Asia Express

Korean crypto firm raises $140M, China’s $1.4T AI sector, Huobi battle: Asia Express

Korean crypto firm pulls off the biggest raise in Asia this year, AI market in China is now worth $1.4T, and Huobi trademark court battle.

Our weekly roundup of news from East Asia curates the industrys most important developments.

South Korean nonfungible token developer Line Next secured a $140 million investment on Dec. 13 from a consortium led by Peter-Thiel-backed private equity firm Crescendo Equity Partners. It’s the largest blockchain series funding round in Asia this year.

The firms NFT platform, dubbed “DOSI,” is scheduled to premiere in January, integrated with Japanese NFT marketplace Line NFT. 

“With this investment, Line Next also plans to introduce new services to further accelerate Web3 popularization. These include introducing a social app that allows users to communicate based on the characters they made utilizing AI technology and launching new Web3 games utilizing BROWN & FRIENDS characters that anyone can enjoy.”

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HK game firm to buy $100M crypto for treasury, China/UAE CBDC deal: Asia Express

Hong Kong game firm to add $100M of BTC and ETH to treasury, UAE and China strike CBDC deal, Victory Securities starts new HK Bitcoin fund.

Our weekly roundup of news from East Asia curates the industrys most important developments.

Boyaa Interactive International, a publicly traded Hong Kong holding company specializing in online card and board games, wants to secure the approval of its shareholders to invest $100 million in crypto.

According to this weeks announcement, Boyaa Interactive directors want to allocate $45 million of corporate funds to Bitcoin (BTC), $45 million to Ether (ETH), and $10 million to stablecoins such as Tether (USDT) and USD Coin (USDC). As for rationales for the investment, the directors wrote:

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Another $18.9M Hong Kong exchange scandal, HTX ‘sorry’ airdrop: Asia Express

Hong Kong rocked by another $18.9 exchange fraud scandal, HTX offers airdrop in wake of $30M hack, and digital yuan takes off in HK and China.

Our weekly roundup of news from East Asia curates the industrys most important developments.

Yet another crypto scandal in Hong Kong 

Scammers posing as investment experts allegedly enticed 145 victims to tip $18.9 million into the unlicensed Hong Kong crypto exchange Hounax.

According to reports earlier this week, the police said investors were allegedly promised up to 40% return per annum with “no risk” in its advertisements. After users deposited their funds, they were unable to withdraw them. On Nov. 1, the Securities & Futures Exchange (SFC) of Hong Kong listed Hounax on its billboard of suspicious crypto exchanges but clarified that because Hounax was unlicensed at the time of the incident, it was not subjected to the regulators enforcement actions.

This was the second scandal involving a crypto exchange in Hong Kong in recent months. In September, another unlicensed exchange, JPEX collapsed after allegations of a Ponzi scheme unsurfaced, leading to 66 arrests and an estimated $205 million in investors’ losses.

Despite the scandals, Hong Kong regulators appear to remain steadfast in their commitment to transforming the city into a major Web3 hub. On Nov. 27, SFC CEO Julia Leung explained that “even if the grace period ends tomorrow, fraud will still occur, so there is no intention to modify the grace period and other measures for the time being.”

Under current regulations, a grace period for crypto exchanges to operate without registration will end in June 2024. On Nov. 30, the SFC stated that it seeks to legitimize initial coin offerings in the city to create more revenue for the national budget.

A former ad from the defunct Hounax exchange.
A former ad from the defunct Hounax exchange. (Medium)

In other Hong Kong crypto news, the financial institutions Interactive Brokers and Victory Securities this week announced they had secured crypto licenses, with the former partnering with licensed crypto exchange OSL to immediately provide Bitcoin and Ethereum trading services to its Hong Kong clients.

And on Nov. 29, Darryl Chan, deputy chief executive of the Hong Kong Monetary Authority, announced a multinational effort to create a cross-chain bridge for Chinas digital yuan central bank digital currency. Dubbed “mBridge,” the protocol seeks to reduce transaction fees and improve speeds for cross-border uses of the digital yuan CBDC. The first pilot tests will begin in mainland China and Hong Kong.

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Foreign banks join e-CNY pilot testing

Standard Chartered, HSBC, Hang Seng Bank, and Taiwan-based Fubon Bank have begun testing the digital yuan in cross-border transactions.

According to local news reports on Nov. 28, the four foreign banks will also integrate digital yuan transfer services for their clients and enable them to deposit and withdraw digital yuan. Personal banking accounts will also support the official digital yuan app and self-custody wallet. Yuesheng Song, president and vice-chairman of Hang Seng China, commented:

“The central bank’s launch of the digital RMB, a legal currency in digital form, is an important step for China to explore the development of digital currency and promote the internationalization of the RMB. Hang Seng China follows the national financial development policy advocacy and actively supports the application and development of the central bank’s digital currency.”

In the first three quarters of 2023, the use of the digital yuan in transactions was up 35% year-on-year, reaching $1.39 trillion, China Daily reported. On Nov. 29, the first-ever digital yuan student loans were issued in the province of Suzhou, with $26,230 worth of loans being issued directly into the digital wallets of 13 recipients.

List of banks supported by the e-CNY app, including Standard Chartered, HSBC, Hang Seng Bank, and Fubon Bank. (Baidu)
List of banks supported by the e-CNY app, including Standard Chartered, HSBC, Hang Seng Bank, and Fubon Bank. (Baidu)

HTX back to normal

HTX exchange (formerly Huobi Global) has reopened deposits and withdrawals after a devastating hot wallet hack that drained the exchange of $30 million on Nov. 22.

According to the Nov. 26 announcement, the exchange has since resumed deposits and withdrawals on the Bitcoin, Ethereum and Tron networks.

“Huobi HTX once again promises to fully compensate for the losses caused by this attack and 100% guarantee the safety of user funds. The amount of funds lost by Huobi HTX this time accounts for a very small amount of the total funds of the platform,” the exchange said.

The firm has also announced that a special airdrop will take place in December designed to reward its “loyal users.” Airdrop tokens will reportedly come from “upcoming high-quality projects,” and the amount to be received will be determined by a users’ average net assets on the HTX exchange denominated in Tether (USDT).

Justin Sun, de-facto owner of the HTX exchange (Twitter)
Justin Sun, de-facto owner of the HTX exchange. Incredibly, Warren Buffett did not convert to crypto following the meeting. (X)

Immediately after the incident, Justin Sun, founder of the Tron ecosystem and de-facto owner of the HTX exchange, commented, “we will cover the loss and all assets are SAFE.” Despite assurances, however, this was the fourth exploit involving the HTX ecosystem within the past two months. Around the same time as the HTX exploit, the HTX Ecosystem Chain (HECO) bridge was hacked for $87 million.

On Nov. 10, Poloniex, an exchange acquired by Sun in 2018, was hacked for $100 million due to allegedly compromised private keys. The exchange resumed withdrawals on Nov. 30. On Sept. 25, HTX was drained of $8 million in a security incident. The exchange has since clawed back $8 million in stolen funds and issued a 250 Ether bounty to the hacker.

HTX hacked again for $30M, 100K Koreans test CBDC, Binance 2.0: Asia Express

HTX hacked for $30M — the ecosystem’s fourth hack in recent months — 100K Koreans test out CBDC, and Binance is dead, long live Binance!

Our weekly roundup of news from East Asia curates the industrys most important developments.

HTX exchange hacked… again 

In the fourth hack affecting the HTX (formerly Huobi Global) ecosystem in just two months, the exchange lost $30 million via a hot wallet hack that occurred on Nov. 22. 

In its Nov. 23 announcement, the exchange promised to fully compensate for the losses caused by this attack and 100% guarantee the safety of user funds,” as well as restore services within 24 hours of the attack. The day prior, the HTX Eco Chain (HECO) bridge was exploited for $86.6 million. An investigation is ongoing. 

In September, the HTX exchange was hacked for $7.9 million; this was followed by a $100 million hack against the Poloniex exchange, a related entity, in November. Justin Sun, the Chinese blockchain personality and de-facto owner of HTX (not to mention an “advisor” to, but probably owner of, Poloniex, founder of Tron and CEO of BitTorrent), stated after the attack that “HTX Will Fully Compensate for HTXs hot wallet Losses. Deposits and Withdrawals Temporarily Suspended. All Funds in HTX Are Secure.” Sun previously also madeassurancesthat “all user assets are #SAFU” in the aftermath of the September hack against HTX.

Huobi rebranded to HTX during this years Token 2049 event in September. Although its executives have repeatedly reassured that the exchange is doing well, the exchange ran into a number of serious incidents this year, including an alleged employee revolt.

Justin Sun during Web3 Hong Kong. (Twitter)
Justin Sun blushes as he shares a stage with Nina on April 11.

Binance pleads guilty, settles criminal charges for $4.3 billion

Crypto exchange Binance has agreed to plead guilty to violating the U.S. Bank Secrecy Act, knowingly failing to register as a money-transmitting business, and willfully violating the International Emergency Economic Powers Act. The exchange will pay $4.3 billion in penalties and forfeiture to the U.S. Justice Department. 

According to the Nov. 21 announcement, Changpeng Zhao, co-founder and CEO of Binance, has also pled guilty to one count of willfully violating the U.S. Bank Secrecy Act. Zhao has since entered his personal plea in the District Court for the Western District of Washington.

At the time, Zhao was granted a $175 million bond that allowed him to reside in Dubai pending his sentencing hearing on Feb. 24. However, the U.S. Department of Justice has since appealed that decision, asking to confine his residence to the U.S. pending the sentencing hearing due to Zhao allegedly possessing an “unacceptable risk of flight.”

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In its indictment, the Department of Justice noted that, in a few noticeable incidents and despite reassurances, Binance facilitated over $1 billion in illicit transactions for Iranian users, the Russian marketplace Hyrdra and cryptocurrency mixer Bestmixer. and it solicited U.S. users without prior registration. Binance was also accused of deliberately masking such actions as “complying with U.S. law would stifle their efforts to grow Binance’s profits, market share, and trading volume.”

The same day, Zhao stepped down as the CEO of Binance. “I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself,” he stated. 

“Binance is no longer a baby. It is time for me to let it walk and run. I know Binance will continue to grow and excel with the deep bench it has.”

While Zhao still owns a majority in the exchange, he will be barred from being involved in the exchange’s everyday operations. Richard Teng, Binance’s global head of regional markets, was named the exchange’s new CEO. In his inaugural statement, Teng stated that the exchange’s fundamentals were “VERY strong” and that Binance is still “the world’s largest crypto exchange by volume.”

Blockchain analytics firm Nansen has noted that despite the guilty plea, it did not witness any “mass exodus of funds” after the incident. While the exchange witnessed nearly $965 million worth of withdrawals, its total holdings increased to $65 billion. On November 23, CZ’s X account was temporarily suspended after removing “Binance” from his profile name. 

U.S. Attorney General Merrick Garland during the indictment announcement. (DoJ)
U.S. Attorney General Merrick Garland during the indictment announcement. (DoJ)

South Korea invites 100,000 people to test CBDC

The Bank of Korea, South Korea’s central bank, will invite 100,000 Korean citizens to purchase goods with deposit tokens issued by commercial banks as part of its central bank digital currency (CBDC) pilot test. The first of such trials began in October. 

According to local news reports on Nov. 23, “participants will be restricted to using the currency solely for its designated purpose of payment. Other uses, including personal remittance, will not be permitted at this time.” Although the Bank of Korea has not yet decided whether or not to implement a CBDC, further trials are expected, including an integration simulation system for carbon emissions trading on the Korea Exchange. It said: 

“Recently, the rapid digitalization of the economy has led to a growing demand for a digital form of public currency. This demand is evident in the private sector, where new payment instruments such as stablecoins have been developed and are already widely used in certain sectors.”

Evening in downtown Seoul.
Evening in downtown Seoul. (Source: Pexels)

No civil protection for crypto in China, $300K to list coins in Hong Kong? Asia Express

Chinese court knocks back civil lawsuit over “illegal” crypto, Hong Kong exchanges gain momentum, The Block gets $60M from Singapore firm.

Our weekly roundup of news from East Asia curates the industrys most important developments.

Hot week for Hong Kong exchanges 

Hashkey Exchange one of the first regulated crypto exchanges in Hong Kong has announced insurance coverage for clients assets stored in its hot and cold wallets. accounts. The policy will cover 50% of Hashkeys digital assets in cold wallets and 100% of digital assets in hot wallets, paying out from $50 million to $400 million in the event of a claim.

Hashkey’s partnership with fintech OneDegree will also see the pair co-develop novel crypto security solutions for the exchange to manage server downtime, data back-up, and load control. “Getting insurance cover from OneInfinity by OneDegree not only fulfills the Securities and Futures Commission requirements, we believe the collaboration can also enhance our financial, technical, and service infrastructure to provide our customers with comprehensive protection,” said Livio Wang, chief operating officer of Hashkey Group.

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Wang also disclosed that the exchange plans to submit four major altcoins for listing approval to the Hong Kong Securities & Futures Commission. Since its license was approved in August, Hashkey has grown to over 120,000 customers with a cumulative trading volume surpassing $10 billion. 

Hong Kong
Hong Kong cityscape (Pexels)

BC Technology Group, the owner of another licensed exchange, OSL, has announced a $91 million strategic investment from BGX crypto group. BGX CEO Patrick Pan called the investment “a strategic move that reflects our belief in the immense potential of the digital asset market.” Last month, Bloomberg reported that BC Technology Group was seeking to spin off the OSL exchange for $128 million, which the company denied at the time.

While Hong Kong crypto exchanges are gaining traction, the barrier to entry for users and token developers alike appears to be high. In an announcement on Nov. 15, Hashkey stated that token developers must pay a non-refundable application fee of $10,000 for listing their coins or tokens on the exchange.

Hashkey also warned that developers should expect a total cost of $50,000 to $300,000 for the listing process, if approved, in addition to due diligence or advisory fees.

Hashkey's crypto insurance partnership with OneDegree. (Hashkey)
Hashkey’s crypto insurance partnership with OneDegree. (Hashkey)

The Block gets a fresh start

Crypto media publication The Block has received a $60 million investment for 80% of its equity from Singaporean venture capital firm Foresight Ventures but will still operate as a separate company.

As told by CEO Larry Cermak on Nov. 13, the deal “gives The Block a fresh start ahead of the bull market and provides us with more capital to build out new exciting products and expand our footprint into Asia and the Middle East.”

Forrest Bai, CEO of Foresight Ventures, told Cointelegraph that “the purchase of The Block marks a crucial milestone, substantially strengthening Foresight Ventures’ position in the cryptocurrency sector.”

The Block became embroiled in the FTX scandal last year when it came to light that former CEO Mike McCaffrey took millions of dollars in loans from FTX founder and convicted felon Sam Bankman-Fried. Much of the capital was used to buy out his shares. The Block reportedly laid off 33% of its staff due to the overall market downturn and fallout from the incident.

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No civil protection for crypto in China 

A third Chinese court has voided a crypto investment contract on the basis that cryptocurrencies contravene the spirit of its crypto ban and, therefore, are not protected by law, at least in civil disputes.

As narrated by the Liaoning Zhuanhe People’s Court on Nov. 14, the plaintiff, Wang Ping, lent the equivalent of $552,300 Tether (USDT) to a friend, Zhao Bin, for the purposes of investing in altcoins in 2022. The transaction resulted in heavy losses for Wang, leading them to subsequently file a lawsuit demanding the return of the principal. The defendant, Zhao, refused.

At trial, the presiding judge ruled that the plaintiff had no right to judicial relief as transactions between cryptocurrencies are classified as “illegal activity.” Therefore, all “virtual currency and related derivatives violate public order and good customs, and the relevant civil legal actions are invalid, and the resulting losses shall be borne by them.”

“Virtual currency does not have the same legal status as legal currency. Virtual currency-related business activities are illegal financial activities. It is also an illegal financial activity for overseas virtual currency exchanges to provide services to residents in my country through the internet.”

The ruling follows other precedents set by Chinese civil courts earlier this year. However, recently, the Chinese government has clarified that certain criminal acts pertaining to digital currencies, such as theft of nonfungible tokens, are prosecutable under the penal code. Chinese has enforced its crypto ban since 2021.

Philippines to issue tokenized bonds 

The Philippines Bureau of Treasury (BTr) is seeking to raise the equivalent of $180 million from its domestic capital market through the issuance of tokenized bonds.

As announced on Nov. 16, the tokenized bonds are one-year fixed-rate government securities that pay semi-annual coupons offered to institutional investors starting next week. The bonds will be issued in the form of digital tokens and maintained in the BTr’s distributed ledger technology (DLT) registry. “As part of the National Governments Government Securities Digitalization Roadmap, the maiden issuance of TTBs aims to provide the proof-of-concept for the wider use of DLT in the government bond market,” the institution said.

In July, Cointelegraph reported that nonprofit The Blockchain Council of the Philippines partnered with the Department of Information and Communications Technology (DICT) to foster Web3 adoption in the Southeast Asian country. The organizations will be working to educate and collaborate with local stakeholders within the Philippine blockchain ecosystem, including government bodies, Web3 developers, and civil societies. 

Crypto in the Philippines
The Philippines looks like leaping directly from cash to a digital currency future.

China’s surprise NFT move, Hong Kong’s $15M Bitcoin fund: Asia Express

China issues legal guidance that gives NFT markets hope, Bitget invests $10M in Indian startups, SEBA Bank’s Hong Kong license: Asia Express.

China to protect NFTs 

In a surprise move, the Chinese government has guaranteed legal protection for NFTs.

In response to a series of often conflicting judicial opinions on the state of cryptocurrency in the country, the Chinese government has officially issued a legal commentary on dealing with cases of nonfungible tokens (NFTs) theft and their status as virtual property protected by law. 

According to a Nov. 9 publication by Chinas state-controlled Southwest University of Political Science and Law (SUPL), digital collectibles such as NFTs unlike ordinary online images conform to the characteristics of online virtual property due to their non-tamperable features, unique codes and detailed transaction information.

“This highlights the scarcity of digital collections, which have both use value and exchange value,” jurists write. “According to Article 127 of the Civil Code, it can be seen that from the perspective of civil law, online virtual property is regarded as an object of rights that ‘is different from property rights, creditors rights, intellectual property rights, etc. and is protected by civil law’.”

In addition, jurists state that the theft of NFTs, therefore, carries applicable criminal penalties, which can be evaluated in conjunction with related offenses committed during the course of the theft, such as hacking into computer systems or data theft.

“Digital collections have technical characteristics that cannot be copied, indicating that the holder has exclusive control. If the digital collection is stolen by others, the holder loses exclusive control,” jurists from SUPL say. 

“Although our country has not yet opened the secondary circulation market for NFTs, consumers can rely on the trading platform to complete operations such as purchase, collection, transfer, and destruction, and achieve exclusive possession, use, and disposal rights.”

China has seen a rise in civil disputes this year involving cryptocurrencies, with some courts ruling that virtual assets are protected by law and others saying they are not. Last month, Chinese government-owned newspaper China Daily announced a 2.813 million Chinese yuan ($390,000) grant for third-party contractors to design an NFT platform. In May, Chinese prosecutors announced they would crack down on “pseudo-innovations” within its NFT market. 

Chinese judge explains why the Bitcoin lending contract was invalid and therefore denied relief for breach of contract.
A Chinese judge explains that according to current laws, parties in a crypto lending contract are not entitled to judicial protection.

Bitget’s to invest in India 

Cryptocurrency exchange Bitget will invest $10 million over five years in startups primarily based in India. 

According to the Nov. 7 announcement, startups will have the opportunity to pitch to Bitget and venture capitalists including Sequoia Capital, Lightspeed Ventures, and Draper Labs, during the BUIDL for Web3 multichain summit in India.

“Bitget aims to identify valuable and promising projects in the crypto space and provide them with comprehensive support, accelerating innovation in emerging technologies,” the exchange says. To qualify, projects must have a minimum viable product and hold multiple layers of security functionalities with auditing transparency.

Gracy Chen, Bitgets managing director, says that India is “the most wanted place to invest in Asia,” citing its constant advancements in blockchain and overall entrepreneurial spirit. The exchanges previous investments in Indian Web3 startups include AI-based script generator Grease Pencil, AI resume generator HAIr, and AI dermatological app Derma360. 

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Linekongs $15M Bitcoin Fund 

Linekong Interactive, a Chinese tech firm listed on The Stock Exchange of Hong Kong (HKEX), will kickstart a $15 million fund dedicated to revitalizing the Bitcoin (BTC) ecosystem. 

According to founder Wang Feng, the new fund is dubbed “BTC Next” and will accelerate novel projects developing asset issuance, exchanges, virtual machines, NFTs and GameFi protocols on the Bitcoin blockchain.

“BTC NEXT will participate in the research and investment of Bitcoin network ecological assets as early as possible, publish crypto investment portfolios regularly, and update the list of Bitcoin ecological crypto assets participating in investment,” Wang writes. 

The Bitcoin ecosystem has expanded greatly this year with the invention of Ordinals and Inscriptions, two novel data storage methods that, together, allow users to mint unique digital assets on the Bitcoin blockchain. The market cap of Bitcoin tokens minted on the BRC-20 standard, mirrored after the Ethereum ERC-20 standard, has surpassed $1.4 billion since inception.

Linekong was founded in Beijing in 2007 with a focus on video games and cinema. In 2018, Wang Feng resigned as CEO of Linekong to focus on blockchain, founding several projects in the nonfungible tokens, decentralized finance, and Bitcoin mining space. He returned to Linekong as CEO in 2022 after an invitation from the firms board of directors to better integrate Linekong products with Web3.

The Ordinals Timeline
The Ordinals timeline. (Originals Bot)

SEBA Bank approved in Hong Kong 

Swiss fintech SEBA Bank has received a license from Hong Kong’s Securities and Futures Commission (SFC). 

The license permits SEBA Bank to conduct regulated activities in Hong Kong and distribute virtual asset-backed securities, advise on crypto assets, and manage crypto investment accounts on behalf of clients. It also permits SEBA Bank to distribute, manage, and advise on traditional securities, such as stocks. 

“Hong Kong has been at the center of the crypto economy since Bitcoins inception, and we are very pleased to have added this Hong Kong license with the full approval from the SFC to our existing licenses in Switzerland (FINMA) and Abu Dhabi (FSRA),” comments SEBA Bank CEO Franz Bergmueller. Meanwhile, Amy Yu, the firm’s Asia-Pacific CEO, praised the SFC for creating a “facilitative” environment during the licensing process. 

Cointelegraph previously reported that SEBA Bank launched institutional Ethereum staking services in September. In early 2022, the firm raised $119 million in a Series C funding round. 

The Hong Kong Web 3.0 Festival gallery hall (Twitter)
The Hong Kong Web3 Festival gallery hall (Twitter)

$308M crypto laundering scheme busted, Hashkey token, Hong Kong CBDC: Asia Express

Asia Express: Ringleaders of $308M P2P crypto laundering scheme jailed in China, Visa’s Hong Kong CBDC trial a success, Hashkey token.

Visa completes Hong Kong digital currency trial with HSBC and Hang Seng

Hong Kong is one step closer to a central bank digital currency (CBDC) with the release of its successful phase 1 results in collaboration with Visa, HSBC and Hang Seng Bank.

According to a Nov. 1 announcement, Visa said that it achieved “near real-time” finality with transfers involving tokenized deposits of the digital Hong Kong dollar (e-HKD).

Tokenized deposits were burned on the sending banks ledger, minted on the receiving banks ledger, and simultaneously settled interbank via the simulated wholesale CBDC layer,” the payments firm wrote.

“This would provide for settlement in an atomic manner with better streamlining of any operational dependencies imposed by financial institutions and other intermediaries, thus improving liquidity management.” 

The payment processor also stated that its digital HK dollar test pilot was functional 24/7, surpassing the uptime of traditional financial systems, which typically don’t function after hours or on weekends. In addition, the firm wrote that “tokenized deposits can be fully transacted while remaining encrypted, without revealing information about identity, balances, or transaction amounts to non-bank users.”

For its next steps, Visa plans to explore the use of e-HKD in tokenized asset markets and programmable finance to automate real estate transactions. “In this pilots Property Payments use case, the payment from a buyer transferring the remaining balance tokens to the property developer may be automated upon reaching the completion date of the contract, minimizing lag time in closure of the process,” the company said. Other areas of research interest include the expansion of retail solutions and digital cross-border payments.

Despite the promising results, no definite timelines have been given for the full launch of the Hong Kong digital dollar or even that such a launch will occur. In its Oct. 30 report, the Hong Kong Monetary Authority warned there are still issues to resolve:

“For instance, an rCBDC issued as a programmable money may be more susceptible to cybersecurity risks, as it may present more mediums for external threats to inject malicious code.”

With the silent nod from Beijing’s central government, Hong Kong has been striving to become a Web3 hub for blockchain in the Asia-Pacific Region. However, such efforts had been overshadowed by the collapse of the JPEX crypto exchange, resulting in losses exceeding $150 million for Hong Kong investors. Since the incident unfolded, trust in cryptocurrency among local residents has fallen drastically.

The new e-HKD pilot results as announced by Visa.
The new e-HKD pilot results as announced by Visa.

Hashkey’s regulated exchange token 

Hashkey, one of the first crypto exchanges to receive a regulatory license in Hong Kong, will introduce an exchange token in 2024. 

According to the recent white paper, the “HashKey EcoPoints” (HSK) token will be minted on Ethereum with a total supply of 1 billion. Out of this amount, 65% is reserved for users, 30% for Hashkey staff, and 5% for its ecosystem treasury.

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The token will be distributed as incentivizes to ecosystem users and distributors and will not be “sold via private or public sales for fundraising purposes.” As for utility, the company states that the token could be used to settle trading fees, along with early access to future token subscriptions and product upgrades on its exchange services.

The exchange also pledges to buy back HSK tokens with up to 20% of profits generated from related Hashkey services. “HashKey implements an offsetting issuance mechanism (burning) to protect HSK holders from the dilutionary impact of rewards-based increases in HSK circulating supply,” the firm wrote. However, regulatory approval is still required for the token design plan:

“The contents of this whitepaper have not been reviewed by any regulatory authority in Singapore or Hong Kong. You are advised to exercise caution in relation to the information in this whitepaper and any transaction that you intend to carry out involving HSK.” 

In August, Hashkey, alongside crypto exchange OSL, received one of the first regulatory licenses for retail crypto trading in Hong Kong. Its trading volume initially stagnated but has since gained traction. Only select coins and tokens such as Bitcoin, Ethereum, Tether and Avalanche are approved to be listed on the exchange.

Hashkey's plan for token utility.
Hashkey’s plan for HSK token utility.

$308M syndicate manipulated crypto markets to launder money: Police 

Nineteen Chinese nationals have been sentenced for their role in a $308 million money-laundering scheme involving cryptocurrencies that operated from November 2020 and April 2021.

According to an Oct. 31 report by the Chongqing Tongliang District People’s Court, Mr. Jiang and Mr. Deng, the principal conductors of the money laundering syndicate, together laundered a total of $308 million worth of Bitcoin and Tether for proceeds of crime related to online gambling and wire fraud.

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Police say that to avoid platform monitoring and Know Your Customer requirements, the accused individuals orchestrated a sophisticated scheme of using peer-to-peer transactions, where coins were sold at “unusual prices relative to spot markets” for the stablecoin Tether and then transferred to exchanges for cash.

“By fabricating pretexts such as withdrawing project funds and migrant workers’ wages, they organized gang members to withdraw cash from bank counters in Chongqing, Sichuan, Shanghai and other provinces and cities. The amount of cash withdrawals ranged from hundreds of thousands to several million yuan each time. After withdrawing the cash, the cash is packaged in trolley cases, backpacks, etc., and transported by plane.”

The 19 individuals, including Mr. Jiang and Mr. Deng, were sentenced to six months to six years in prison. “In recent years, the phenomenon of criminals committing illegal and criminal activities through telecommunications networks has become increasingly rampant, posing a huge threat to the legitimate rights and interests of the general public,” the presiding judge wrote. 

Due to such a rise in wire fraud involving cryptocurrencies, China’s Central Government has cracked down harshly on crypto-related activities in the country, although there have been some signs of relaxation as of late. Nevertheless, such enforcement actions have sometimes resulted in collateral damage for foreign investors using Chinese-based crypto services without criminal intent. 

The culprits as they appeared for sentencing in Chongqing Tongliang District People's Court.
The culprits as they appeared for sentencing in Chongqing Tongliang District People’s Court.

Slumdog billionaire 2: ‘Top 10… brings no satisfaction’ says Polygon’s Sandeep Nailwal

Polygon co-founder Sandeep Nailwal won’t be happy until the project is successful enough to stand alongside Bitcoin and Ethereum.

Read Part 1 here: Slumdog billionaire: Incredible rags-to-riches tale of Polygons Sandeep Nailwal

Growing up in poverty in a Delhi ghetto with an alcoholic father and an illiterate mother, Sandeep Nailwal has always had a fire in his belly to achieve something better.

He wants to go big or go home middling success is not an option.

I am not doing something small, he tells Magazine. Okay, we build some network, and it has a token. It does well for one cycle and then fades into the dawn, and I make a few million dollars for myself and retire or whatever this was not the plan.

We were very clear that we will build this, we will grow the community, and well make it one of the biggest projects in the space.

And thats why, in his mind, Polygon formerly Matic Network is yet to truly succeed, despite nudging a $19-billion market cap at one point and joining the top 10 cryptocurrencies by market capitalization (its currently No. 13 with a $6-billion market cap).


Being in the top 10, top 15 projects brings no satisfaction to me. Its very clear in my mind that I want Polygon to have that kind of impact which Ethereum and Bitcoin have had. We have to go to the top three projects in the space. And thats only when I would say that OK Polygon has made it.

Part 1 of this feature told the story of Nailwals rise from grinding poverty to going all-in on Bitcoin with $15,000 hed borrowed to fund his wedding and the difficult early days of Matic Network, where the threat of running out of funds was ever-present.

By mid-2019, Matic Network had raised $5 million in a Binance initial exchange offering to keep itself afloat and had launched the alpha version of its Ethereum layer-2 sidechain. But it was slowly becoming clear that the Plasma technology it was pursuing was not the answer the market was looking for.

Ideas around scaling had begun to change, and Plasmas shortcomings (TLDR: complicated, better at transferring assets than running smart contracts) had seen it lose favor. Seeing which way the wind was blowing, the research-oriented Plasma Group decided to ditch the framework altogether in favor of building an Optimstic rollup and renamed the project Optimism in early 2020.

But the Matic Network white paper had outlined a Plasma-based solution with fraud proofs and a proof-of-stake checkpoint layer, and the team was determined to follow through and build it in 2019 and 2020, despite waning interest in the tech.

Mainnet market crash and resurrection

Just as the project was gearing up to launch its mainnet in May 2020, a worldwide pandemic and the March Black Thursday market crash intervened. Around 70% was wiped off the already paltry sub-3-cent price of MATIC within the space of 10 days. With fears of a new Great Depression gripping the world, Matic Networks future again looked in doubt.

Suddenly, everything felt like it will go to zero. That shock was there for two to three months. We survived that, but what we realized is that, you know, we started with Plasma technology, and now plasma is dead. And now we are launching our mainnet. People are, like, Plasma is dead; there is no interest from the community.

Nailwal says the team came to two conclusions.

The first is theyd try and get as many developers and builders as possible. This was a success, as they launched their Ethereum layer 2 just in time for DeFi Summers ludicrous gas fees on layer 1.

Sandeep at Token2049 polygon club twitter
Sandeep Nailwal at Token2049. (X)

The second conclusion was to never again put their eggs in one basket.

We realized that we need to be multichain; we cant be relying on one particular technology, he says.

Long-term Ethereum community insider Mihailo Bjelic was also thinking about a multichain future and joined the project to become something of a bridge to markets and communities from which the team felt excluded at the time. Nailwal says the projects roots in India meant it had a low profile in the Western world, where some considered it to be just like another internet scam. 

Also read: Beyond crypto Zero-knowledge proofs show potential from voting to finance

In early 2021, Matic Network rebranded as Polygon to highlight the change in direction. At the time, Nailwal told Cointelegraph the idea was to become Polkadot on Ethereum and to add Optimistic rollups, zero-knowledge (ZK) rollups and StarkWare-style Validiums alongside the PoS network.

But Nailwal says they quickly realized that Optimistic rollups were at best an intermediate solution that wouldnt be able to scale up to have 50 chains working in the ecosystem.

With ZK, you can imagine a world with […] 100,000 chains; each of them has 1,000 transactions per second (TPS); all of them combined together could be tens of millions of TPS in the whole network. And the architecture will still survive and keep scaling.

Infinite scalability, unified liquidity and that is the main point for why we bet on ZK because ZK is the endgame for blockchain scaling.

Polygon bull-run fever

At the dawn of 2021, MATICs market cap was just $87 million. By mid-year, it had surged to almost $14 billion, and it was nearly $19 billion by years end. Thats in no small part due to its surging user numbers and ability to scale Ethereum.

At the end of 2020, it had fewer than 1,000 daily active users, but by October that year, it had surpassed Ethereum for the first time with 566,000 users in a day and had flipped ETHs daily transactions, too, thanks to high gas fees on the L1.

Suddenly, the founders were very wealthy individuals, and the project itself had the funds to embark on a major acquisition spree.

In August, it snapped up the entire Hermez network for 250 million MATIC. The project became Polygon Hermez, an Ethereum Virtual Machine-compatible ZK solution focused on decentralization and a proof-of-efficiency consensus.

In December, it spent another $400 million in MATIC to buy the Mir team of ZK-proof experts to build Polygon Zero (ZK recursive scaling). And the acquisitions kept coming.

Harvard Business School Sandeep case Studies 2032 - Five technologies that will shape the world from Miss Polygon Twitter Account
Nailwal goes to Harvard Business School, as part of a case study about technologies that will shape the world. (Miss Polygon Twitter)

We reached out to all of them. We said, You want to work with us? And I think at that point in time, whatever was like number three, number four, number five, like we acquired all of them, because number one, number two did not come with us. (But) the talent in number three, four, five teams is super, super good.

The venture capital seemed to think the new plan was a winner, with Polygon raising another $450 million in early 2022, selling MATIC tokens in a raise led by Sequoia Capital India and including Tiger Global and Softbank Vision Fund.

The advantages of having multiple teams taking different approaches became pretty clear.

We initially kept them completely autonomous so they could pursue their own research, and they collaborated with each other. Due to that collaboration, suddenly, we got a ZK EVM, which people have thought is four or five years away.

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He says the ZK EVM took just 12 months to develop because of the cross-pollination of ideas between these teams.

Other ZK flavors developing under the Polygon umbrella include Miden (a StarkWare-like system with its own virtual machine) and Nightfall (Optimistic rollups meet zero-knowledge cryptography).

Bets each way on ZK, JavaScript is for midwits

The other big advantage of having multiple teams building different solutions is it doesnt force Polygon to make the same hard choices other projects have had to make.

For example, StarkWare is betting that the additional performance provided by its Cairo virtual machine will make up for the fact that its much harder to port existing Ethereum projects over to StarkEx.

Sandeep as a Blockchain Buddies NFT
Sandeep as a Blockchain Buddies NFT.

Most of the other projects zkSync, Linea, Scroll, etc. are making the opposite bet that less performance but easier compatibility with the Ethereum Virtual Machine will attract projects and see their solutions win market share.

Polygon is the only team with bets each way, with Polygon Miden following StarkWare with a ZK-optimised virtual machine. For his part, Nailwal thinks EVM will win in the short term, but other solutions will come into their own in the years ahead.

I almost feel like EVM is like JavaScript right? he says. I remember when I was in first or second year of my engineering college JavaScript was considered to be a programming language of the midwits! But today, JS is everywhere; maybe 80% of the web is powered by JavaScript. So, EVM kind of has those effects no matter how much you say, These are the problems.

Nailwal adds, however, Our plan is a 10-year-long plan. So, we have the ZK EVMs, we have Polygon Zero, but we also have Polygon Miden, which we believe is highly performant, has privacy features inbuilt […] and it will support all the programming languages.

Miden founder Bobbin Threadbare told Magazine earlier this year that the Miden VM will enable users to do things like run high-quality video games and generate ZK-proofs on their home PCs they can send into the network.

What they are doing, it gives me goosebumps, Nailwal says. But Miden will start blossoming in around one year. By that time, we, as the Polygon community, need to win the ZK EVM. He hints that a new token and airdrop are being considered to help with this.

Ethereum upgrades to turbocharge Polygon L2s

Ethereums next big upgrade, EIP-4844, which is supposed to happen sometime before the end of the year, introduces proto-danksharding to make life easier for rollups, which Nailwal says is welcome but not a game changer.

I think some estimates were saying up to 200300 TPS only for the rollups. So, not a huge advantage, but its going to reduce the (gas) cost of the transactions.

Full danksharding, which is several years away, according to the Ethereum Foundation, however, will multiply that improvement by the number of shards, currently expected at around 64.

So, you can imagine that 64 multiplied by 200. So, there will be, like, you know, 12,000 TPS, all the rollups can support.

In June this year, the project unveiled its Polygon 2.0 roadmap to become the Value layer of the internet. The vision is for a network of ZK-powered L2s that will seem like using a single chain to users thanks to a cross-chain coordination protocol. Builders can knock up their own ZK-powered L2 chain in a flash using Polygons Chain Development Kit.

The existing PoS blockchain will become a Validium, which is one approach to dealing with the data availability problem of how to affordably store stuff on Ethereum.

The roadmap will also see MATIC tokens upgraded to a new token called POL (short for Polygon) and introduce the controversial concept of restaking, which enables token stakers to earn additional rewards by helping secure other networks.

The POL token is basically the hyper-productive, third-generation token. You can validate on multiple chains, and you can validate for multiple roles: You can be an aggregator, you can be a sequencer, you can be a data availability provider, and you can be a prover. So, with the same token, you can actually stake on multiple layers.

Sandeep AMA reddit
Sandeep Nailwals AMA on Reddit.

Restaking is controversial in the Ethereum community, with critics arguing it could turn into an unstable house of cards. But Nailwal says POL will be natively integrated into the ecosystem rather than added by third parties on top, as with Ethereums EigenLayer, which will mitigate the risks.

With Polygon, risk-taking is more enshrined in the protocol; this is part of the protocol; this is how the protocol behaves, he says.

If youre a validator and you are running 100 chains, and of those 100 chains you falter or you do fraud on one chain, you get slashed from all of them, he continues, adding hes not sure EigenLayer could implement that especially when they are building on top of something.

I think there are a lot of nuances where ours is much simpler and easier to do.

Polygon 2.0 is like the internet of money

For Nailwal, the ultimate aim of Polygon 2.0 is to evolve crypto networks in the same way the internet evolved. The forerunner of the internet was ARPANET in the 1970s, then the invention of TCP/IP in 1983 allowed multiple networks to connect, forming an inter-network, which grew into the internet thanks to additional technologies like the Domain Name System and the World Wide Web.

Its interconnectivity of all the networks, he says. This is exactly what you see is happening on blockchains.

Its very hard to move your money trustlessly from one chain to another; you use these bridges, which get hacked all the time. Thats why Polygon 2.0 is not only about having infinite scalability […] But it should also make sure that that value that is being created on these hundreds of thousands of chains also is connected and seamlessly movable.

He says the interoperable layer will enable value to flow between L2 chains, as well as Ethereum and potentially other layer-1 chains as well in the future if they join in.

So, with this Polygon 2.0, we can achieve the same characteristics as the web has, he says. The Web3 network, whichever will win, should have infinite scalability and seamless transfer of value between these chains.

Thats why Polygon 2.0 architecture has got a lot of critical acclaim.

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Future for Polygon and Sandeep Nailwal

Even as the founder of a multibillion-dollar blockchain and living in luxury in Dubai, Nailwal still feels unsatisfied, as if he has yet to make the impact he feels he should. He looks up to world changers like Mark Zuckerberg, Satoshi and Vitalik Buterin a truly remarkable man. So, mere wealth is not enough. He wants to make a lasting impact.

Ive never felt that Polygon has made it, he says. That part is very relentless in my mind, like there is no middle ground like this.

I think Bitcoin, Ethereum only can say that they have made it nobody else, no other protocol can say that theyve made it; they can die in a matter of six to 12 months.

So, Nailwal wont be happy until the Polygon ecosystem truly deserves to stand along Bitcoin and Ethereum as the bedrock of the entire industry

We have to go to the top three projects in the space, he says.

Read Part 1 here: Slumdog billionaire: Incredible rags-to-riches tale of Polygons Sandeep Nailwal

Australia’s $145M exchange scandal, Bitget claims 4th, China lifts NFT ban: Asia Express

Asia Express: Cops bust Australian crypto and fiat money laundering exchange, Bitget now 4th largest exchange, China partially lifts NFT ban.

Our weekly roundup of news from East Asia curates the industrys most important developments.

Largest money laundering scandal in Australia unravels

Changjiang Currency Exchange, a money transmitter business based in Australia, has beenbustedin a 230 million Aussie dollar ($145 million) money laundering scandal.

On Oct. 26, a 300-strong police operation spanning Melbourne, Sydney, Brisbane, Adelaide and Perth arrested seven individuals four Chinese citizens and three Australian nationals after a 14-month investigation.

Operating under the front of a legitimate currency exchange business, police say that Changjiang Currency Exchange helped launder dirty funds and tainted cryptocurrency from investment scams and unregistered crypto exchanges.

In one single incident, a 37-year-old Chinese national was accused of using Changjiang’s services to launder AU$100 million ($63 million) worth of funds received from a multinational Ponzi scheme.

Australian Federal Police investigating the Changjiang Currency Exchange
Australian Federal Police investigating the Changjiang Currency Exchange (AFP)

The investigation began after law enforcement officials noticed irregular traffic at Changjiang kiosks across Australia during a time of strict COVID-19-related lockdowns. Police have since seized AU$21 million ($13.27 million) in cash and various luxury items believed to have been purchased using proceeds of crime. The investigation remains ongoing.

Bitget’s colorful Q3

Crypto derivatives exchange Bitget hasrisento become the fourth-largest by volume, trailing behind only Binance, OKX and Bybit.

In an Oct. 20 Bitget transparency report, Bitget claimed that its market share had risen to 9.43%, compared to negligible volume just two years ago. During Q3 2023, the exchange says it onboarded over 9,000 traders along with 85,000 followers or copy-traders, who together achieved a net trading profit of $6.7 million. However, the combined industry trading activity fell by 23% year-over-year to $4.8 trillion in the quarter.

From July to September, Bitget’s user protection fund peaked at $368 million and now stands at $350 million. The exchange claims that it has no debt alongside a proof-of-reserves ratio exceeding 200%. In September, the firm launched a $100 million EmpowerX Fund dedicated to ecosystem development and hosted a namesake summit in Singapore. It also hired 60 staff in July for its Middle East expansion plans. 

Bitget's growing derivatives trading volume year to date.
Bitget’s growing derivatives trading volume year to date. (Bitget)
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China partially lifts bans on NFTs

After a year of harsh crackdowns on private blockchain enterprises, it appears that China has softened its stance somewhat. 

According to local news reports on Oct. 25, Xianyu (literally “Bored Fish”), Chinese internet conglomerate Alibaba’s flagship peer-to-peer marketplace, has removed its censorship of “nonfungible tokens” related keywords in its search tool and relisted Topnod NFT collectibles minted on Alibaba’s Ant Blockchain.

Due to regulatory uncertainty, Topnod digital collectibles were prohibited from listing on secondary markets. Last December, Cointelegraph reported the Chinese government’s official NFT trading platform was planned to launch this year. The exchange is still in development at the time of publication. Since 2021, China has officially banned almost all crypto-related activity saved for outright ownership of cryptocurrencies. 

Blockchain connects interprovincial health insurance in China

Residents of Shanghai, Zhejiang, Jiangsu and Anhui provinces can nowsubmitand validate their health insurance claims using blockchain technology.

In a partnership with Alibaba’s Ant Insurance, users in the aforementioned regions can submit their claims online and after blockchain verification for authenticity, receive their reimbursement within hours.

In one instance, an individual known as Mr. Wang submitted his claim for lung cancer treatment in Anhui and received the full 130,000 Chinese yuan ($17,800) reimbursement within two hours. Su Fang, director of the Financial Insurance Institute of Shanghai University of Finance and Economics, commented:

“This time, all electronic financial and medical bills in the Yangtze River Delta have been opened and applied on a large scale in commercial insurance claims, marking the true application of the digital Yangtze River Delta construction. This not only brings real convenience to the people but also improves the efficiency of insurance claims and effectively prevents moral hazard.”

Ant Insurance has operated a blockchain-powered claims portal since 2019. For the past four years, the platform has processed over 2.25 billion medical claims and improved information sharing between insurance providers and medical professionals.

Ant Insurance allows claimants to verify their application via blockchain (WeChat)
China softens ban on NFT platforms to allow related searches. (WeChat)

Huaian uses blockchain to improve surveillance 

The Jianpu People’s Court in Huaian, China, isusinga combination of AI recognition, big data and blockchain technology to improve law enforcement surveillance.

Starting Oct. 25, the Jianpu People’s Court will create an “all-purpose” system for monitoring visitors entering and leaving court premises. As soon as a visitor is identified to be trespassing in an unauthorized area, the system will alert court bailiffs for their immediate apprehension. Officials say that the system can drastically reduce the patrolling of hard-to-monitor areas:

“Outside the court walls and in the public rest areas outside the courtroom of the main building, etc., intelligent behavior analysis technology can be used to capture and intelligently analyze the behavior of the parties, provide early warning of possible dangerous behaviors such as abnormal gatherings, strenuous exercise, fights, etc., and remind judicial police and other staff to pay attention and deal with it promptly and appropriately.”

Through the system, court bailiffs would gain access to all visitors’ movements and details within court premises. Augmented reality will also enhance hard-to-see areas for better resolution. 

Bitmain’s revenge, Hong Kong’s crypto rollercoaster: Asia Express

Bitmain allegedly fires staff for speaking out against salary cuts, Hong Kong investors lose faith in crypto after the JPEX scandal, Bitget gets a new crypto credit card and more.

Our weekly roundup of news from East Asia curates the industrys most important developments.

Bitmain allegedly fired staff after salary complaints

Bitcoin application-specific integrated circuit (ASIC) mining manufacturer Bitmain has allegedly fired three of its employees for speaking to the media regarding the withholding of salary payments by their employer. 

According to local news reports on Oct. 17, citing an alleged internal Bitmain memo, the company accused three staff members of breaching various clauses in their employment contracts for sharing their remuneration on social media platforms. The note reads: 

The EMT [Executive Management Team] has decided: (1) Employee Li of product operations and circuit development, is to be fired immediately and blacklisted. (2) Employee Xie of product operations and circuit development, is to be fired immediately and blacklisted. (3) Employee Ding, administrative intern at strategic development PMT, is to be fired immediately and blacklisted. The interns post-secondary institution shall also be informed of the incident.

In addition, the company reserves the right to pursue legal action against the individuals above, Bitmain allegedly wrote. Without authorization by the company, nothing can be said, nothing can be given [to outsiders!]

Bitmains alleged layoff notice (BlockBeats)

On Oct. 9, Cointelegraph reported that Bitmain allegedly paused September salary payments for its staff members as the company has yet to achieve a net positive cash flow, especially in the orders of [new] ASICs. In addition, employees allegedly face a 50% cut to their base salary, with all bonuses and incentives being removed. 

Founded in Beijing, China in 2013, Bitmain is one of the worlds largest Bitcoin mining ASIC manufacturers, with an estimated 70% market share during the previous bull market that ended in 2021. The firms Antminer ASIC series currently leads the industry in terms of hash rate computations for mining Bitcoin. Over the past year, several Bitcoin mining operators have gone bankrupt as the price of Bitcoin plunged while electricity costs surged. 

Hong Kong investors spooked by JPEX scandal 

Despite efforts to regulate the sector, it appears that some Hong Kong residents have lost their confidence in crypto after the largest Ponzi scheme in the citys history, the $175 million JPEX crypto exchange scandal, unfolded last month. 

According to a new study published by the HKUST Business School Central on Oct. 17, 41% of Hong Kong residents are no longer interested in holding crypto assets, a sharp rise of 12% compared to before the JPEX incident. The survey featured 7,900 respondents and was conducted between April and October. 

JPEX booth advertisement posted the day before the exchange was raided by police. (Facebook)
JPEX booth advertisement posted the day before the exchange was raided by police. (Facebook)

The study also revealed that 84% of Hong Kongers have heard of crypto, with 27% of respondents claiming they either hold digital assets now or were previously crypto investors. For those investing in crypto, over 80% said they would not invest over 50,000 Hong Kong dollars ($6,390) into the sector. Interestingly, 57% of respondents said they understood that crypto exchanges must obtain a license before operating in Hong Kong, an increase of 15% compared to before the JPEX scandal unraveled. 

Wu Huang, a professor at HKUST Business School Central, commented: 

We hope that the results of this survey can provide industry stakeholders with more perspectives to help build a sound virtual asset industry. As virtual assets play an increasingly important role in the digital economy, there is a need to strengthen education efforts to make the public better Understand the risks and potential of this emerging field.

Last month, JPEX staff fled their corporate booth at Singapores Token2049 event after the Hong Kong Securities and Futures Commission issued a warning regarding the exchanges unregulated activities. Subsequently, Hong Kong police arrested more than 10 corporate executives and influencers connected to the exchange on charges of fraud. The JPEX scandal has since grown to over 2,300 victims, with losses estimated at $175 million. The exchange was unlicensed at the time of the incident. 

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Factually inaccurate news report wipes out $54 million in market cap

When it comes to reporting, Cointelegraph has seen some blunders over the years. That said, fake news is a problem across the industry. 

On Oct. 16, Bloomberg reported that BC Technology Group, owner of licensed Hong Kong crypto exchange OSL, is contemplating the sale of the latter for 1 billion Hong Kong dollars ($128 million).

On Oct. 17, BC Technology Group issued a clarification stating: The Board wishes to clarify that the contents and statements in the [Bloomberg] Article are factually inaccurate and highly misleading and that it was not contemplating a sale of OSL. 

Unfortunately, investors who bought BC Technology stock based on the divestiture euphoria were not so happy. After publishing the clarification statement, shares of BC Technology tanked 22% during the trading day, wiping off $54 million in market capitalization. Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company, management wrote. 

Bitgets new crypto credit card

Joining the likes of its peers, cryptocurrency exchange Bitget is launching its own crypto-fiat credit card. According to an Oct. 16 announcement during the Future Blockchain Summit in Dubai, the Bitget Card, issued by Visa and backed by digital assets in users accounts and wallets, will be denominated in U.S. dollars and will be accepted in over 180 countries. 

Although many exchanges have rolled out their own crypto debit or credit cards, some have seen pushback from payment processors. On Aug. 25, Mastercard said it would end its cryptocurrency card partnership with Binance in Latin America. Although the firm did not cite a specific reason, experts have pointed to Binances recent regulatory scrutiny as the underlying cause.