has not disclosed the detailed cause of the incident or subsequent handling plans.

According to The Korea Herald, the K-Capital Market Special Committee under South Korea’s ruling Democratic Party is studying lowering the leverage multiple of leveraged and inverse ETF products tracking individual stock price movements from 2 times to 1.5 times. The proposal follows President Lee Jae-myung’s instruction to “formulate response measures”, with committee chairman Gu Jae-myung confirming on the 22nd that relevant discussions are ongoing. These products were launched during the Moon Jae-in administration, under the policy backdrop of the KOSPI index’s 5,000-point target, and now face adjustments as the index approaches that goal. The special committee is also discussing raising the threshold for convening “beneficiary meetings” — currently, investors holding more than 5% of total subscription shares can call such meetings — to a higher bar, to prevent excessive speculation in leveraged products. Some academics, including professors from Sejong University and Seoul National University, support the move, saying it will boost investment safety and curb excessive volatility. The Financial Services Commission responded that no specific proposals have been submitted for discussion yet. In contrast, Chairman Oh Moon-kyung and others proposed alternative measures such as prioritizing expanding the scale of “liquidity providers (LPs)”, stressing that single-stock ETFs like Samsung Electronics and SK Hynix have performed well recently, so major increases in listing restrictions should be avoided.