The cryptocurrency exchange HashKey, which is the first licensed virtual asset provider in Hong Kong, is set to open its doors for retail trading on August 28. This development comes with investment limits imposed on users, allowing them to invest only up to 30% of their net worth into cryptocurrencies when using the platform. To ensure risk control, a warning will be displayed if the limit is exceeded. However, it is important to note that the exchange cannot validate users’ net worth, and the limit is largely based on self-verification of assets. Additionally, HashKey will assess users’ investment background through information submitted during know-your-customer verification, restricting beginners in what they can purchase. At the initial launch, the exchange will only support trading of Bitcoin (BTC) and Ether (ETH), as the Hong Kong Securities and Futures Commission has yet to approve margin trading of crypto products and crypto derivatives among regulated exchanges.
China has recently taken steps to eliminate private blockchain firms, regardless of the consequences. This move seems to be motivated by the increase in the use of cryptocurrencies as a means of capital flight during economic downturns. According to local media reports, blockchain projects in China are being targeted, with third-party tracking firms tipping off the police on undercover crypto projects. These tracking firms stand to make millions or even hundreds of millions of dollars in commission if their reports result in arrest and asset forfeiture. Once arrested, crypto executives are allegedly coerced into handing over private keys and access to servers. The police then collaborate with third-party payment processors to exchange the seized coins and tokens for Chinese Yuan. Subsequently, the crypto executives are charged with operating illegal schemes such as multi-level marketing or money laundering, leading to the seizure of all protocol-related assets by the state. This crackdown has resulted in the termination of several protocols, leaving non-Chinese users with funds stuck on these platforms and prompting a wave of emigration among Chinese Web3 founders.
Despite the strict crackdown on private crypto activities, government-led blockchain efforts in China are thriving. On August 18, the first digital yuan central bank digital currency (e-CNY CBDC) green bond was issued, amounting to 100 million Chinese Yuan ($14 million). This bond will be used to finance a solar panel facility expansion project in Wuxi. The e-CNY CBDC has been promoted as a means of stimulating domestic spending, and the City of Tianjin alone has witnessed transaction volumes surpassing $17.5 billion in the first half of 2023, with over 302,000 merchants accepting the CBDC as a means of payment.
The U.S. Federal Bureau of Investigation (FBI) recently announced the identification of 1,580 BTC ($41 million) stolen by North Korean hackers from various projects. The FBI has warned private entities to be vigilant in guarding against transactions associated with the identified wallets. The stolen funds include money from the Alphapo hack, CoinsPaid theft, and Atomic Wallet breach, all occurring in June. The FBI believes that North Korea will attempt to cash out the stolen funds. Investigations into the role of North Korean hackers in past exploits are still ongoing.
Yi Xiao, a former vice chairman of the Jiangxi Provincial Political Consultative Conference Party Group, has been sentenced to life in prison by the Hangzhou Intermediate People’s Court for corruption and abuse of power in a Bitcoin mining enterprise. Xiao operated a $329 million Bitcoin mining enterprise from 2017 to 2021, accumulating over 160,000 Bitcoin miners despite knowing about the ban on cryptocurrencies. Xiao used his public office to secure preferential subsidies, capital, and electricity supply for the mining operation, even fabricating statistical reports to conceal its true nature.
The launch of retail trading on HashKey in Hong Kong with investment limits is an important development in the crypto market. China’s crackdown on private blockchain firms and the thriving government-led blockchain efforts demonstrate the country’s complex approach toward cryptocurrencies. The identification of stolen BTC by North Korean hackers and the sentencing of a former Chinese official for a Bitcoin mining enterprise reflect ongoing challenges in the crypto industry.
Leave a Reply