Hong Kong lays out the pink carpet for crypto exchanges
While some jurisdictions (cough: America) have adopted a regulation-by-enforcement method towards crypto, others are doing the alternative. According to a June 15 report from the Financial Times, the Hong Kong Monetary Authority is pressuring main monetary establishments to just accept crypto purchasers. But it’s not simply regulators laying down a pink carpet to spice up the particular administrative area’s Web3 business. For instance, Johnny Ng Kit-Chong, a member of the Legislative Council of Hong Kong, wrote on June 10:
“There have been a variety of information about worldwide digital asset exchanges prior to now two days. I ship forth an invite to welcome world digital asset exchanges, together with @coinbase, to come back to Hong Kong, apply for a compliant trade, and negotiate a list plan. I’m keen to supply help!”
Similarly, Joseph Chan Ho Lim, Hong Kong’s under-secretary for monetary providers and the treasury, revealed in an interview that the Hong Kong Monetary Authority has performed public consultations on the launch of stablecoins and is within the course of of building a regulatory framework by the tip of the 12 months. “Hong Kong will proceed to help the event of the business sooner or later and welcomes the business and abilities to come back to the SAR,” the politician stated.
The Hong Kong Web3 Festival gallery corridor (Twitter)
On June 1, Hong Kong Securities Regulatory Commission issued rules stipulating the necessities for cryptocurrency exchanges to use for a license to function in Hong Kong. For regulated buying and selling platforms, a license software have to be submitted to the Securities Regulatory Commission inside 9 months, or earlier than Feb. 29, 2024. If not, their enterprise in Hong Kong have to be terminated earlier than May 31, 2024.
Bank of China mints debt notes on Ethereum
On June 12, BOCI, the funding 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 transfer is reportedly the primary act of a Chinese monetary establishment tokenizing a safety in Hong Kong. The notes are ruled by each Hong Kong and Swiss legislation as per their origination by the Swiss funding financial institution UBS. Ying Wang, the deputy CEO at BOCI, commented:
“Working along with UBS, we’re driving the simplification of digital asset markets and merchandise, for patrons in Asia Pacific by way of the event of blockchain-based digital structured merchandise. We are inspired by the evolution of Hong Kong’s digital financial system and are dedicated to selling the digital transformation.”
Previously, UBS had issued a $50 million tokenized fixed-rate notice in December 2022. Meanwhile, the federal government of Hong Kong issued an 800 million Hong Kong greenback ($100 million) tokenized inexperienced bond on Feb. 16, underwritten by 4 banks and priced with a yield of 4.05% each year.
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 monetary officer Han Chang Joon again to jail pending extradition proceedings to South Korea for prices referring to their position within the $40 billion collapse of the Terra Luna ecosystem.
Earlier this month, Kwon and Joon had been launched on 400,000 euros bail every of their ongoing passport fraud case after a Montenegrin Basic Court dismissed an attraction by prosecutors.
Their transient interval out on bail was not a contented time both. During their respite from jail, South Korean prosecutors introduced they’d apply to freeze Kwon and associates’ $13 million held in Swiss financial institution accounts. A brand new listening to on prices of falsifying paperwork is scheduled for June 16 in the identical Basic Court.
Do Kwon faces a protracted stretch in jail in quite a lot of international locations.
According to native sources, Kwon and Joon will likely be detained for a interval of six months because the courtroom decides on their extradition case. Kwon and Joon additionally face extradition to the U.S. on 11 prices referring to fraud, breach of belief, and embezzlement.
And if that wasn’t sufficient, there may be yet one more authorized continuing in opposition to Kwon. On June 16, Kwon will likely be questioned by the Special State Prosecutor’s Office for a letter he despatched from detention to authorities officers, disclosing his connections with the chief of the Europe Now Movement (PES), Milojko Spajić.
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According to the nation’s National Security Council, Kwon and Spajić have been buddies for 5 years, and final met in Belgrade in December 2022. Investigators declare there may be proof of financing the PES marketing campaign from Kwon’s laptop computer. If convicted, Kwon not solely faces additional jail time in Montenegro however might additionally serve as much as 40 years in a South Korean jail, and much more jail time doubtlessly awaits within the U.S.
Korean blockchain agency’s daisy chain contagion
On June 14, South Korean yield platform Haru Invest filed a legal criticism in opposition to its consignment operator, B&S Holdings, alleging “fraudulently supplied administration reviews containing false data.”
Haru had paused deposits and withdrawals the day earlier than, stating, “We have found by way of our inside inspection course of that sure data supplied by a consignment operator was suspected to be false.” Previously, involved traders took photos of allegedly empty company workplaces and accused the agency of orchestrating a “rug pull,” which Haru says is inaccurate.
Photo allegedly displaying empty Haru Invest company workplaces after the announcement. (Telegram)
The transfer instantly affected South Korean Bitcoin lending agency Delio, which shortly introduced the momentary suspension of buyer withdrawals “with the intention to safely shield the belongings of consumers at the moment in custody,” citing points at Haru Invest. Delio is without doubt 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 different altcoins.
A curious commentary relating to the matter got here from Jun Du, the co-founder of cryptocurrency trade Huobi Global, who wrote:
“With the detonation of Delio, the thundering of [crypto] lending platforms is mainly over.”
However, Du warned that contagion associated to centralized buying and selling platforms, which began with FTX, is only the start. “Not solely the newcomers are confused, but in addition the OGs within the business. When will the thundering of the black field of centralized crypto entities finish?” the previous blockchain government requested, whereas additionally expressing his doubts on whether or not the business will witness a “hunch” or be “ushered into a brand new bull market” after such points are resolved.
Last 12 months, Huobi co-founders Jun Du and Leon Li reportedly bought 100% of their stake within the trade to an entity managed by Chinese blockchain character and Tron founder Justin Sun. The latter claims that the trade is now worthwhile after a interval of reorganization, which by the way in which, included crushing an worker revolt.
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Zhiyuan Sun is a journalist at Cointelegraph specializing in technology-related information. He has a number of years of expertise writing for main monetary media shops corresponding to The Motley Fool, Nasdaq.com and Seeking Alpha.