Asia Express – Recent Developments in East Asian Crypto Markets

1:19 am
December 1, 2023
Featured image for “Asia Express – Recent Developments in East Asian Crypto Markets”

This article provides a roundup of the latest news and updates from the East Asian cryptocurrency markets, covering important industry developments.

Yet another cryptocurrency scandal surfaces in Hong Kong

In a recent incident, scammers posing as investment experts managed to lure 145 victims into depositing $18.9 million into the unlicensed Hong Kong-based crypto exchange, Hounax. These individuals were promised up to 40% annual returns with no risks on their investments. However, once the funds were deposited, the victims were unable to withdraw them. This marks the second cryptocurrency scandal involving an unlicensed exchange in Hong Kong in recent months. Despite these scandals, Hong Kong regulators remain resolute in their commitment to establish the city as a significant Web3 hub. While a grace period for crypto exchanges to operate without registration is set to end in June 2024, the Securities & Futures Exchange (SFC) of Hong Kong stated its intention to legitimize initial coin offerings (ICOs) to boost revenue for the national budget.

Hounax exchange ad

An ad from the now-defunct Hounax exchange. (Medium)

In other news, financial institutions Interactive Brokers and Victory Securities have announced that they obtained crypto licenses in Hong Kong, with Interactive Brokers partnering with licensed crypto exchange OSL to offer Bitcoin and Ethereum trading services to its clients. Additionally, the Hong Kong Monetary Authority has revealed plans for a multinational effort to create a cross-chain bridge for China’s digital yuan central bank digital currency (e-CNY CBDC), named “mBridge,” aimed at reducing transaction fees and improving cross-border transactions between Mainland China and Hong Kong.

Foreign banks participate in e-CNY pilot testing

Standard Chartered, HSBC, Hang Seng Bank, and Taiwan-based Fubon Bank have initiated testing of the digital yuan for cross-border transactions. The banks will also integrate e-CNY transfer services for their clients, enabling them to deposit and withdraw e-CNY. Reports indicate a 35% year-on-year increase in the use of the digital yuan for transactions, reaching $1.39 trillion in the first three quarters of 2023. Furthermore, the first-ever e-CNY student loans were issued in Suzhou province, with 13 recipients receiving loans directly into their digital wallets.

e-CNY supported banks

List of banks supported by the e-CNY app. (Baidu)

HTX exchange resumes operations after a cyber attack

HTX exchange, previously known as Huobi Global, has reopened deposits and withdrawals following a hot wallet hack that resulted in the loss of $30 million. The exchange has assured users of full compensation for the losses and declared the safety of user funds. Additionally, the exchange announced a special airdrop in December to reward loyal users. However, this incident was the fourth exploit involving the HTX ecosystem within the past two months, reflecting security challenges within the platform.

Justin Sun at HTX exchange

Justin Sun, de-facto owner of the HTX exchange. (Twitter)

FAQs

What is the latest crypto scandal in Hong Kong?

The latest scandal involves scammers posing as investment experts who lured 145 victims to deposit $18.9 million into the unlicensed Hong Kong crypto exchange, Hounax, with promises of high returns and no risks. Once the funds were deposited, victims were unable to withdraw them.

Which banks are participating in the e-CNY pilot testing?

Standard Chartered, HSBC, Hang Seng Bank, and Taiwan-based Fubon Bank are participating in the testing of China’s digital yuan for cross-border transactions.

What security incidents have occurred within the HTX ecosystem?

Within the past two months, the HTX ecosystem experienced four security incidents, including a hot wallet hack, reflecting security challenges within the platform.


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