Asia's weekly TOP10 crypto news (Dec 18 to Dec 24)

Dec 24, 2023

Author：0xMingyue

Editor：Colin Wu

1. The Mainland of China’s Weekly Summary

1.1 The People’s Bank of China’s Financial Stability Report Significantly Discusses Cryptocurrencies link

The People’s Bank of China has released the “China Financial Stability Report 2023,” dedicating a substantial section specifically to “Cryptocurrency Assets.” It emphasizes the principle of “same business, same risk, and same regulation,” outlining the need to regulate cryptocurrency assets in proportion to their risk levels. The report aims to minimize regulatory data gaps, reduce regulatory fragmentation, and eliminate regulatory arbitrage. Additionally, there is a separate section discussing the Financial Stability Board’s (FSB) approach to regulating cryptocurrency assets.

1.2 Regulations on the Administration of Online Games’ Requires the Use of Real-Name Digital RMB Wallets for Game Coin Transactions link

The National Press and Publication Administration of China has released a draft for soliciting opinions on the “Regulations on the Administration of Online Game Services,” which states that entities engaging in online game currency trading services should conduct transactions using real-name registered digital RMB wallets. They are not allowed to provide anonymous digital RMB wallet transaction services to users. The draft also emphasizes the use of technical measures to effectively supervise the transaction process. Any transactions involving suspected illegal activities must be promptly reported to relevant authorities to prevent facilitating illegal activities such as online gambling and fraud. Additionally, providing services to exchange in-game currency for legal tender is prohibited.

1.3 Ministry of Industry and Information Technology: Will Formulate a Web3.0 Development Strategy Document in Line with China’s National Conditions link

The Ministry of Industry and Information Technology (MIIT) has responded to the proposal from National Committee of the Chinese People’s Political Consultative Conference (CPPCC) member and Hong Kong legislator Dr. Johnny Ng, stating that they will formulate a Web3.0 development strategy document that aligns with China’s national conditions. The strategy aims to encourage the exploration of new business models such as Non-Fungible Tokens (NFTs) and Decentralized Applications (DApps). It also emphasizes achieving key breakthroughs in critical core technologies like cross-chain interoperability, privacy computing, and smart contracts. The MIIT will promote pilot applications of Distributed Digital Identity (DID) and establish mechanisms for data governance and transaction circulation.

1.4 Guangdong Case: Reselling USDT for Profit Deemed Illegal Forex Trading and Illegitimate Operation link

The official account of the Guangdong Provincial High People’s Court highlighted in its publication that the defendant, Mr. Chen, engaged in a transaction involving approximately 814,000 Tether (USDT) with Mr. Huang. The exchange, based on the day’s exchange rate between Chinese Yuan (CNY) and United States Dollar (USD), amounted to over CNY 5.1 million. During the return journey after renting a car, both defendants were apprehended by law enforcement officers, and the funds related to the transaction were immediately seized on the spot. In the first-instance judgment by the People’s Court of Dapu County, it was determined that the defendants, Mr. Chen and Mr. Li, utilized the guise of buying and selling virtual currencies to indirectly engage in foreign exchange transactions, demonstrating a grave offense constituting the crime of illegal business operations.

The judge expounded on the case, elucidating that the defendants used cash to acquire Tether from individual traders within the cryptocurrency community at prices lower than the market platform’s rates. Subsequently, they resold the acquired Tether at the day’s USD exchange rate, earning a profit from the price differential. According to the confessions of the main culprit in this case, he went to the extent of securing a loan from a bank, with the loan amount reaching several million CNY, to facilitate the procurement of Tether for resale and profit. Such substantial funds converted into USD through the exchange of Tether would inevitably deplete the nation’s foreign exchange reserves, impacting the macroeconomic management of the country concerning foreign exchange. Furthermore, it disrupts the exclusive legal status of the Renminbi within the domestic market, significantly interfering with the effectiveness of foreign exchange management and the stability of legitimate exchange rates. This behavior is categorized as a disguised form of foreign exchange trading and warrants punishment.

Lawyer Liu Yang, in his analytical commentary, contends that the conviction and penalty based on the crime of illegal business operations lack adequate legal grounds. Moreover, the act of buying and selling virtual digital currencies in this case does not fall within the enumerated list of illegal financial activities. Without a response from the State Administration of Foreign Exchange, the court lacks sufficient basis for rendering a judgment.

2. Securities and Futures Commission of Hong Kong: Ready to Accept Applications for Approval of Virtual Asset Spot ETFs link

The Securities and Futures Commission (SFC) of Hong Kong has issued a circular, expressing readiness to consider applications for approval, including those for funds involving virtual assets, such as Virtual Asset Spot Trading Exchange Traded Funds (Virtual Asset Spot Trading ETFs). Additionally, the SFC acknowledges that approved funds can directly invest in virtual asset tokens permitted for retail trading on compliant exchanges in Hong Kong. Furthermore, it permits the trading of virtual asset futures on traditional regulated futures exchanges.

3. Head of the Financial Supervisory Service of South Korea Expects to Visit the SEC in January Next Year to Discuss the Direction of Virtual Asset Regulation link

The Chairman of the Financial Supervisory Service of South Korea, Lee Suk-hoon, is set to visit the U.S. Securities and Exchange Commission (SEC) on a business trip in January 2024. The purpose of the visit is to share insights into the state of the virtual asset market and engage in discussions about regulatory policy directions. The expected focal point of discussions will likely revolve around the U.S. criteria for determining the security of virtual assets. Lee Suk-hoon has indicated that the security of virtual assets may become a prominent issue in the latter half of the coming year, and he plans to use this visit to proactively prepare response strategies.

4. Indonesian Vice Presidential Candidate Gibran Rakabuming Raka States Intention to Foster ‘Cryptocurrency Experts’ link

Indonesia’s President’s son and the vice-presidential candidate for 2024, Gibran Rakabuming Raka, stated at a political gathering on December 10th: “We are nurturing blockchain experts; we are nurturing cybersecurity experts, and we are also nurturing crypto experts.” Indonesia is ranked seventh in Chainalysis’ 2023 Global Cryptocurrency Adoption Index. According to recent polls, Gibran and Prabowo are leading candidates, and their interest in this industry may influence other candidates.

5. Palau Ministry of Finance Officially Launches Phase Two of the Palau Stablecoin (PSC) Program link

The Ministry of Finance of Palau has officially launched the second phase of the Palau Stablecoin (PSC) program. The second phase of the PSC program will prioritize the development of the digital ecosystem, enhance user engagement, emphasize compliance with regulatory standards, and expand the partnership with Ripple. Palau had previously stated that the first phase of the PSC was successful, with participants using PSC to make payments at local retailers by scanning QR codes with their mobile phones.

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6. Liquidator of 3AC Estimates Creditors May Recover 45.74% of Their Claims link

According to estimates by the liquidator 3AC, creditors are expected to recover 45.74% of their claims, with the initial distribution planned for the first quarter of the upcoming year. As of December 18th, the estimated value of 3AC assets is $1.16 billion, and the recognized value of distributed claims is expected to be $2.7 billion. Several litigations involving parties such as DCG, Genesis, and BlockFi (pending approval for settlement) have been resolved, contributing to an increase of approximately $292 million in reported assets.

The majority of assets held by the liquidator consist of non-liquid tokens with vesting periods, accounting for 82% of the portfolio. Only 6% of the portfolio has liquidity, including equities and investments at 6.9%, and cash at 4.8%. Among the non-liquid tokens, there are 13 types with a total calculated value of $563 million at current prices; $200 million worth of tokens is expected to be unlocked by the end of 2024.

7. Montenegro Court Reverses Approval of Do Kwon’s Extradition link

The Appeals Court in Podgorica, Montenegro, has overturned the High Court’s decision to extradite Do Kwon to South Korea or the United States. The reversal is based on procedural irregularities and lack of clarity. The case has been remanded to the High Court for reconsideration. The High Court in Podgorica, Montenegro, had previously approved the extradition of Terra founder Do Kwon to South Korea or the United States on November 24th. Do Kwon subsequently filed an appeal against the extradition decision.

8. Wemade and Whampoa Digital in Singapore Jointly Launch $100 Million Web3 Fund link

South Korean gaming company Wemade has entered into a strategic partnership with Singapore-based Whampoa Digital to jointly launch the $100 million Wemade Web3 Fund. Whampoa Digital will become an ecosystem partner for Wemade’s WEMIX PLAY Center located in the Dubai International Financial Centre (DIFC) Innovation Hub, as well as the Wemade Web3 Fund. The fund is designed to provide support for developers partnering with the WEMIX PLAY Center.

9. Hashkey: Supports Virtual Asset Deposits for Transactions Below 8000 HKD Across 24 Exchanges; Above 8000 HKD Only Supports Binance link

Hashkey, a Hong Kong-based compliant exchange, announced that starting from January 1, 2024, virtual asset deposits below 8000 HKD will be supported from 24 third-party exchanges. These exchanges include Binance, Coinbase, Kraken, BinanceUS, Bitfinex, Gemini, Bitstamp, Coincheck, OKX, Bitflyer, Bybit, Bithumb, Bitget, Upbit, Gate, Mexc, Cryptocom, OSL, Fireblocks, WhaleFin, ACE Exchange, XPert Custody, HEX TRUST (HexSafe), and BitMEX. For deposits exceeding 8000 HKD, only deposits from Binance will be accepted, and no authentication is required after the deposit is completed. Currently, retail users are only supported for BTC and ETH deposits and withdrawals.

10. DL Holdings: Applying to the Securities and Futures Commission of Hong Kong for a Virtual Asset Management License link

DL Holdings is set to launch an Artificial Intelligence (AI) family office service named DL-GPT. Additionally, DL Digital Family Office is applying for a virtual asset management license, expecting to gradually increase the allocation of virtual assets in future investment configurations, with the current allocation controlled at less than 5%. DL-GPT is expected to debut in the first quarter of next year, with an initial client asset threshold of $1 million, aiming for no asset threshold ultimately. The DL-GPT system will utilize blockchain to store client asset data, ensuring high security.

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