Asia Express

China launches world’s first blockchain satellite into space, meanwhile, McDonalds Hong Kong brings McNuggets into the Metaverse.

Chinese blockchain Sputnik’s maiden voyage

A Chinese satellite has become the first in the world to carry a blockchain imaging and screening system into orbit. 

According to local news outlet Red Star News on July 22, the Tai’an Star Era 16 was successfully launched into orbit from the China Jiuquan Satellite Launch Center. Developed by NationStar Aerospace Technology Co., the satellite features a visual blockchain on-orbit certificate storage system dubbed ‘ADAChain’ (not related to Cardano) developed in-house by NationStar. Researchers wrote: 

“The [ADAChain] can realize functions such on-orbit visual blockchain multi-signature authentication, on-orbit video visual broadcasting, and on-orbit visual remote sensing data storage certificate confirmation.”

The purpose of the satellite’s voyage is to “obtain rich spectral information on the surface of the target area,” in the fields of “precision agriculture, water resources management, mineral resource investigation, environmental monitoring, and emergency safety.” Blockchain technology will also assist in achieving the goals of “high spatial resolution, high spectral resolution, and high temporal resolution” in such satellite imaging. 

Digital Yuan CBDC expands to Hong Kong 

The Bank of China’s Hong Kong subsidiary has allowed individuals in the Special Administrative Region (SAR) to utilize the digital yuan central bank digital currency (e-CNY CBDC) for retail shopping. 

According to a July 20 report, over 200 merchants, such as shopping centers, pharmacies, convenience stores, and electronic stores have accepted the e-CNY CBDC as a means of payment from shoppers originating in Mainland China. The e-CNY CBDC is currently not available to Hong Kong users. 

As a SAR, Hong Kong maintains separate political, economic and social institutions from Mainland China. Advocates have previously called for the Hong Kong government to issue its own Hong Kong Dollar CBDC to compete with the likes of Tether (USDT) and USD Coin (USDC). Similarly, Chinese President Xi Jinping has emphasized the importance of CBDCs as a means of settling international trade in local currencies.

Terraform Labs struggles to get back on its feet

“Every time we would make a little progress, there would be some accusation or something that would derail us,” said Terraform Labs’ interim CEO Chris Amani in a Twitter Space on July 20. 

According to Amani, the arrest of the entity’s co-founder and former CEO Do Kwon in Montenegro has essentially shattered all momentum that the ailing network is trying to reestablish. In May 2022, the $40 billion Terra Luna (LUNC) ecosystem collapsed due to the implosion of its algorithmic stablecoin TerraUSD (USTC). Shortly afterward, Kwon created the Terra 2.0 (LUNA) ecosystem. The three tokens have a combined market cap of $1.3 billion at the time of publication. 

In its next phase, Amani says that nine projects built on the combined Terra Luna ecosystem are scheduled to launch within the next few months. None of the projects will reportedly issue their own tokens. In addition, Amani warned that the projects face stiff competition from other layer-one projects due to lacking a Luna Foundation Guard or protocol treasury for financial support. 

South Korean crypto lender shuts down amid criminal proceedings

South Korean crypto lender Delio says all of its company and customers’ assets have been seized in a raid conducted by prosecutors on July 18.

In the July 22 announcement, Delio announced it would pause all interest payments to users effective immediately after the asset seizures made it impossible for the company to continue normal operations. In June, the crypto lender suspended all withdrawals and deposits on its platform, citing exposure to counterparty and fellow South Korean crypto lender Haru Invest, which in turn suspended all transfers due to an issue with a “consignment operator,” B&S Holdings. 

Haru Invest is currently undergoing bankruptcy proceedings. Meanwhile, Delio is one of the largest crypto lenders in South Korea, with around $1.5 billion in customer Bitcoin (BTC), Ether (ETH), and altcoin deposits. Since June 30, the firm has been under investigation by the country’s Financial Services Commission on allegations of fraud, embezzlement and breach of trust.

The firm previously stated that it would enable the withdrawal of users’ assets without stating a specific timeframe. However, similar to the Multichain saga, it is unlikely the company can do so when customers’ assets have been seized as part of criminal proceedings.

In a July 23 blog post, Haru Invest CEO Hugo Lee wrote that B&S Holdings’ assets have also been seized by authorities and that the company is currently trying to recover the funds. All of the firm’s operations have been suspended, and the company is scheduled to liquidate its remaining assets in phases. Haru Invest currently has more than 80,000 users.

Indonesia’s national crypto exchange goes live

A national cryptocurrency exchange operated by the government of Indonesia will be the only legal venue for trading crypto assets in the Southeast Asian country. 

In a July 20 statement from the country’s Commodity Futures Trading Supervisory Agency, also known as Bappebti, the exchange is currently open for spot trading, with future plans to expand its offering to cryptocurrency futures and derivatives. All cryptocurrency exchange registered within the country could join the national exchange, which serves as a clearing house to ensure transactions abide by relevant regulations. 

Despite official support, Islamic organizations in Indonesia have previously deemed the use of cryptocurrency to be haram, or forbidden, for Muslim users. That said, there is no consensus from Islamic scholars regarding the matter. 

McDonald’s launches McNuggets Metaverse in Hong Kong

On the 40th anniversary of the introduction of chicken McNuggets, McDonald’s Hong Kong is partnering with Sandbox to launch a namesake metaverse to celebrate the occasion.

Dubbed “McNuggets Land,” the metaverse will allow users to interact with McNuggets-themed gaming characters and avatars. Randy Lai, CEO of McDonald’s Hong Kong, commented: 

“Rooted in Hong Kong for 48 years, McDonald’s has always strived to deliver innovative experiences and Happy Moments. To celebrate the 40th anniversary of Chicken McNuggets, we are excited to collaborate with The Sandbox to provide fun-filled Web3 Metaverse game experience.”

A reward pool of 100,000 SAND tokens and 10,000 vouchers for McNugget perks will be distributed to participants. Since its entry into then British Hong Kong in 1975, the franchise currently operates 250 restaurants around the city, serving more than 1 million customers per day. 

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The Multichain saga includes secret arrests, a suspicious exploit, and one man allegedly in control of $1.5B. Plus, Binance fires staff.

Decentralized Web 3 cross-chain router allegedly under control of one-man

Imagine a system where all your money is controlled by one man and his family and when there is cause for concern, the propaganda machine immediately goes ‘brrr’ to put on a facade that everything is just fine despite some alarming withdrawls. Sounds more like a one party state? No, welcome to blockchain, specifically, Multichain. 

On July 14, Chinese decentralized cross-chain bridge protocol Multichain announced that it would cease operations after three years. The reason? The only person allegedly holding the private keys to over $1.5 billion in users’ crypto stored on Multichain was its co-founder and CEO Zhao Jun and later, his sister (name unknown). Both were arrested by Chinese police but it’s still not clear why. 

Zhao Jun was reportedly arrested as early as May 21, but it appears that Multichain staff did not want you to know that… until now, when one discrepancy after another made it impossible to bury the truth. 

The whole ordeal started on or around May 24, when Multichain users reported that funds had not arrived for nearly 72 hours after being sent. Admins immediately responded that the delay was due to a backend node upgrade “taking longer than expected,” and that “all affected transactions will arrive after the upgrade is complete.”

“Most routes are working as usual, as some routes (Kava, zkSync, Polygon zkEVM) are temporarily suspended. All affected transactions will arrive after the upgrade is complete. We sincerely apologize for the inconvenience caused.”

At that time, some users were already aware of CEO Zhao Jun’s arrest by Chinese police. In response, co-founder Alfred Xu decided to step in to quash the “rumors” and save users from “disinformation,” writing in the protocol’s Chinese Telegram channel: “Currently all team members are safe and sound; the main operations are proceeding as normal.”

Despite assurances, worries turned into a full-blown panic on May 25 when local news outlet PANewsLab reported that CEO was unreachable. This time, it was fellow co-founder DJ Qian who stepped in and assured that “user assets and staff are safe.” However, Qian also confirmed Zhao Jun’s disappearance. For the next month, Multichain continued to promote its cross-chain protocol. 

Fast forward to July 7, users began noticing over $100 million in unauthorized withdrawals from Multichain’s Fantom Ethereum bridge, along with funds from other sidechains. Around $65 million in Tether (USDT) and USD Coin (USDC) were frozen by their issuers, Tether and Circle, after the transactions led to widespread fear that Multichain was hacked. Some security experts began to suspect that the hack may be an inside job. 

According to Multichain: 

“User assets locked on the MPC addresses were transferred to unknown addresses abnormally. Login information from an IP address in Kunming was found on the cloud server platform, along with a series of operations transferring funds from the MPC addresses.”

Developers wrote that on July 9, Zhao Jun’s sister transferred the remaining assets from a router pool to wallet addresses controlled by her as an “asset preservation action.” Four days later, Zhao Jun’s sister was reportedly arrested by police (again it’s not clear why she was arrested). Because Zhao Jun and his sister were the only ones who had access to operational funds, users’ assets, Multichain servers, and even its website (which its own team is trying to shut down) “since inception,” the project’s own development team can no longer function.  

“Later, the team established contact with Zhaojun’s family and learned that all of Zhaojun’s computers, phones, hardware wallets, and mnemonic phrases were confiscated by the authorities.”

Unfortunately, the worst may still be yet to come for Multichain’s users

To this day, we don’t actually know why Zhao Jun was arrested, what he had been charged with, or any details regarding his case (and no, I don’t think Multichain will tell us either). However, under Chinese law, funds seized as part of a criminal investigation may be considered proceeds of crime, opening a pathway to possible seizure by the state. In that case, it would be an absolute tragedy, unlike Multichain’s decision to leave its entire keys and access in the hands of one (or two) person.TVL on the platform is now down to $139 million.

Binance’s unusual anniversary gift to employees: Unemployment

On the sixth anniversary of the crypto exchange’s founding, Binance decided to give some its staff a gift to celebrate the occasion. However, most of the recipients wished they had never opened it. 

On July 14, Changpeng Zhao (CZ), Binance’s CEO, shilled the sixth year anniversary event, stating, “We will always do what we think is in users’ best interests. We will continue collaborating with regulators. We will also defend what we believe is right,” for the path ahead. The same day, the Wall Street Journal (WSJ) reported that the exchange had reduced its staff count by as much as 1,000 in recent weeks, out of a total count of 8,000 before the layoffs.

According to employees, the layoffs were focused on the global and customer service sectors, with reductions possible of up to one-third of its overall staff count due to ongoing reorganization. The WSJ labels an ongoing U.S. Department of Justice investigation as “the most enduring” challenge facing the exchange. 

In response, CZ wrote: 

“As we continuously strive to increase talent density, there are involuntary terminations. This happens in every company. The numbers reported by media are all way off. 4 FUD.”

The blockchain executive said that despite the layoffs, Binance is “still hiring.” On its website, the exchange currently lists 96 positions available at the time of publication. 

On July 17, the WSJ released a follow-up report claiming that the exchange had ceased employee reimbursements for items such as mobile phones, fitness and working from home, citing “current market environment and regulatory climate,” and the need to slash expenses. Binance is currently undergoing litigation with both the U.S. Securities and Exchange Commission and the U.S. Commodities and Futures Trading Commission on charges of offering unregistered securities and operating an unregistered exchange in the U.S. 

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China’s president Xi Jinping expands CBDC cooperation at SCO, Hong Kong’s crypto licensing costs surge, and Multichain is hacked yet again.

Chinese president shills CBDCs 

On July 4, Xinhua News Agency, China’s state broadcaster, published a transcript of President Xi Jinping’s address to the 2023 Shanghai Cooperation Organisation (SCO) Summit. The SCO is one of the world’s largest regional organizations for political, economic and security cooperation, and was established by China and Russia in 2001.

During the speech, President Xi welcomed Iran as a full organisation member and praised the move for Belarus to join. He also talked up the importance of central bank digital currencies (CBDCs):

“The Chinese side proposes to expand the share of local currency settlements of SCO countries, expand sovereign digital currency cooperation, and promote the establishment of SCO development banks.”

In January, the People’s Bank of China reported that there were 13.61 billion digital yuan CBDCs in circulation, representing around 0.13% of the monetary supply. Since then, the CBDC’s use has expanded to the country’s Belt and Road Initiative, various consumer airdrops, and as a means of payment for everyday transportation. However, experts have warned that, despite the constant promotion, the currency has struggled to gain traction.

On July 10, local news outlet East Money reported that a SIM card linked to the digital yuan CBDC will soon be available to Chinese consumers. Because the digital yuan CBDC digital wallet is embedded in the SIM card itself, individuals can pay for their phone bills via a point-of-sale machine even if their phone has no power.

Hong Kong crypto licensing costs surge to HK$100M

According to a July 5 report by Tencent News, the combined labor, material and technical cost associated with obtaining a Hong Kong crypto exchange license has surged to 100 million Hong Kong dollars ($12.77 million) since its inception on June 1.

However, even if the infrastructure is in place, insiders noted that the license application could still be denied or that the business opportunity will disappear once the license is approved. Tencent News wrote:

“Teams that left Hong Kong settled down in Malaysia last month. They can rent a large-floor work space at a monthly rent of 60,000 RMB ($8,296) in the local city center, and there are very cheap IT technicians in the local area. These emigrated teams believe that compared to Hong Kong, it is even more advantageous to do crypto projects in Southeast Asia.”

All crypto exchanges in Hong Kong must obtain a regulatory license or cease operations in the administrative region by the middle of next year. Since the announcement, exchanges such as Huobi, OKX, BitgetX, Hashkey Pro and Gate.io have all applied for licensing in Hong Kong.

Chinese cross-chain protocol hacked yet again 

On July 7, the developers of Chinese cross-chain bridge protocol Multichain shared a worrying message, stating: “The Multichain service stopped currently, and all bridge transactions will be stuck on the source chains. There is no confirmed resume time. Please don’t use the Multichain bridging service now.” The same day, blockchain security firm PeckShield warned that over $126 million in funds had been drained from Multichain.

Circle promptly froze $63 million USD Coin (USDC) in suspected stolen funds, while Tether froze $2.5 million in USDT. Changpeng Zhao, CEO of cryptocurrency exchange Binance, said that the hack did not affect its users as the firm had withdrawn all funds a while back.

It appears that malicious actors breached the protocol’s private keys and subsequently moved protocol assets elsewhere, although it took until July 10 for the funds to make another move, with a wallet address identified as “Fake_Phishing183873 ” receiving a stunning 10.2 million USDT and 67.76 wrapped Bitcoin (wBTC) from the Multichain address. Immediately after the hack, the price of Multichain tokens dropped by 20% from its highs and now trades at $2.62 apiece. 

Multichain was previously hacked for $7.9 million in July 2021 due to another private key exploit. Interestingly, Zhao Jun, CEO of Multichain, has been missing for nearly two months, with rumors claiming that he had been arrested by Chinese police back in May. Around the same time, users reported that the on-chain transactions had abnormally long transaction times following a recent backend node upgrade. The protocol currently has a total value locked of $1.26 billion.

Singapore tightens grip on crypto activities 

The Monetary Authority of Singapore (MAS) will require Digital Payment Token (DPT) providers to place clients’ assets in a statutory trust by the end of the year. In addition, DPTs will be prohibited from issuing crypto lending and staking services to retail investors. The MAS wrote: 

“These measures are introduced following an October 2022 public consultation on regulatory measures to enhance investor protection and market integrity in DPT services. The consultation received significant interest from a wide range of respondents, with broad support.”

Crypto lending and staking services will still be allowed for institutional and accredited investors. Despite the new regulations, the MAS warned that “while the segregation and custody requirements will minimize the risk of loss of customers’ assets, consumers may still face significant delays in recovering their assets in the event of insolvency of the service providers.” The regulator is seeking public feedback on the proposed rule changes until Aug. 3. 

Thai crypto exchange raises $17.1 million

According to a recent filing, Thai cryptocurrency exchange Bitkub has sold 9.22% of its equity, amounting to 600 million baht ($17.1 million), to Thai conglomerate Asphere Innovations PLC. During the transaction, it was disclosed that Bitkub held 31.9 billion baht ($910 million) in assets and customer deposits, as well as 31.4 billion baht ($890 million) in liabilities. The company recorded a total gross profit of 314.87 million baht ($8.97 million) in the first quarter of 2023.

Bitkub is Thailand’s largest cryptocurrency exchange, with nearly 90% in market share in 2021. Thai-based Siam Commercial Bank had previously signed an agreement to acquire 51% of the company that year for 17.85 billion baht ($510 million). However, the bank canceled the deal in August 2022. Bitkub’s total assets decreased by 64% from Dec. 31, 2021, to Dec. 31, 2022.

Japanese video game conglomerate moves into blockchain gaming

On July 10, South Korean nonfungible tokens firm Line Next revealed it had signed a memorandum of understanding with Japanese video game giant Sega to remake one of Sega’s classic games on its Web3 gaming platform, Game Dosi.

Launched in May, Game Dosi currently has six titles, including its in-house game, Project GD. Through the platform, players can buy and sell NFT heroes and challenge other players.

Founded in 1960, Sega is one of the largest video game conglomerates in Japan, with nearly $2 billion in annual video game sales. Its most iconic franchise is Sonic the Hedgehog, the titular hero of which also serves as the company’s mascot.

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Hong Kong crypto ETFs grow 80% since December, Binance’s co-founder warns against FOMOing into MAV with leverage, and Poly Network is hacked again.

Hong Kong crypto ETFs rise to popularity

During a June 28 interview with Hong Kongs public broadcast agency, Radio Television Hong Kong, Hang Seng Investment Management chief executive and board member Peishan Li disclosed that digital asset ETFs listed in the special administrative region of China have surpassed $12 billion Hong Kong dollars ($1.532 billion) in assets under management. Li noted:

At present, there is no clear goal [from our firm] to create an ETF with the theme of virtual assets, but it has paid close attention to the development of related asset classes, and is examining the possibility of deploying virtual currencies in existing investment products.

According to figures provided by Li, the total AUM of Hong Kong crypto ETFs grew by 80% compared with December 2022, with a daily trading volume of 1.7 billion HKD. This represents 6% of the daily trading volume of all stocks on the Stock Exchange of Hong Kong. The SAR previously allowed the listing of crypto ETFs in July 2022, which initially struggled to gain traction.

Binance co-founder warns of altcoin rout

On July 2, Binance co-founder and former Chinese television host Yi He warned, Please dont trust the communitys trading signals that blindly chase higher prices, noting the price of major altcoins have fallen by 80% to 90% in recent times. The warning came just days after the exchange listed MAV, the token of permissionless decentralized finance protocol Maverick, and offered perpetual MAV contracts at 20x leverage.

Launched in March, Maverick boasts an advanced automated market maker liquidity provider network, securing a $9 million funding round in June. The protocol is backed by prominent names such as Jump Crypto, Pantera Capital, Circle and Gemini. Since its launch, the protocol has reached nearly $55 million in total value locked.

Shortly after the listing, MAV skyrocketed to $1.98 a piece on Binance before slumping to $0.43 at the time of publication, which is still significantly higher than its initial listing price of $0.05. He wrote:

According to the history of previous cycles, the first day of an IEO yields several times [return], and it is not in line with the current market situation to pull it up to 10x or 20x [return]. Please DYOR.

Amid the retail frenzy, the Binance co-founder also warned, The price of tokens is not controlled by Binance. The price is affected by both buyers and sellers. Please pay attention to investment risks. Despite a thaw in crypto markets, the market cap of coins and tokens excluding Bitcoin has remained stagnant over the past year at around $550 billion.

Though not nearly as popular as her counterpart, Changpeng Zhao, He is responsible for the overall marketing strategy and branding of Binance and is credited with the exchanges rise to prominence. She now also serves in the additional role of director of Binance Labs. She also happens to be Zhaos partner, both on a business and a romantic level, with the two sharing two children together.

Chinese DeFi protocol hacked yet again

On July 2, Chinese DeFi protocol Poly Network announced it had been hacked yet again, with the breach affecting as many as 57 different asset types across 10 blockchains.

According to DeFi security analyst Arhat, hackers allegedly exploited a smart contract vulnerability allowing them to mint an unrestricted amount of tokens from Poly Networks multichain pools. An estimated $42 billion worth of tokens were minted, although only $5 million have been reportedly cashed out. Developers wrote:

We kindly request the assistance of cybersecurity professionals and individuals with relevant knowledge. If you possess any information that could aid us in this endeavor, we encourage you to actively contact us.

Shortly after the hack, the total value locked on Poly Network plunged from $277 million to $176 million. Previously in August 2021, hackers stole at least $600 million from Poly Network in what cybersecurity firm SlowMist called a long-planned, organized and prepared attack.

Just two days later, however, the hacker returned almost all of the stolen funds and refused a $500,000 white hat bounty, saying, I will send all of their money back, and that the hack was just for fun because cross-chain hacking is hot.

Hong Kong launches Web3 Task Force

On June 30, Hong Kong announced the establishment of a Web3 Task Force spearheaded by Paul Chan Mo-po, the SARs financial secretary. The team is comprised of 15 industry veterans, along with regulators and government officials, all with a term of two years. According to officials, the Web3 Task Force will be dedicated to the sustainable, responsible development of emerging Web3 technologies in Hong Kong, along with the submission of proposals to the government.

Chan commented: The blockchain technology behind Web3 has the characteristics of disintermediation, security, transparency and low cost, and can solve many difficulties and pain points in finance, transactions, business operations and even life. He continued that an international financial center and a metropolis such as Hong Kong should embrace the development of Web3, albeit under suitable regulation.

On July 3, Animoca Brands CEO Yat Siu was appointed to the task force. Previously, the crypto executive stated that crypto VC is only struggling from an American perspective and that the industry is actually very vibrant in both the Middle East and Asia.

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Huobi Global’s woes intensify, OPNX exchange volume up 2.5M%, 3AC is dead — long live 3AC Ventures, South Korea crypto contagion update.

Huobi co-founder sues own company for copyright infringement

According to local news reports on June 21, Leon Lin Li, former co-founder of cryptocurrency exchange Huobi Global, has filed a copyright infringement lawsuit against the company in Hong Kong. Li claims that despite selling his majority stake to an entity controlled by Chinese blockchain personality Justin Sun last November, his company, X-Spo, still possesses trademark rights associated with the term “Huobi Global,” and that Huobi Global,” the actual exchange, has been using the trademark without authorization. 

Though its not immediately clear why Li seeks litigation against the very company and brand he previously built, a series of heated exchanges between Li and Justin Sun last month may offer some hints.

On May 16, Sun published a series of allegations against Wei Li, Lin Li’s brother. In the tweet, Sun accused Wei Li of receiving millions of Huobi (HT) tokens through “abnormal means” at zero cost and of “consistently selling off these HT tokens and cashing out.” To which Lin Li replied: “I hope Huobi can provide evidence. If it is confirmed that it is zero-cost HT was obtained through illegal means, I will personally pay 10 times the HT [amount] to Huobi company.”

Hodlnauts last voyage? 

According to a recent court filing, the fate of whether troubled Singaporean crypto lending firm Hodlnaut is to be dissolved or restructured will be sealed on August 7. Last August, Hodlnaut halted operations after disclosing that it lost over $300 million of its clients assets from the implosion of the $40 billion Terra Luna ecosystem in May 2022. 

The firm faces approximately $300 million in claims from creditors, who mostly wish to see the firm dissolved. That said, both co-founders Juntao Zhu and Simon Lee want to continue Hodlnauts operations, even though the company had reportedly lost 69% of users deposits. Last November, Singaporean police began a probe into Hodlnauts activities as the firm initially denied exposure to the Terra Luna ecosystem. 

South Korean crypto lending contagion

On June 22, South Korean crypto lending firm Haru Invest announced that it would be terminating a portion or all of its current staff count just days after suspending users deposits and withdrawals. The move comes after the firm accused its consignment operator, B&S Holdings, of fraudulent operations. 

“It comes with a heavy heart to inform you that we will be minimizing the operations of Haru Invest and its affiliated companies to prevent further damages that are likely to be incurred.”

Last week, fellow South Korean crypto lending firm Delio, with over $9 billion in self-reported assets under management, also announced it would suspend withdrawals, citing exposure to Haru Invest. The firm has since clarified it will resume withdrawals, albeit with no schedule disclosed. During an extraordinary investors meeting on June 17, CEO Jung Sang-ho disclosed for the first time that Haru Invest is claiming bankruptcy. 

In addition, Haru also claims that it has filed a criminal complaint against B&S Holdings as well as civil litigation. But it appears that Haru itself does not know exactly what is happening. In a letter to investors on June 20, CEO Hugo Lee wrote: 

“We’ve been explaining about the current situation and progress through the company statement three times so far, but we understand that it’s still far from enough. We are sorry about this as well.”

3AC co-founders stage unlikely comeback

While some firms (and individuals) reputations may be devastated by bankruptcy, it can be a simple nothingburger for others. On June 21, Kyle Davies, co-founder of bankrupt Singaporean hedge fund Three Arrows Capital (3AC), wrote in a tweet:

3AC is dead, long live 3AC Ventures.”

The same day, OPNX, a platform for trading claims against bankrupt crypto entities founded by Davies and fellow 3AC co-founder Su Zhu, said that 3AC Ventures had become the firms “new ecosystem partner.” Interestingly given that the use of leverage by Zhu and Davies played a pivotal role in 3ACs $3.4 billion downfall last year 3AC Venture’s website states that:

“3AC Ventures is focused on superior risk-adjusted returns without leverage.”

On June 24, 3AC Ventures introduced its first investment, an inaugural project dubbed “Raiser,” which allows users to borrow funds based on their on-chain creditworthiness. “Borrowers raise funds by issuing zero-coupon bonds. Lenders buy these bonds to earn a fixed income. Traders can trade these bonds in the secondary market,” the developers wrote in an introductory thread.

Almost one year later, 3AC is still undergoing bankruptcy proceedings, but it appears that clawing money back has become harder than ever. On June 15, 3AC creditors filed a motion to hold Kyle Davies in contempt of court; however, the motion would only apply to Davies, and not Su, as the latters Singaporean citizenship does not subject him to U.S. jurisdiction. The pairs current whereabouts are unknown, and no criminal complaints have been yet filed against the two blockchain personalities.

OPNX: Aspiring blockchain underdog

On April 5, Su Zhu and Kyle Davies crypto derivatives claims exchange OPNX, which is based in Hong Kong, saw a meager $13.64 volume traded on its first day of debut. By late June, that number had risen to $34.1 million (although it’s fair to say not everyone is convinced about the numbers). Following this apparent traction was a near 200% rise in the price of OPNXs native OX tokens to $0.03 in the past month, pushing its fully diluted market cap to nearly $300 million.Heck, the firm even has its own stablecoin now.

Lets face it, nobody, perhaps not even Davies or Zhu themselves, expected OPNX to succeed from the get-go. But successful underdogs often have a deep grudge against those who punched down the hardest while they were out on their luck. This may be why on June 22, OPNX filed a defamation lawsuit against venture capitalist Mike Dudas, alleging the publication of defamatory comments against the exchange in February and March.

Around the same time, the exchange unveiled its new Justice Tokens” (JT), saying “one of the biggest challenges the industry faces is the current prevalence of defamation.” Based on its tokenomics, one JT will exist for each defamation case; it will be an ERC-20 token with a maximum supply of 1 billion. Three quarters will be distributed to OX stakers, 20% will be given to JT-OX liquidity providers, and 5% will be airdropped to Milady nonfungible tokenholders. At the time of publication, its unclear if Davies plans to issue tokens to build rapport against review bombers of his Dubai restaurant during possible litigation proceedings.

“The resulting defamation and harassment greatly deters entrepreneurs and innovators. The presence of these people is a clear net good to the industry.”

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Hong Kong lays out welcome mat for exchanges, Korean crypto lender contagion, Do Kwon banged up abroad, Bank of China’s Ethereum debt note.

Hong Kong lays out the red carpet for crypto exchanges

While some jurisdictions (cough: America) have adopted a regulation-by-enforcement approach toward crypto, others are doing the opposite. According to a June 15 report from the Financial Times, the Hong Kong Monetary Authority is pressuring major financial institutions to accept crypto clients. But its not just regulators laying down a red carpet to boost the special administrative regions Web3 industry. For example, Johnny Ng Kit-Chong, a member of the Legislative Council of Hong Kong, wrote on June 10:

“There have been a lot of news about international virtual asset exchanges in the past two days. I send forth an invitation to welcome global virtual asset exchanges, including @coinbase, to come to Hong Kong, apply for a compliant exchange, and negotiate a listing plan. I am willing to provide assistance!”

Similarly, Joseph Chan Ho Lim, Hong Kong’s under-secretary for financial services and the treasury, revealed in an interview that the Hong Kong Monetary Authority has conducted public consultations on the launch of stablecoins and is in the process of establishing a regulatory framework by the end of the year. “Hong Kong will continue to support the development of the industry in the future and welcomes the industry and talents to come to the SAR,” the politician said.

On June 1, Hong Kong Securities Regulatory Commission issued regulations stipulating the requirements for cryptocurrency exchanges to apply for a license to operate in Hong Kong. For regulated trading platforms, a license application must be submitted to the Securities Regulatory Commission within nine months, or before Feb. 29, 2024. If not, their business in Hong Kong must be terminated before May 31, 2024.

Bank of China mints debt notes on Ethereum

On June 12, BOCI, the investment banking subsidiary of Bank of China, revealed the tokenization of 200 million Chinese yuan ($28 million) in digitally structured notes on the Ethereum blockchain. The move is reportedly the first act of a Chinese financial institution tokenizing a security in Hong Kong. The notes are governed by both Hong Kong and Swiss law as per their origination by the Swiss investment bank UBS. Ying Wang, the deputy CEO at BOCI, commented:

“Working together with UBS, we are driving the simplification of digital asset markets and products, for customers in Asia Pacific through the development of blockchain-based digital structured products. We are encouraged by the evolution of Hong Kong’s digital economy and are committed to promoting the digital transformation.”

Previously, UBS had issued a $50 million tokenized fixed-rate note in December 2022. Meanwhile, the government of Hong Kong issued an 800 million Hong Kong dollar ($100 million) tokenized green bond on Feb. 16, underwritten by four banks and priced with a yield of 4.05% per annum.

Do Kwon: In and out of jail

On June 15, The High Court of Montenegro in Podgorica ordered Terraform Labs CEO Do Kwon and chief financial officer Han Chang Joon back to jail pending extradition proceedings to South Korea for charges relating to their role in the $40 billion collapse of the Terra Luna ecosystem.

Earlier this month, Kwon and Joon were released on 400,000 euros bail each in their ongoing passport fraud case after a Montenegrin Basic Court dismissed an appeal by prosecutors.

Their brief period out on bail was not a happy time either. During their respite from prison, South Korean prosecutors announced they would apply to freeze Kwon and associates $13 million held in Swiss bank accounts. A new hearing on charges of falsifying documents is scheduled for June 16 in the same Basic Court.

According to local sources, Kwon and Joon will be detained for a period of six months as the court decides on their extradition case. Kwon and Joon also face extradition to the U.S. on 11 charges relating to fraud, breach of trust, and embezzlement. 

And if that wasnt enough, there is yet another legal proceeding against Kwon. On June 16, Kwon will be questioned by the Special State Prosecutors Office for a letter he sent from detention to government officials, disclosing his connections with the leader of the Europe Now Movement (PES), Milojko Spaji.

According to the country’s National Security Council, Kwon and Spaji have been friends for five years, and last met in Belgrade in December 2022. Investigators claim there is evidence of financing the PES campaign from Kwon’s laptop. If convicted, Kwon not only faces further jail time in Montenegro but could also serve up to 40 years in a South Korean prison, and even more jail time potentially awaits in the U.S.

Korean blockchain firms daisy chain contagion

On June 14, South Korean yield platform Haru Invest filed a criminal complaint against its consignment operator, B&S Holdings, alleging “fraudulently provided management reports containing false information.”

Haru had paused deposits and withdrawals the day before, stating, “We have discovered through our internal inspection process that certain information provided by a consignment operator was suspected to be false.” Previously, concerned investors took pictures of allegedly empty corporate offices and accused the firm of orchestrating a “rug pull,” which Haru says is inaccurate.

The move immediately affected South Korean Bitcoin lending firm Delio, which quickly announced the temporary suspension of customer withdrawals “in order to safely protect the assets of customers currently in custody,” citing issues at Haru Invest. Delio is one of the largest such entities in South Korea, holding an estimated $1 billion in Bitcoin, $200 million in Ether and $8.1 billion in other altcoins.

A curious commentary regarding the matter came from Jun Du, the co-founder of cryptocurrency exchange Huobi Global, who wrote: 

“With the detonation of Delio, the thundering of [crypto] lending platforms is basically over.”

However, Du warned that contagion related to centralized trading platforms, which started with FTX, is just the beginning. “Not only the newcomers are confused, but also the OGs in the industry. When will the thundering of the black box of centralized crypto entities end?” the former blockchain executive asked, while also expressing his doubts on whether the industry will witness a “slump or be “ushered into a new bull market” after such issues are resolved.

Last year, Huobi co-founders Jun Du and Leon Li reportedly sold 100% of their stake in the exchange to an entity controlled by Chinese blockchain personality and Tron founder Justin Sun. The latter claims that the exchange is now profitable after a period of reorganization, which by the way, included crushing an employee revolt. 

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Hong Kong needs 100K crypto people STAT, AliExpress’ NFT drop censored, Binance humiliated on China TV, AI unicorn grows in 100 days.

Alibaba NFTs censored?

On June 8, AliExpress, the online retail subsidiary of Chinese tech conglomerate Alibaba, announced that it had joined forces with Web3 developer The Moment3! to create a series of NFTs based on shopping themes.

The upcoming collection will feature 5,555 NFTs and is scheduled to debut on June 25, 2023. Less than one day after the announcement was made, AliExpress’ tweet was deleted. Nevertheless, AliExpress’ dev partner, posted a statement confirming the drop.

While no reason has been provided for why AliExpress deleted its original announcement, Chinese authorities have been cracking down on anything crypto-related and forcing firms to remove keywords related to “nonfungible tokens” from their products.

In April, Bitcoin price quotes were added to Douyin, which is the Chinese version of TikTok with over 1 billion users, for less than 48 hours before it was removed by authorities. Cryptocurrencies-fiat transactions, mining, and exchanges (but not outright ownership) are currently banned in China.

Binance humiliated on Chinese TV

If there is anything that the U.S. and China, the world’s two largest competing superpowers, have in common, it is their mutual hatred for cryptocurrency exchanges. On June 6, one day after the U.S. Securities and Exchange Commission sued Binance over allegations of operating an unlicensed exchange and selling unregistered securities in the U.S., Chinese Central Television (CCTV) reported on the lawsuit for its one billion viewers noting that Bitcoin and Binance’s BNB token had fallen sharply due to the regulatory action. CCTV rarely covers anything to do with cryptocurrency. Curiously, the broadcast also acknowledged for the first time that Binance is the world’s “largest cryptocurrency exchange.”

Previously, CCTV broadcast a program about new cryptocurrency exchange rules in China’s special administrative region of Hong Kong that took effect on June 1. The segment was notable for not having anything particularly negative to say about crypto in a country where it is currently banned, which is probably why it’s believed that authorities took down the segment just one day later. Given Chinese authorities’ contempt for crypto exchanges such as the likes of Binance, it is likely that this report will stay up for good.

Hong Kong needs 50K-100K Web3 professionals

In a June 7 fireside chat between local news outlet Chaincatcher and Johnny Ng Kit-Chong, a member of the Legislative Council of Hong Kong, Ng said that the SAR would need at least 50,000 to 100,000 Web3 positions to be filled in the next few years based on conservative estimates.

During the interview, Ng revealed that Hong Kong’s plans to incubate 1,000 Web3 firms in three years have already exceeded expectations, with more than 400 firms registering at the time of publication, four months since its launch. Speaking with regard to Hong Kong’s new crypto rules, Ng said:

“So, in fact, Hong Kong’s policies are relatively open. If you plan to make a game and issue a Token, there is no problem in Hong Kong. The key is whether the form of token sale involves securities or futures’ components, and this part will be regulated. In fact, Hong Kong’s supervision has always existed and is relatively clear, with almost no gray areas.”

Ng first became an investor in the Web3 space in 2010. He came in contact with Satoshi Nakamoto’s Bitcoin white paper seven years later and “completely understood blockchain’s functions and its core values” shortly thereafter. Ng became a member of the Legislative Council of Hong Kong in January 2022 and has since pushed for pro-Web3 regulations in the SAR.

Do Kwon vs. the world

When a man is having a hard time, it’s usually not cool to punch down. However, for law enforcement officials across multiple jurisdictions, as well as hundreds of thousands of investors/victims of last year’s $40 billion Terra Luna collapse, the last thing they probably want to see is for Terraform Labs co-founder Do Kwon to get back on his feet again.

Earlier this week, Kwon scored a minor victory in his ongoing passport fraud case in Montenegro after an appeals process by prosecutors was dismissed by a Montenegrin court, setting himself and former Terraform Labs CFO Han Chang-Joon back out on 400,000 euros bail each once again. But before the two had time to celebrate, South Korean prosecutors announced that they would apply to freeze Kwon and associates’ $13 million held in Swiss Bank accounts.

Around the same time, a scandal broke out in Montenegro relating to Kwon’s alleged connections to the Balkan nation’s former minister of finance, Milojko Spaji. According to local news outlet Balkan Insight, Kwon sent a hand-written letter to Montenegro’s incumbent prime minister, Dritan Abazovi, claiming that he had financed the “Europe Now” opposition party movement led by Spaji. The move came just days before Montenegro’s scheduled parliamentary elections on June 11.

Anyways, Kwon’s troubles in Montenegro are just the beginning. The blockchain executive faces criminal proceedings from both U.S. and South Korean authorities for his role in the Terra Luna implosion and could serve 40 years if convicted, in South Korea alone, before extradition to the United States.

Chinese AI startup reaches unicorn status in less than 100 days

On June 5, Huiwen Wang, co-founder of Chinese food delivery giant Meituan Dianping, raised $230 million at a $1 billion valuation for his AI startup Guangnian Zhiwai, or “Lightyears Away.” The round was led by notable Chinese venture capital firm along with Chinese internet conglomerate Tencent. According to media reports, Lightyears Away seeks to become the OpenAI of China, mirroring the success of its American counterpart.

If anything, the raise taught us that ambition and reputation triumph all. The firm achieved its unicorn status just 100 days after its debut and does not appear to have a minimum variable product. In its last update before the fundraising announcement on May 5, the firm is still seeking core front-end and back-end developers and interns.

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Chinese RMB stablecoin issuer’s Shanghai office reportedly deserted after police raid, and WeChat offers Bitcoin prices — but for how long?

Yuan stablecoin team reportedly arrested

On May 31, local news outlet PANewsLab reported that the developers for the offshore Chinese yuan and Hong Kong dollar stablecoin issuer CNHC had lost contact or had been taken away by law enforcement officials. A photo shows what appears to be an empty office building at CNHC’s Shanghai division with the following message posted:

“The building’s assets have been seized by law enforcement; vandalism is prohibited.”

In March, CNHC raised $10 million in its Series A, led by KuCoin Ventures, Circle and IDG Capital. The team said back then that it planned to use the funds for “expansion in the Asia Pacific Region” and was in the process of moving its headquarters from the Cayman Islands to Hong Kong.

The reported move appears to be part of a wider crackdown on cryptocurrencies by Chinese authorities. On May 24, Asia Express reported that tokens of Singaporean inter-blockchain communications protocol Multichain had plunged 30% on a delayed backend upgrade and rumors of Chinese police arrest of its core developers.

Though Multichain says that it is still operational, it stated on June 1 that it is still unable to contact CEO Zhaojun and obtain the necessary server access for maintenance,” and as a result, the protocol would need to suspend a number of affected cross-chain services.

In the past two days, the Multichain protocol has experienced multiple issues due to unforeseeable circumstances. The team has done everything possible to maintain the protocol running, but we are currently unable to contact CEO Zhaojun and obtain the necessary server access for

— Multichain (Previously Anyswap) (@MultichainOrg) May 31, 2023

Hong Kong opens up retail crypto licensing

Despite censorship and bans in mainland China, the adoption of cryptocurrency exchange regulation in Hong Kong has proceeded as scheduled. On May 31, the Hong Kong Virtual Asset Consortium was formed to approve the top 30 cryptocurrencies by market cap for listing and to conduct quarterly reviews of registered digital asset exchanges to ensure compliance with licensing regulations that took effect on June 1.

On another front, according to a research report published by multichain wallet provider BitKeep, notable crypto projects such as Avalanche, Conflux, EOS and Fantom have all joined Hong Kongs Web3Hub ecosystem fund unveiled in April. With a budget of $10 million, the fund will incentivize Web3 projects to set up subsidiaries or headquarters in the special administrative region of China. The fund is headed by Paul Chan Mo-Po, financial secretary of Hong Kong SAR.

Despite the growing traction, BitKeep researchers reminded that HK regulations remain strict for the time being:

The new regulations clearly limit the types of tokens that can be traded and the types of services that exchanges can provide. Cryptocurrencies must meet the Securities and Futures Commission (SFC) strict regulations, which emphasize that only non-security tokens can be traded, have a history of at least 12 months, and the token has been included in two cryptocurrency indices.

In addition, exchanges are prohibited from providing wealth management products, as well as the provision of lending and deposit services, along with derivative transactions such as perpetual crypto contracts. “However, the regulator recognizes the importance of derivatives trading in the encrypted market and will conduct further research and consideration,” researchers noted.

WeChat allows BTC price quotes

As of June 1, WeChat, Chinas largest social media app with over 1 billion users, has indexed Bitcoin price quotes in its search queries. The move is significant, considering that China has pretty much banned all crypto-related activities such as exchanges, crypto mining, and fiat-crypto on-ramping since 2021.

However, if history is any guide, the WeChat Bitcoin search query probably won’t last for long. Formerly, billion-user platforms China Central Television and Chinese TikTok variant Douyin have allowed something similar, only to have authorities pull them down just days after launch.

All Nippon Airways launches NFT marketplace

On May 30, All Nippon Airways (ANA), the largest airline in Japan with over $12.2 billion in revenue in the last fiscal year, launched an aeronautical-themed NFT marketplace dubbed “ANA GranWhale.” Developers wrote:

“NFTs have been used mainly in fields such as art and music as a technology for expressing ownership of digital assets. This time, the ANA Group will apply NFT to the aviation industry.”

As its inaugural step, ANA GranWhale will debut aerial photographer Luke Ozawas first-ever digital photo in his career as an NFT with an asking price of 100,000 yen ($719). The second installment, starting on June 7, will feature a 3-D model NFT conversion of the first special paint Boeing 787 aircraft launched by ANA. The NFT marketplaces development began last August as part of ANA’s vision of building a Web3 virtual travel platform.

“With a view to commercializing NFTs as specialty products from various parts of Japan, we aim to improve the value of customer experience, including local and overseas, through the ‘GranWhale NFT marketplace.’”

Fed inspires Astar Network to revamp tokenomics

On May 28, Sota Watanabe, the founder of Japanese blockchain Astar (ASTR) Network, expressed his desire to revamp the protocols tokenomics, saying that even the United States government was targeting an inflation rate of 2%, compared to levels of around 8.4% currently. Drawing further inspiration from the Federal Reserve, Watanabe proposed mirroring the Feds meeting decisions every quarter or every six months and updating the blockchains token inflation rate on a variety of factors, writing:

“Decentralizing one of the roles of the FED can be a challenge but also an interesting trial.”

The crypto executive said he wished to either fix ASTRs total supply and make the inflation rate smaller and smaller such as in Bitcoin, or automatically decide the inflation rate based on network usage, as in Ethereum, or use a mix of both models.

A multichain decentralized application proposal, Astar recently launched the second iteration of its smart contracts, supporting both Ethereum Virtual Machine (EVM) and WebAssembly Virtual Machine (WASM VM) on its mainnet for developing new cross-chain apps.

BitFlyer and the Travel Rule

According to a recent announcement, Japanese cryptocurrency exchange bitFlyer will comply with the countrys Financial Services Agencys new Travel Rule starting June 1. The Travel Rule states that a crypto asset exchange operator sending crypto assets at the request of a user shall provide specific information about the sender and the recipient to the exchange operator receiving the transfer.

In addition, further restrictions are imposed on crypto transfers to any of the 21 countries, including Japan, Switzerland, Canada, Bahamas, Hong Kong, and the U.S., utilizing the Coinbase-led Travel Rule Universal Solution Technology (TRUST).

BitFlyer clients who wish to transfer crypto to any of the 21 TRUST countries can only send Bitcoin or Ethereum and select ERC-20 tokens. Such requirements do not apply to transfers to addresses identified with any of the remaining non-TRUST countries. As told by bitFlyer:

“The purpose of the travel rule is to prevent the ability for terrorists and other criminals from using digital fund transfer systems as well as track unauthorized use.”

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Chinese state TV’s crypto news report gets memory holed, Multichain token plunges as arrest rumors swirl, memecoin hype subsides, and more.

Crypto embraced, then forgotten by Chinese state television

On May 23, China Central Television (CCTV), the countrys government-owned broadcasting corporation, aired a short, 98-second segment regarding the adoption of cryptocurrencies in Hong Kong.

During the session, state news anchors briefed its audience on how Hong Kong regulators have made final preparations for the trading of virtual assets in the special administrative region and will accept applications from virtual asset trading platforms. Interestingly, nothing overtly negative about cryptocurrencies was mentioned during the broadcast a sharp contrast to Chinas official policy that banned cryptocurrency mining and exchanges elsewhere in the country.

For some viewers, such as Binance CEO Changpeng Zhao, the programming represented a big deal. Zhao reports that the Chinese speaking communities are buzzing. Historically, coverages like these led to bull runs.

Unfortunately, the euphoria was short-lived, as Chinese authorities appear to have taken down the link just two days after the program aired. This wasnt the first time such incidents have occurred. Last month, Douyin, the Chinese version of TikTok, began publishing cryptocurrency price quotes within its in-app search index. The move stirred a major bullish frenzy among Chinese crypto users, but the price quotes were removed from the app just one day later, replaced by a message stating: Unofficial digital currencies do not possess the same legal standing as fiat currencies. Please invest cautiously.”

Hong Kong finalizes cryptocurrency regulations

In addition to allowing virtual asset trading platforms to obtain proper licensing, SFC officials stated on May 23 that exchanges could also provide services to retail investors, contrary to its guidance last May that focused on an institution-only approach.

Shortly after the announcement, cryptocurrency exchange Gate.io kickstarted its Gate.HK platform for registration and trading services in the special administrative region. Then, Hong Kong virtual bank ZA Bank said it would launch virtual asset trading services for retail investors under the new Hong Kong licensing regime. Now that the rules are crystal clear, the SFC wrote:

Operators of virtual asset trading platforms who are prepared to comply with the SFCs standards are welcome to apply for a licence. Those who do not plan to do so should proceed to an orderly closure of their business in Hong Kong.

Do Kwons bail revoked

Before the collapse of the $40 billion Terra Luna (LUNC) ecosystem in May 2022, Terraform Labs co-founder and CEO Do Kwon was known for making fun of critics based on their level of wealth compared to himself (your size is not size.”)

However, it appears that Kwon has finally gotten into some trouble that cannot be solved with money. On May 25, the High Court of Montenegro revoked both Kwons, and former Terraform Labs chief financial officer Han Chong-joons 800,000 euro ($858,000 bail and ordered their return to jail from previous house arrest. The blockchain executives were apprehended on March 23 in Podgorica Airport over allegedly falsified documents after being on the run for roughly six months from an Interpol Red Notice.

Kwon faces up to 40 years imprisonment in the criminal proceedings against him in South Korea and five years in prison on the falsified charges in Montenegro. Court filings state:

In the renewed proceedings, the court will proceed according to the High Court’s grounds for termination and after that make a decision based on the proposal of the defense counsel for the defendants to accept bail. By the decision of this court, the defendant’s detention was extended. The main hearing is scheduled for June 16.

Cross-chain token plunges 30% after arrest rumors

On May 24, the token price of Singaporean cross-chain router protocol Multichain (MULTI) fell by 30% over 24 hours to trade at $4.97. The sell-off began after users reportedly had abnormally long transaction times following a recent backend node upgrade that caused certain routes, such Kava, zkSync and Polygon zkEVM, to become temporarily suspended.

While the project promised that all affected transactions will arrive after the upgrade is complete, investor alarm turned into a full-blown panic after one user tweeted arrest rumors. The tweet, which garnered 820,000 views, alleged without evidence that Multichain developers had been arrested by Chinese police with $1.5 billion dollars of contract funds under control. Multichain is currently headquartered in Singapore with around $1.6 billion in total value locked.

Alfred Xu, a Multichain co-founder, quickly stated thereafter in the protocols Chinese Telegram chat that: Currently all team members are safe and sound, the main operations are proceeding as normal.

However, on May 25, Chinese blockchain news aggregator PANewsLab reported that Multichain co-founder and CEO Zhao Jun is currently unreachable. At the same time, DeJun Qian, another co-founder of Multichain, said on Twitter that while he is personally safe and sound, he, too, could not reach fellow co-founder and CEO Zhao Jun.

On May 25, Binance announced that it would be suspending 10 bridge networks associated with Multichain until it receives clarity from the development team. It has since resumed the Fantom to Ethereum Multichain bridge. The same day, Andre Cronjes Fantom protocol ceased providing liquidity with MULTI on the decentralized exchange Uniswap due to uncertainty surrounding the development team but said funds had not been sold. Approximately $777 million in funds of Ethereum, $405 million on BNB Chain, and $100 million in funds on Fantom are currently held with Multichain.

Memecoins come, memecoins go

After a period of crazy returns on investment and joint listings on Asia Pacific-focused crypto exchanges, the price of memecoins such as Pepe Coin (PEPE) and Milady (LADYS) have fallen by over 50% within the past two weeks. Though, in hindsight, this shouldnt have come as a surprise to anyone as developers of such tokens have warned that the coins they created have no intrinsic value, and are completely useless. According to a report published by cross-chain wallet developer BitKeep:

It is important to recognize that memecoins derive their value primarily from short-term hype and speculative fervor. Consequently, the likelihood of these coins retaining any significant value over the long term is relatively low. Memecoins typically exhibit remarkably short life cycles, and their popularity tends to wane relatively quickly. Therefore, it is prudent to approach memecoins as short-term investments that are best bought and sold during periods of peak popularity.

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Mastercard and Visa join Hong Kong’s CBDC pilot, new installment in Justin Sun’s Huobi soap opera, and a GameFi token pumps on no news.

Hong Kong partners with 16 companies to build CBDCs

On May 18, the Hong Kong Monetary Authority (HKMA) announced the launch of the cyber Hong Kong dollar pilot project. According to officials, 16 companies from the financial payment and technology sectors will conduct the first round of trials this year on the feasibility of a Hong Kong dollar central bank digital currency (e-HKD). Companies included in the pilot include Alibaba Groups Alipay Financial, Mastercard Asia, Ripple Labs, Visa and HSBC.

The digital Hong Kong dollar will start off with six potential use cases; comprehensive payments, programmable payments, offline payments, tokenized deposits, Web3 transaction settlements and tokenized asset settlements. The CBDC is scheduled for a three-stage approach, with the novel pilot program being an important aspect of the second stage.

However, the HKMA has not yet decided whether to officially launch the CBDC. It expects to share the results of the trials at Hong Kong Fintech Week 2023 in Q4. HKMA CEO Yue Wai-man commented:

“Although the HKMA has not decided whether or when the CBDC will be launched, we are pleased to launch the Cyber Hong Kong Dollar Pilot Scheme. This is a good opportunity for the HKMA to join hands with the industry to explore innovative use cases and prepare for the possible launch of the CBDC in the future”

Back in October 2021, Mastercard said that it would be preparing its payment infrastructure for integration with CBDCs. Likewise, Visa believes that stablecoins and CBDCs will play meaningful roles in payments and has an ongoing blockchain interoperability project related to the matter.

Bitgets comfy run in Q1

According to its first quarter update published on May 17, cryptocurrency exchange Bitget reached $59 billion and $658 billion in spot and futures traded, respectively, representing growth rates of 8% and 27% from Q4 2022. In other metrics, the book value of the exchanges Protection Fund surged to $380 million from $300 million during the same period, aided by a bullish rally in the price of major cryptocurrencies.

The exchange says that its proof-of-reserves increased from 223% on December 20, 2022, to 246% on April 3, 2023, as it completed listings for 105 coins, bringing the total to over 500 listings. The exchanges native token, BGB, rallied by 120% during the quarter, to $0.47 at the time of publication.

Biget is committing $10 million over five years in a novel Blockchain4Youth initiative to offer blockchain courses and certifications through Bitget Academy and will host campus lectures in partnership with universities worldwide. In April, the exchange received its regulatory license in Lithuania, allowing it to provide crypto services both in and from the Baltic nation.

Huobis latest drama

On May 16, Justin Sun, the founder of Tron blockchain and relatively new de-facto owner of cryptocurrency exchange Huobi Global, published a series of allegations against Wei Li, the brother of Huobi Global co-founder Leon Li. In his statement, Sun accused Wei Li of receiving millions of Huobi (HT) tokens through abnormal means at zero cost and of consistently selling off these HT tokens and cashing out.”

“We plan to engage with Li Wei to negotiate a refund and arrange for the destruction of his remaining HT tokens. This action is not only a matter of justice but also serves the best interests of everyone in the HT DAO community.”

Sun claims that Li Wei has not made any substantial contributions to our community.” and would therefore seek disgorgement of any profits related to Wei Lis sale of the tokens and send them to a null address for a token burn. In response, Wei’s brother Leon Li wrote:

“I hope Huobi can provide evidence. If it is confirmed that it is zero-cost HT was obtained through illegal means, I will personally pay 10 times the HT [amount] to Huobi company.”

Leon Li followed up by saying, “I hope that Huobi will return the users legal assets,” if the allegations are found to be false. In October 2022, Leon Li and fellow co-founder Du Jun reportedly sold 100% of the exchanges stake to an investment firm controlled by Justin Sun. Since changing owners, the exchange has seen its fair share of woes, although Sun claims that Huobi has returned to profit and things have settled. If youre curious, this wasnt the first abnormal action surrounding the Huobi token either…

No news is good news as GameFi token surges over 300%

On May 17, the token of NFT multiplayer online battle arena game Superpower Squad (SQUAD) surged by over 300% to a high of $0.017 apiece within a single day before its pullback. No material news was associated with the development, and the tokens price has mostly been on a losing streak since March.

Superpower Squads developers tell Asia Express it has two game modes in development. The first is a Zombie Crisis survival mode where the top surviving players would receive NFT props (items used to kill enemies) upon round completion. In the second game mode, players would receive unique buffs (temporary powers) depending on the clan composition of NFT heroes, with each clan requiring one NFT hero of legendary rarity.

The devs stating things are still moving comes after community speculation that the game had ceased development as the price of SQUAD dropped on also seemingly no news. The game previously surpassed 100,000 downloads in January.

Superpower Squad is by no means the first blockchain project to have high price variance for no particular reason. On April 14, shares of Singaporean Bitcoin (BTC) mining operator SAI.TECH surged by over 360% in one day to a high of $7.42 before giving back much of its gains. Like Superpower Squad, SAI.TECH had no material announcements either before or after the wild price action.

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