Bitcoin miner gets life in prison, China offers bounties for crypto firms: Asia Express
Our weekly roundup of news from East Asia curates the industry’s most important developments.
HashKey Hong Kong to commence retail trading
Crypto exchange HashKey, the first licensed virtual asset provider in Hong Kong, will open its doors to residents for retail trading on August 28.
According to local news reports, investors will only be allowed to invest up to 30% of their net worth into cryptocurrencies when using the platform. A risk control warning will be displayed if the limit is exceeded. However, Xiaoqi Weng, COO of HashKey, mentioned that the exchange “cannot validate users’ net worth,” and the limit is largely based on “self-verification” of assets.
Weng also disclosed that the exchange will assess users’ investment background based on information submitted during know-your-customer verification. “[Investment] Beginners are limited in what they can purchase,” said Weng.
At its debut, users can only trade Bitcoin (BTC) and Ether (ETH) on HashKey Hong Kong. The Hong Kong Securities and Futures Commission has not yet allowed margin trading of crypto products, nor crypto derivatives, among regulated exchanges, Weng noted.
Dark side of China’s crypto crackdown
It appears China no longer wants any private blockchain firms operating within its borders and is on the warpath to get rid of them, no matter the consequences. The move comes amidst an increase in using crypto as a means of capital flight in an economic downturn.
Local media reports suggest that, legitimate or not, blockchain projects in China have literal bounties on their heads. First, third-party tracking firms tip off the police on undercover crypto projects in the country; if the report leads to arrest and asset forfeiture, the tracking firm stands to make millions of dollars in commission, if not hundreds of millions of dollars, for large-scale projects such as Multichain.
Then, after arrest, crypto executives are reportedly intimidated into handing over the project’s private keys and access to servers. Police then allegedly get third-party payment processors to “dump” the coins and tokens over the counter in exchange for Chinese Yuan.
Crypto executives are then charged with operating a “multi-level marketing scheme,” “pyramid scheme,” or “money laundering.” If convicted, the charges result in the seizure of all protocol-related assets by the state.
Sources claim that a portion of the funds goes into law enforcement agency revenue. Zhengyao Liu, a senior lawyer at the Shanghai Mankuen Law Firm, wrote:
“In fact, in the past two years, the profit-seeking law enforcement in crypto-related criminal cases, especially in crypto-related MLM cases, has been the main reason people do not trust the case-handling agencies. For example, the ‘contribution’ of crypto-related criminal cases to financial fines and confiscation revenues is more than 50% higher than in previous years in the Jiangsu Province.”
The crackdown has led to the termination of several protocols this year, with little recourse for non-Chinese users with funds stuck on these platforms. Unsurprisingly, it has sparked a wave of emigration among Chinese Web3 founders, and overseas law enforcement efforts to try and recover the “stuck” funds.
e-CNY green bonds debut
Despite the draconian crackdown on private crypto activities, government-led blockchain efforts in China are doing quite well.
On August 18, the first digital yuan central bank digital currency (e-CNY CBDC) green bond was issued with a principal amount of 100 million Chinese Yuan ($14 million), a term of two years, and a coupon rate of 2.6% per annum.
Read also
Facilitated by the Bank of Ningbo, the loans will be used to finance a 1.4 gigawatt (GW) and a 1.0 GW solar panel facility expansion project in Wuxi.
The e-CNY CBDC has been repeatedly “shilled” for much of this year as a means of stimulating domestic spending amidst a financial crisis within the country. In the City of Tianjin alone, e-CNY transaction volumes have surpassed $17.5 billion in the first half of 2023, with over 302,000 merchants accepting the CBDC as a means of payment.
FBI tracks $41M in North Korean crypto
On August 22, the U.S. Federal Bureau of Investigation announced the identification of 1,580 BTC ($41 million) stolen from various projects by North Korean hackers. The six displayed wallets include funds stolen from the $60 million Alphapo hack in June, $37 million stolen from CoinsPaid in June, and $100 million stolen from Atomic Wallet in June. The FBI wrote:
“Private sector entities should examine the blockchain data associated with these addresses and be vigilant in guarding against transactions directly with, or derived from, the addresses. The FBI will continue to expose and combat the DPRK’s use of illicit activities—including cybercrime and virtual currency theft—to generate revenue for the regime.”
The agency said it believes North Korea will attempt to cash out the stolen funds. Criminal investigations into North Korean hackers’ role in the Harmony’s Horizon Bridge and Sky Mavis’ Ronin Bridge exploits last year are still ongoing.
Chinese Bitcoin mining magnate sentenced to life in prison
Yi Xiao, a former vice chairman of the Jiangxi Provincial Political Consultative Conference Party Group, has reportedly been sentenced to life in prison by the Hangzhou Intermediate People’s Court for unrelated charges of corruption and abuse of power in a Bitcoin mining enterprise.
According to local news reports on August 22, Yi Xiao operated a 2.4 billion Chinese Yuan ($329 million) Bitcoin mining enterprise under the corporate name Jiumu Group Genesis Technology from 2017 to 2021. Despite knowing about a ban on cryptocurrencies, Xiao amassed over 160,000 Bitcoin miners with other corporate executives and, at one time, 10% of the City of Fuzhou’s entire electricity consumption.
Xiao was convicted of using his public office to secure preferential subsidies, capital, and electricity supply for Jiamu Group. The former official also used his position to fabricate statistical reports to conceal the operations’ true nature.
Starting this year, China has been cracking down harshly on crypto activities amid a spree of data theft and money laundering incidences involving digital assets. Earlier this month, a Chinese national was sentenced to nine months in prison for purchasing $13,067 worth of Tether (USDT) for an acquaintance.
Subscribe
The most engaging reads in blockchain. Delivered once a
week.
A lower court ruling will stand in a case involving a Coinbase user who filed a lawsuit against the IRS after the crypto exchange turned over transaction data.
REX Shares will launch the first US staked crypto ETF this week, giving investors direct exposure to SOL with staking rewards.
The government has won a long-running legal challenge about its decision to continue allowing the sale of spare parts for F-35 fighter jets to Israel, while suspending other arms licences over concerns about international humanitarian law in Gaza.
But a key part of its case has highlighted mixed messaging about its position on the risk of genocide in Gaza – and intensified calls for ministers to publish their own assessment on the issue.
PM braced for pivotal vote – politics latest
Lawyers acting for the government told judges “the evidence available does not support a finding of genocide” and “the government assessment was that…there was no serious risk of genocide occurring”.
Therefore, they argued, continuing to supply the F-35 components did not put the UK at risk of breaching the Genocide Convention.
This assessment has never been published or justified by ministers in parliament, despite numerous questions on the issue.
Some MPs argue its very existence contrasts with the position repeatedly expressed by ministers in parliament – that the UK is unable to give a view on allegations of genocide in Gaza, because the question is one for the international courts.
For example, just last week Deputy Prime Minister Angela Rayner told PMQs “it is a long-standing principle that genocide is determined by competent international courts and not by governments”.
Please use Chrome browser for a more accessible video player
Situation in Gaza ‘utterly intolerable’
‘The UK cannot sit on our hands’
Green MP Ellie Chowns said: “The government insists only an international court can judge whether genocide is occurring in Gaza, yet have somehow also concluded there is ‘no serious risk of genocide’ in Gaza – and despite my urging, refuse to publish the risk assessments which lead to this decision.
“Full transparency on these risk assessments should not be optional; it is essential for holding the government to account and stopping further atrocity.
“While Labour tie themselves in knots contradicting each other, families are starving, hospitals lie in ruins, and children are dying.
“The UK cannot sit on our hands waiting for an international court verdict when our legal duty under the Genocide Convention compels us to prevent genocide from occurring, not merely seek justice after the fact.”
‘Why are these assessments being made?’
“This contradiction at the heart of the government’s position is stark,” said Zarah Sultana MP, an outspoken critic of Labour’s approach to the conflict in Gaza, who now sits as an independent after losing the party whip last summer.
“Ministers say it’s not for them to determine genocide, that only international courts can do so. Yet internal ‘genocide assessments’ have clearly been made and used to justify continuing arms exports to Israel.
“If they have no view, why are these assessments being made? And if they do, why refuse to share them with parliament? This Labour government, in opposition, demanded the Tories publish their assessments. Now in office, they’ve refused to do the same.”
Read more:
‘All I see is blood’
‘It felt like earthquakes’
MPs want Ukraine-style scheme for Gazans
Please use Chrome browser for a more accessible video player
Routes for Palestinians ‘restricted’
Judges at the High Court ultimately ruled the case was over such a “sensitive and political issue” it should be a matter for the government, “which is democratically accountable to parliament and ultimately to the electorate, not the court”.
Dearbhla Minogue, a senior lawyer at the Global Legal Action Network, and a solicitor for Al-Haq, the Palestinian human rights group which brought the case, said: “This should not be interpreted as an endorsement of the government, but rather a restrained approach to the separation of powers.
“The government’s disgraceful assessment that there is no risk of genocide has therefore evaded scrutiny in the courts, and as far as we know it still stands.”
Pics: Reuters
What is the government’s position?
Government lawyers argued the decision not to ban the export of F-35 parts was due to advice from Defence Secretary John Healey, who said a suspension would impact the whole F-35 programme and have a “profound impact on international peace and security”.
The UK supplies F-35 component parts as a member of an international defence programme which produces and maintains the fighter jets. As a customer of that programme, Israel can order from the pool of spare parts.
Labour MP Richard Burgon said the ruling puts the government under pressure to clarify its position.
“This court ruling is very clear: only the government and parliament can decide if F-35 fighter jet parts – that can end up in Israel – should be sold,” he said.
“So the government can no longer pass the buck: it can stop these exports, or it can be complicit in Israel’s genocide in Gaza.
“On many issues they say it’s not for the government to decide, but it’s one for the international courts. This washing of hands will no longer work.”
Please use Chrome browser for a more accessible video player
Dozens dead in Gaza after Israeli strikes
Israel has consistently rejected any allegations of genocide.
Prime Minister Benjamin Netanyahu branded a recent UN report on the issue biased and antisemitic.
“Instead of focusing on the crimes against humanity and war crimes committed by the Hamas terrorist organisation… the United Nations once again chooses to attack the state of Israel with false accusations,” he said in a statement.
Please use Chrome browser for a more accessible video player
‘Gaza disinformation campaign is deliberate’
The UK government has not responded to requests for comment over its contrasting messaging to parliament and the courts over allegations of genocide.
But in response to the judgement, a spokesperson said: “The court has upheld this government’s thorough and lawful decision-making on this matter.
“This shows that the UK operates one of the most robust export control regimes in the world. We will continue to keep our defence export licensing under careful and continual review.
“On day one of this Government, the foreign secretary ordered a review into Israel’s compliance with international humanitarian law (IHL).
“The review concluded that there was a clear risk that UK exports for the IDF (Israel Defence Forces) in the Gaza conflict might be used to commit or facilitate serious violations of IHL.
“In contrast to the last government, we took decisive action, stopping exports to the Israeli Defence Forces that might be used to commit or facilitate serious violations of international humanitarian law in Gaza.”
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike