Chinese court knocks back civil lawsuit over “illegal” crypto, Hong Kong exchanges gain momentum, The Block gets $60M from Singapore firm.
Our weekly roundup of news from East Asia curates the industrys most important developments.
Hot week for Hong Kong exchanges
Hashkey Exchange one of the first regulated crypto exchanges in Hong Kong has announced insurance coverage for clients assets stored in its hot and cold wallets. accounts. The policy will cover 50% of Hashkeys digital assets in cold wallets and 100% of digital assets in hot wallets, paying out from $50 million to $400 million in the event of a claim.
Hashkey’s partnership with fintech OneDegree will also see the pair co-develop novel crypto security solutions for the exchange to manage server downtime, data back-up, and load control. “Getting insurance cover from OneInfinity by OneDegree not only fulfills the Securities and Futures Commission requirements, we believe the collaboration can also enhance our financial, technical, and service infrastructure to provide our customers with comprehensive protection,” said Livio Wang, chief operating officer of Hashkey Group.
Wang also disclosed that the exchange plans to submit four major altcoins for listing approval to the Hong Kong Securities & Futures Commission. Since its license was approved in August, Hashkey has grown to over 120,000 customers with a cumulative trading volume surpassing $10 billion.
BC Technology Group, the owner of another licensed exchange, OSL, has announced a $91 million strategic investment from BGX crypto group. BGX CEO Patrick Pan called the investment “a strategic move that reflects our belief in the immense potential of the digital asset market.” Last month, Bloomberg reported that BC Technology Group was seeking to spin off the OSL exchange for $128 million, which the company denied at the time.
While Hong Kong crypto exchanges are gaining traction, the barrier to entry for users and token developers alike appears to be high. In an announcement on Nov. 15, Hashkey stated that token developers must pay a non-refundable application fee of $10,000 for listing their coins or tokens on the exchange.
Hashkey also warned that developers should expect a total cost of $50,000 to $300,000 for the listing process, if approved, in addition to due diligence or advisory fees.
The Block gets a fresh start
Crypto media publication The Block has received a $60 million investment for 80% of its equity from Singaporean venture capital firm Foresight Ventures but will still operate as a separate company.
As told by CEO Larry Cermak on Nov. 13, the deal “gives The Block a fresh start ahead of the bull market and provides us with more capital to build out new exciting products and expand our footprint into Asia and the Middle East.”
Forrest Bai, CEO of Foresight Ventures, told Cointelegraph that “the purchase of The Block marks a crucial milestone, substantially strengthening Foresight Ventures’ position in the cryptocurrency sector.”
The Block became embroiled in the FTX scandal last year when it came to light that former CEO Mike McCaffrey took millions of dollars in loans from FTX founder and convicted felon Sam Bankman-Fried. Much of the capital was used to buy out his shares. The Block reportedly laid off 33% of its staff due to the overall market downturn and fallout from the incident.
No civil protection for crypto in China
A third Chinese court has voided a crypto investment contract on the basis that cryptocurrencies contravene the spirit of its crypto ban and, therefore, are not protected by law, at least in civil disputes.
As narrated by the Liaoning Zhuanhe People’s Court on Nov. 14, the plaintiff, Wang Ping, lent the equivalent of $552,300 Tether (USDT) to a friend, Zhao Bin, for the purposes of investing in altcoins in 2022. The transaction resulted in heavy losses for Wang, leading them to subsequently file a lawsuit demanding the return of the principal. The defendant, Zhao, refused.
At trial, the presiding judge ruled that the plaintiff had no right to judicial relief as transactions between cryptocurrencies are classified as “illegal activity.” Therefore, all “virtual currency and related derivatives violate public order and good customs, and the relevant civil legal actions are invalid, and the resulting losses shall be borne by them.”
“Virtual currency does not have the same legal status as legal currency. Virtual currency-related business activities are illegal financial activities. It is also an illegal financial activity for overseas virtual currency exchanges to provide services to residents in my country through the internet.”
The ruling follows other precedents set by Chinese civil courts earlier this year. However, recently, the Chinese government has clarified that certain criminal acts pertaining to digital currencies, such as theft of nonfungible tokens, are prosecutable under the penal code. Chinese has enforced its crypto ban since 2021.
Philippines to issue tokenized bonds
The Philippines Bureau of Treasury (BTr) is seeking to raise the equivalent of $180 million from its domestic capital market through the issuance of tokenized bonds.
As announced on Nov. 16, the tokenized bonds are one-year fixed-rate government securities that pay semi-annual coupons offered to institutional investors starting next week. The bonds will be issued in the form of digital tokens and maintained in the BTr’s distributed ledger technology (DLT) registry. “As part of the National Governments Government Securities Digitalization Roadmap, the maiden issuance of TTBs aims to provide the proof-of-concept for the wider use of DLT in the government bond market,” the institution said.
In July, Cointelegraph reported that nonprofit The Blockchain Council of the Philippines partnered with the Department of Information and Communications Technology (DICT) to foster Web3 adoption in the Southeast Asian country. The organizations will be working to educate and collaborate with local stakeholders within the Philippine blockchain ecosystem, including government bodies, Web3 developers, and civil societies.
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