 |
Our weekly roundup of news from East Asia curates the industry’s most important developments.
Hong Kong regulators consider adding staking to spot Ether ETFs
Hong Kong regulators are considering allowing crypto ETF issuers in the East Asian city to stake their custodied Ether. According to reports, talks for greenlighting ETH staking are currently ongoing, and there is no clear deadline for a decision. If approved, staking on the Ethereum network would allow issuers to earn a yield of up to 3.6% per annum by validating transactions.
But since their launch on April 30, Hong Kong spot Ether ETFs haveseen little tonotraction.Three funds have just $44.9 million in custody, with net outflows of $2.2 million. On certain days, the Ether ETFs experienced no inflows whatsoever. Fee-wise, the spot crypto ETFS charge upwards of 1% per annum, compared to less than 0.30% for their U.S. counterparts.
Worldcoin reprimanded in Hong Kong
OpenAI CEO Sam Altman’s flagship crypto project, Worldcoin, has been sanctioned in Hong Kong due to alleged privacy violations.
According to local reports citing the Office of the Privacy Commissioner for Personal Data, authorities have requested Worldcoin to cease collecting data of local residents from the firm’s iris scanning devices.
Investigators alleged thatprior toscanning their biometrics, participantswere not properly informedaboutthe collection oftheir private data, which would “be retained for up to 10 years to train the artificial intelligence model for the identity verification process.”
In response, Worldcoin has stated that the firm “doesn’t seek to know, share or profit from a person’s identity or personal information, only to verify that they are human and unique.”
Over 10 million users worldwide have signed up for Worldcoin since its launch in June 2023. Users who scan their irises can receive the WLD token as an incentive.
Women take charge of world’s largest crypto exchanges
Binance co-founder Yi He and Bitget CEO Gracy Chen, both former Chinese television hosts, currently run the world’s largest crypto exchanges, facilitating $36.5 billion and $4 billion in spot trading volumes, respectively.
Chen, formerlyBitget’smanaging director, announced her promotion to CEO on Tuesday. “I’m beyond grateful to be on this journey with every one of you,” she wrote. “Let’s roll up our sleeves, dream big, and make some magic happen!”
Chen described how, at 18, she received a scholarship to study applied mathematics in Singapore and became a television host for a Chinese finance and technology program upon graduation. There, she learned about Bitcoin (BTC) from her interviewees in 2015, back when it cost $300 apiece:
“I began by reading the Bitcoin white paper and was instantly hooked. As a mathematician, I loved the mathematical beauty of it. I was excited by how democratic the system was. Mostly, I was drawn to the way it established a new decentralized ledger that complements the traditional centralized financial industry.”
She is now at the helm of the Bitget exchange, running a staff totaling more than 1,500. Meanwhile, Binance’s Yi He — a bridesmaidat Chen’s wedding — has a similar story, starting her humble journey in crypto in 2013 when Bitcoin was still trading at $1,100.
Yi He met Star Xu, founder of Okcoin (now OKX exchange), who was looking for a well-known influencer to promote the brand. Having made a small fortune from the Chinese stock bull market in 2006 to 2008, He became interested in the crypto space and accepted an offer to become the vice president of OKcoin.
During this time, He met her future spouse, Changpeng “CZ” Zhao, who became its chief technology officer.After a brief fallout with Okcoin, He and CZ joined hand in hand together to found the Binance exchange in 2017.CZ is no longer involved in Binance’s decision-making or operations due to some legal unpleasantness. He and current CEO Richard Teng have since taken the reins, frequently sharing their outlook on the future of the crypto industry.
Boyaa Interactive’s crypto bet paysoff
On May 16, Asia Express reported that Hong Kong gaming firm Boyaa Interactive anticipated its profits from Q1 would soar twelvefold. The company has invested $100 million of its corporate funds into crypto and plans to invest $100 million more. The official results have been released and show that the firm recorded a profit of $48.67 million on its digital asset holdings in Q1, which is more than triple the company’s gaming revenue during the same period.
The crypto riches appear to have enticed the company into shifting into Web3 gaming as well, writing:
“In particular, the operation model of Web3 game products has been intensively cultivated in terms of product refinement and operation diversification to create high-quality chess and card game products.”
In the past year, the company’s stock, listed on the Hong Kong Stock Exchange, has gained over 325%, reflecting its crypto profits. At the time of publication, shares traded at $0.28 apiece.
Another Hong Kong firm joins the crypto FOMO
Inkeverse Group Limited, a Hong Kong entertainment streaming group, will follow in the footsteps of Boyaa Interactive and invest up to $100 million of its corporate funds into cryptocurrencies. “The Board believes in the potential of cryptocurrencies and the impact of investing cryptocurrencies on the Group’s Web3.0 business development strategy and asset allocation strategy,” its staff wrote.
The company’s initial allocation plan involves $60 million in Bitcoin, $20 million in Ether, and $20 million in USD Coin. In supporting its decision, Inkeverse praised both Bitcoin’s “tremendous growth potential”andEthereum’s“development of layer-2 solutions”and said that “investing in multiple cryptocurrencies reduces the risk associated with the volatility of any single cryptocurrency.”Once finalized, Inkeverse will purchase the cryptocurrencies on the open market through regulated platforms such as HashKey and OSL Exchange.
OSL Exchange joins MSCI Hong Kong Index
Local crypto exchange OSL on May 22 became the first crypto firm in Hong Kong to join the MSCI Hong Kong’s market-cap weighted index, which is composed of 30 constituents.
“As business expands and the company attracts rising investor interest, we anticipate inclusion in more equity indices,”commented Patrick Pan,chairman of the board and CEO of OSL.The MSCI Hong Kong Indexis usedby its namesake, the iShares MSCI Hong Kong ETF, to track the performance of its underlying companies.
Formerly BC Technology Group, the firm changed its name this year to that of its crypto exchange subsidiary to better reflect its digital asset business. Over the past year, shares have soared over 170% as it became the first pair of licensed crypto exchanges in Hong Kong alongside HashKey Exchange.
SEC sues Do Kwon, Paxos ready to litigate, SBF’s VPN: Hodler’s Digest, Feb. 12-18
Top Stories This Week Paxos ‘categorically disagrees’ with the SEC that BUSD is a security The United States Securities and Exchange Commission (SEC) has defined the stablecoin Binance USD (BUSD) as a security in a Wells Notice sent to its issuer, Paxos Trust Company. The SEC alleges the organization failed to register BUSD under federal […]
Read more
SEC ‘backed into a corner,’ IRS tracks crypto trades, and Mickey Mouse NFTs: Hodler’s Digest, Dec 31 – Jan 6
The SEC is backed into a corner on Bitcoin ETF approval, the IRS has new rules for crypto transactions in 2024, and the original version of the Mickey Mouse mascot trends as NFT.
Read moreRipple says SEC lawsuit ‘over,’ Trump at DAS, and more: Hodler’s Digest, March 16 – 22