Today in crypto: U.S.–China tech war heats up

U.S. weighs DeepSeek ban as AI tensions escalate

The Trump administration is considering sanctions against Chinese AI firm DeepSeek and investigating Nvidia’s chip sales in Asia, amid fears that China is gaining a critical edge in the global AI arms race.

Sources told The New York Times that Washington may ban DeepSeek from accessing U.S. technology and restrict Americans from using its services. The company’s open-source chatbot, DeepSeek-V3, reportedly matched the performance of U.S. rivals like OpenAI for a fraction of the cost, alarming national security officials.

An April 16 congressional report accused DeepSeek of stealing American AI models, funneling user data to the Chinese Communist Party, and using restricted Nvidia chips to train its system. Lawmakers claim as many as 20,000 chips were acquired despite U.S. export bans.

Committee Chair John Moolenaar said the tools “exploited U.S. AI models” and demanded Nvidia explain how so many advanced chips may have reached China. The panel has requested chip sales data across 11 Asian countries, including Singapore and Malaysia.

Nvidia maintains it has followed U.S. export regulations “to the letter.” DeepSeek has not responded to requests for comment.

Hong Kong approves first Ethereum staking ETF

Hong Kong’s crypto ambitions took a major step forward as its Securities and Futures Commission approved a staking-enabled Ethereum ETF from ChinaAMC and OSL Digital Securities. The fund, expected to launch by May 15, will let investors earn staking rewards while tracking Ethereum’s price.

This follows the SFC’s recent move to permit licensed staking services and reflects a push to transform Hong Kong into a regional crypto hub. An earlier ETF from Bosera and HashKey is set to debut April 25.

Under the new structure, OSL handles custody and security while Kiln operates the Ethereum validator nodes. Rewards will be added to the fund’s net asset value and distributed to shareholders.

ChinaAMC’s digital assets lead Thomas Zhu said the ETF “lowers the threshold” for retail and institutional investors to participate in Ethereum’s staking ecosystem.

a16z pushes SEC for crypto custody reform

Andreessen Horowitz has urged the SEC to modernize its rules for how registered investment advisers (RIAs) can hold crypto assets.

In a letter to the SEC’s Crypto Task Force, the firm argued that RIAs should be allowed to self-custody tokens and manage digital assets without relying solely on third-party custodians – so long as proper safeguards are in place.

The letter outlined five principles, including the need for tailored custody frameworks that consider crypto’s unique features, such as staking rights and governance functions. a16z also criticized rigid classifications like “hot vs. cold” wallets, calling for a broader focus on mitigating risks of theft or misuse.

The appeal comes just as new SEC leadership considers raising the registration threshold for investment advisers – changes that could have major implications for crypto fund managers.

Pump.Fun distances itself from Base token backlash

Pump.Fun co-founder Alon Cohen has spoken out against the recent Base token controversy, saying the Solana memecoin platform won’t follow Coinbase’s Layer 2 experiment with auto-minted tokens.

The “Base is for everyone” token went viral after it was minted automatically from an X post via the Zora platform, briefly hitting a $17 million market cap before crashing over 90%. Base insists the token wasn’t official or sold by the network, but on-chain data revealed that three wallets held nearly half the supply.

Cohen criticized the experiment, saying, “That has resulted in hurt,” and made clear Pump.Fun won’t do stealth launches. While defending innovation at the intersection of social and crypto, he emphasized the need for responsible experimentation.

Base’s Jesse Pollak defended the move as part of building a “global onchain economy” and bringing content onchain.

From Asia’s ETF innovation to rising U.S.-China tech hostilities and DeFi’s internal culture debates, today’s crypto news cycle reveals a rapidly fragmenting ecosystem. As governments move toward strategic accumulation of digital assets and platforms push boundaries in tokenization, the divide between regulatory maturity and experimental chaos grows ever sharper.

The DeepSeek case in particular raises major questions about how technological restrictions may backfire, potentially accelerating China’s push for AI self-sufficiency. Meanwhile, Hong Kong’s bold ETF approval and a16z’s policy push show how different regions are racing to define the crypto rulebook on their own terms.