Hong Kong

BlockShow unites with BlockDown for a crypto festival in Hong Kong

BlockShow marks its return to in-person conferences by joining forces with BlockDown to bring a crypto festival to an iconic Hong Kong location in May 2024.

BlockShow, a major global conference devoted to the blockchain and cryptocurrency industry, is making a comeback after four years, joining forces with BlockDown Festival — powered by public relations agency EAK Digital — to bring a festival-like Web3 event to Hong Kong in 2024.

First launched in 2016, BlockShow is backed by the blockchain industry publication Cointelegraph and will work closely with EAK to produce the BlockShow X BlockDown, the Asia edition, which will take place at Hong Kong’s government-backed Cyberport venue. Known for hosting prominent Web3 companies such as Animoca Brands, Cyberport is the Silicon Valley of Hong Kong and will be the primary venue for the main BlockShow X BlockDown Asia event.

The main conference will take place from May 8 to 9, 2024, and will be accompanied by side events across several additional days. Choosing Hong Kong was only natural, with the region’s growth as a global technology and Web3 hub in recent years making it the perfect location. The Cyberport will be transformed into Web3 city, with access to multiple floors, exhibition spaces, galleries, meeting zones, cafes, restaurants, workshop rooms, open-air spaces and more.

Hong Kong regulator blocks access to two crypto entities, warning of fraud

According to the securities regulator, misleading information online could encourage individuals to invest in the HKD token issued by HongKongDAO.

The Securities and Futures Commission (SFC) of Hong Kong has issued a warning related to suspected fraud involving crypto entities Hong Kong Digital Research Institute and BitCuped.

In a Dec. 6 notice, the SFC said the Hong Kong Police Force had blocked access to the websites of BitCuped and Hong Kong Digital Research Institute — also known as HongKongDAO — claiming users could be fooled into making illegitimate investments. The regulator also issued cease-and-desist letters to the firms’ website operators.

“The SFC suspects HongKongDAO may be disseminating false and misleading information about itself and its business through online channels,” said the Dec. 6 notice. “The SFC notes that BitCuped claims on its website that ‘Laura Cha’ and ‘Nicolas Aguzin’ serve as its Chairman and Chief Executive Officer respectively, when in fact none of them has any affiliations with BitCuped.”

Hong Kong securities association suggests ICO to boost economy

The Hong Kong Securities and Futures Professional Association also suggested that the region’s authorities could implement Islamic Banking.

The suggestion that Hong Kong could make an initial coin offering (ICO) appeared in a list of propositions formulated by the Hong Kong Securities and Futures Professional Association to revitalize Hong Kong’s economy.

The document, signed by association president Chen Zhihua, was published on Nov.

The suggestions include the legal recognition of Islamic finance and inviting stakeholders from the Islamic world to set up a committee to formulate “Islamic finance guidelines with Hong Kong characteristics.” The 10th point of the list contains only the following line without any details:

“Consider launching an initial coin offering (ICO) mechanism.”

As there is no further explanation, it is unclear whether the association suggests crafting a comprehensive framework for ICOs or creating an authorized platform.

The era of ICOs is widely seen as ending in 2020 due to regulatory pressure and the entrance of institutional investors into the crypto market. The capitalization of ICOs plummeted 95% from its boom year in 2018 to 2019.

Despite regulatory clarity, Hong Kong crypto ETFs experience lukewarm demand

The daily trading volume of all Hong Kong crypto ETFs averaged about $1.19 million between December and early February.

According to a report published by the Hong Kong Stock Exchange (HKSE), two Bitcoin (BTC) exchange-traded funds (ETF) and an Ether (ETH) ETF listed on HKSE averaged 9.30 million Hong Kong dollars ($1.19 million) in daily trading volume from Dec. 16, 2022, to Feb. 7, 2023. As the first region in Asia to provide such access to crypto ETF products, Hong Kong exchange operators praised regulator clarity for its role in “seizing opportunities in virtual asset development.”

However, the numbers appear somewhat lukewarm when viewed in a global context. On April 17, Cointelegraph reported that Bitcoin and Ether futures and options listed on the United States-based CME Group surpassed $3 billion in daily average notional value. Similarly, the ProShares Bitcoin Strategy ETF listed on NYSE Arca has an average daily volume of approximately $196 million.

Interestingly, unlike Hong Kong, the U.S. lacks regulatory clarity regarding crypto ETFs. While the U.S. Securities and Exchange Commission has approved futures-based Bitcoin ETFs, such as the ProShares Bitcoin ETF, it has denied the conversion of Grayscale Bitcoin Investment Trust (GBTC), the largest over-the-counter Bitcoin fund in the country, to a listed spot ETF. Similarly, the Commission denied the listing application of Ark Investment Management’s ARK21 Shares Bitcoin ETF.

One of the Bitcoin ETFs included in the HKSE report is that of the Samsung Bitcoin Futures Active ETF, created by the investment management arm of the South Korean conglomerate. The product is designed to satisfy the needs of institutional investors who want to trade Bitcoin futures while in an Asia-Pacific time zone.

Magazine: Samsung’s Bitcoin ETF, $700M bust, Coinbase exits Japan

China’s state-affiliated banks onboarding crypto companies in Hong Kong

Chinese banks are opening bank accounts for regulated crypto companies, with several acting as a payment layer for the crypto platforms.

Hong Kong’s push to become a crypto hub has opened an opportunity for not just crypto companies but many state-affiliated banks in China. The Chinese banks have shown interest in building partnerships and onboarding regulated crypto companies in Hong Kong, despite a blanket bank on crypto-related activities in mainland China.

The Hong Kong arm of the major Chinese state-owned Bank of Communications is collaborating with several cryptocurrency businesses registered in the city. The bank is in talks to open accounts for regulated companies, according to a report published in The Wall Street Journal.

In addition to the Bank of Communications, ZA Bank — Hong Kong’s largest virtual bank controlled by Chinese internet insurer ZhongAn Online P&C Insurance — will also act as the settlement bank for the crypto companies. The banks will together facilitate the depositing and withdrawal of fiat currencies.

Along with providing account services to cryptocurrency businesses, these banks will serve as settlement banks to enable token deposits at authorized exchanges to be withdrawn in Hong Kong dollars, Chinese yuan and U.S. dollars.

At the start of the year, Hong Kong’s financial secretary Paul Chan clarified that the city is pushing to collaborate with more crypto firms in 2023. As a result of the government’s progressive crypto approach, nearly 80 cryptocurrency firms have shown interest in opening or expanding their business in the city. The government’s crypto push has attracted some surprising allies in the form of Chinese banks and funds.

As Cointelegraph reported, besides onboarding crypto companies and opening bank accounts for regulated firms, the Chinese government-backed CPIC Investment Management launched two crypto funds. CPIC is the second-largest insurance firm in mainland China, and its newly launched crypto funds are focused on institutional investors

China’s growing interest in crypto via Hong Kong has surprised many in the crypto ecosystem, as the country has carried out multiple crackdowns on crypto-related activities in mainland China.

Magazine: ZK-rollups are ‘the endgame’ for scaling blockchains: Polygon Miden founder

Binance CEO CZ: Regulators need deep understanding crypto for proper rules

Binance CEO Changpeng Zhao emphasizes the need for a proper understanding of the crypto industry by regulators and active engagement by industry players to achieve regulatory clarity.

In a fireside chat during the Hong Kong Web3 Festival, Changpeng Zhao (CZ), CEO of Binance, expressed that it is important for crypto regulators to have a deep understanding of the industry to facilitate proper crypto regulations. The fireside chat was moderated by Deng Chao, the CEO of Hashkey Capital.

According to CZ, “There is a very natural tendency to borrow traditional financial industry regulations to apply to crypto. Crypto is different from banks and traditional financial industries” He went on to explain that knowing the answers to simple questions like how to classify different assets is important in deciding on regulations for the industry, as there are many types of crypto assets. Some assets may look like securities, others like commodities, or utility tokens, some may even have a combination of those characteristics.

When asked his recommendation on good regulation framework, CZ said that having unclear regulations is “the worst” and having regulatory clarity is better. He went on to say that it’s best to let the industry develop fully before introducing regulations. The particular reason for this is that it’s difficult to predict what exactly is going to be popular in the industry.

In relation to crypto industry players and their approach towards crypto regulators, CZ advised that there is a need to be very actively engaged with them. He explained that though many of the crypto regulators all around the world are very receptive, there are some who are still very skeptical. However, skepticism should deter crypto industry players from engaging the regulators in conversations.

Responding to what could trigger mass adoption of crypto, CZ said that the fact that many governments are trying to come for crypto may actually be the trigger to make crypto grow. He explained that the government’s efforts in shutting down banks, fiat access and putting more restrictions on the traditional financial markets actually push more people towards crypto.

CZ stressed the need for crypto industry players to exercise patience. He said that understanding that the first draft of regulations is always likely overly restrictive is important and so in just a matter of time, a balance is usually found.

Hong Kong supporting web3 recently showed support for Web3 by taking major steps to develop the Web3 industry.

Magazine: Thailand’s $1B crypto sacrifice, Mt Gox final deadline, Tencent NFT app nixed

Binance CEO CZ: Regulators need deep understanding of crypto for proper rules

Binance CEO Changpeng Zhao emphasizes the need for a proper understanding of the crypto industry by regulators and active engagement by industry players to achieve regulatory clarity.

According to CZ, “There is a very natural tendency to borrow traditional financial industry regulations to apply to crypto. Crypto is different from banks and traditional financial industries.”

He went on to explain that knowing the answers to simple questions like how to classify different assets is important in deciding on regulations for the industry, as there are many types of crypto assets. Some assets may look like securities, others like commodities or utility tokens, and some may even have a combination of those characteristics.

In relation to crypto industry players and their approach toward crypto regulators, CZ advised that there is a need to be very actively engaged with them. He explained that although many of the crypto regulators all around the world are very receptive, there are some who are still very skeptical. However, skepticism should deter crypto industry players from engaging the regulators in conversations.

Responding to what could trigger mass adoption of crypto, CZ said that the fact that many governments are trying to come for crypto might actually be the trigger to make crypto grow. He explained that the government’s efforts in shutting down banks, fiat access and putting more restrictions on the traditional financial markets actually push more people towards crypto.

CZ stressed the need for crypto industry players to exercise patience. He said that understanding that the first draft of regulations is always likely overly restrictive is important, and so in just a matter of time, a balance is usually found.

Hong Kong recently showed support for Web3 by taking major steps to develop the Web3 industry.

Magazine: Thailand’s $1B crypto sacrifice, Mt Gox final deadline, Tencent NFT app nixed

Metalpha raising $100M to offer Grayscale Bitcoin products in Hong Kong

Metalpha has secured $20 million out of the planned $100 million for its new fund from overseas Chinese investors, the CEO said.

Hong Kong-based cryptocurrency wealth manager Metalpha Technology is working to offer new entry points into Bitcoin (BTC) and Web3 to investors in Asia.

Metalpha is raising a $100 million fund to invest in Bitcoin and other crypto products from the major United States-based crypto asset manager, Grayscale Investments. The new fund aims to help Chinese investors get a regulated channel to invest in cryptocurrencies and Web3, Bloomberg reported on April 12.

Known as the Next Generation Fund I, Metalpha’s upcoming investment project is launched in partnership with NextGen Digital Ventures. The fund will invest directly in Grayscale’s crypto investment products and indirectly through structured derivatives related to Grayscale’s products, allowing institutions and high-net-worth individuals to get indirect exposure to crypto.

According to Metalpha founder and CEO Adrian Wang, the company has secured $20 million for its new fund since March. He said that the fund had attracted many Chinese investors, stating:

“A lot of our clients are family offices with traditional backgrounds, rather than pure crypto or pure Web3 native investors […] It’s overseas Chinese institutions — some of them are family offices, some of them are public companies.”

Wang also noted that Metalpha had seen increased demand for its products recently, which followed a series of difficulties connected to the bear market of 2022 and the collapse of the FTX crypto exchange. “A lot of clients hesitated to place new orders, but now it’s getting much better,” Wang stated, adding that a lot of new traffic is coming in, and people are gaining more confidence now.

Founded in 2015, Metalpha was initially known as Dragon Victory International, offering supply chain management platform services and cryptocurrency derivatives product services in Hong Kong. The firm rebranded to Metalpha in late 2022, soon after receiving a Nasdaq notification regarding minimum bid price deficiency. Metalpha regained compliance with Nasdaq’s listing rules as of April 2023.

Metalpha is backed by Singapore-based venture capital firm Antalpha, which has been reportedly working with the Chinese crypto mining firm Bitmain to offer low-interest loans to crypto miners.

Magazine: Asia Express: US and China try to crush Binance, SBF’s $40M bribe claim

Hong Kong takes the lead in blockchain logistics after Maersk TradeLens demise

China and Hong Kong are pouring money into the blockchain logistics industry to take the lead.

After Danish logistics firm Maersk terminated its blockchain-based supply chain platform last year, industry builders have not given up on blockchain applications in global trade.

Hong Kong-based Global Shipping Business Network (GSBN), a nonprofit consortium focused on blockchain trade applications, is bullish on blockchain as a crucial logistics tool in the long term.

According to a report by the South China Morning Post, GSBN currently operates one of the world’s largest platforms that can be described as an alternative to Maersk’s TradeLens tool. The platform is based on a permissioned blockchain with strong data governance, allowing only authorized parties to contribute and consume shipping-related data.

Since launching its blockchain-based shipping platform in 2021, GSBN has tapped major shipping partners like Cosco, Orient Overseas Container Line and Hapag-Lloyd. The organization has also reached partnerships with terminal operators like Hutchison Ports, SPG Qingdao Port, PSA International, Shanghai International Port Group and Cosco Shipping Ports.

Among the members, only German Hapag-Lloyd and Singaporean PSA International are not based in mainland China or Hong Kong.

Despite major industry firms like Maersk terminating similar projects, GSBN CEO Bertrand Chen is confident that blockchain has yet to catch on, and its adoption may take another decade.

“I think for a lot of people, the clear understanding is this industry has digitized,” Chen said, arguing that there’s no chance that global trade will continue using “pen and paper” by 2032. According to the executive, blockchain has the potential to help the industry transform in response to triggers of supply issues like COVID-19. He stated:

“Because of COVID-19, because you have to change the process, I think this is one of the regular use cases of blockchain […] Probably that’s better than NFTs of digital art. NFTs of documents for global trade — this will be the real killer use case.”

The executive suggested that China was taking the lead in blockchain logistics because the country has been pouring money into the industry. He also acknowledged that many local blockchain solutions have so far been highly specific to China.

“When you throw so much money in one sector because it’s a policy, you’re bound potentially to be able to get lucky,” Chen said. He added that China’s investment in blockchain development would benefit GSBN by generating more potential partners for the firm.

The GSBN CEO also said the organization has global ambitions and is working to attract more European shipping lines. The nonprofit even hopes to onboard Maersk one day but admits that such a scenario “may be slightly challenging,” Chen noted.

Hong Kong has been increasingly emerging as a major Web3 and cryptocurrency hub over the past few months, with the local government taking action to adopt clear industry regulations. Despite a blanket ban on crypto in China, some Chinese government-related firms have reportedly been growing interested in crypto investment, with state-owned firms like CPIC launching crypto-related funds in early April.

Magazine: Asia Express: Zhu Su’s exchange did $13.64 in volume akshually, Huobi

‘Right time’ for Hong Kong’s Web3 push despite market flux — financial secretary

Hong Kong has already taken serious steps to develop the Web3 industry and its financial secretary says now is the right time to keep moving forward.

Now is the “right time” for Hong Kong to push forward with Web3, despite the crypto market fluctuations, according to the financial secretary of Hong Kong.

In an April 9 blog post, Paul Chan explained that one of the three major directions he has proposed in the city’s budget was for the further development and application of Web3.

Translated, Chan wrote that for “Web3 to steadily take the road of innovative development” Hong Kong will “adopt a strategy that emphasizes both ‘proper regulation’ and ‘promoting development.'”

Chan says the region also plans to focus on financial security, preventing systemic risks and focus on investor education, protection and measures around anti-money laundering.

*Paul Chan appearing via Zoom to deliver opening remarks for a Hong Kong FinTech conference. Source: Twitter*

In October last year, the government of Hong Kong floated the idea of introducing a bill to regulate crypto.

By Feb. 20 of this year, Hong Kong’s Securities and Futures Commission (SFC), the local securities regulator, released a proposal for a regime for cryptocurrency exchanges set to take effect in June.

The industry has been suffering a savage bear market and setbacks with exchange collapses and ongoing scrutiny from regulators.

According to Chan the industry is simply going through the same process as the Internet in the early 2000s, and after the “bursting of the bubble,” market participants became much calmer.

“After the tide of speculation ebbs, the remaining powerful players will focus more on competing in technological innovation, practical application and value creation, and contribute to improving the quality of the real economy,” Chan wrote.

“In the next stage, market participants need to develop blockchain technology more deeply, so that its characteristics and advantages of transparency, efficiency, security, disintermediation, de-platformization, and low cost can find wider application scenarios and solve more existing problems.”

Hong Kong’s approach to crypto regulation greatly contrasts that of the United States, which has adopted a more hardline response that’s led to speculation that the crypto industry’s “center of gravity” will shift to Hong Kong.

Cryptocurrency exchange Gate.io has already announced plans to launch a presence in Hong Kong following the local government’s planned 50 million Hong Kong dollar ($6.4 million) cash injection into Web3 in the city’s 2023-24 budget.

In a March 20 speech in Hong Kong, the secretary for financial services and the treasury, Christian Hui, stated that Hong Kong has been attracting “interest” from various crypto firms worldwide since October 2022.

“The road of innovation and technological change has never been smooth sailing,” Chan said in his latest post.

“Even if the development direction is locked, the actual path has to be worked out step by step; only by persisting in trying can we find new solutions and new ways out,” he added.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime