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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.

An recent tip-off lead to a 400 billion Yuan ($55 billion) crypto money laundering bust by Chinese police.
An recent tip-off lead to a 400 billion Yuan ($55 billion) crypto money laundering bust by Chinese police. (DouYin)

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.

The last message sent by Chinese exchange BKEX before its entire platform shut down and its staff nowhere to be found. (BKEX)

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. 

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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.

Yi Xiao awaiting sentencing on charges of corruption and abuse of power (Hangzhou Intermediate People's Court)
Yi Xiao awaiting sentencing on charges of corruption and abuse of power (Hangzhou Intermediate People’s Court)

Zhiyuan Sun

Zhiyuan Sun is a journalist at Cointelegraph focusing on technology-related news. He has several years of experience writing for major financial media outlets such as The Motley Fool, Nasdaq.com and Seeking Alpha.

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PM rejects Enoch Powell comparison after ‘island of strangers’ comment

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PM rejects Enoch Powell comparison after 'island of strangers' comment

Sir Keir Starmer has rejected the comparison to Enoch Powell after he said the UK was at risk of becoming an “island of strangers” if migration does not come down.

The prime minister’s official spokesperson said migrants have made a “massive contribution” to society but the Tories “lost control of the system” and that is the point he was making.

The remark has drawn criticism from Labour backbenchers, who have compared it to the late Conservative MP’s inflammatory 1968 “Rivers of Blood” speech.

In the speech, Mr Powell imagined a future multicultural Britain where the white population would find themselves “strangers in their own country” as a result of migration.

Among those to make the comparison was the former shadow chancellor John McDonnell, who said on X that “Talk of an “island of strangers” shockingly echoes the divisive language of Enoch Powell”.

However, the prime minister’s spokesperson said: “The PM rejects this comparison. He said that migrants have made a massive contribution to society.

“It is also right to say that between 2019 and 2024, the previous government lost control of the system. Migration needs to be controlled, fair and people that come here should integrate.”

More on Keir Starmer

Enoch Powell. Pic: PA
Image:
Enoch Powell. Pic: PA

Asked why the prime minister used such robust language, the spokesperson said he was not going to “shy away” from the issue of immigration and the British public want it to be reduced.

He added: “We have welcomed immigrants for decades, but it’s too high and must come down. Also, it’s important for our domestic skills system, which is good for our economy.”

What has the government announced?

Sir Keir made the comment at a news conference in which measures were announced to curb net migration, including banning care homes from recruiting overseas, new English language requirements for visa holders and stricter rules on gaining British citizenship.

The package is aimed at reducing the number of people coming to the UK by up to 100,000 per year, though the government has not officially set a target.

Who was Enoch Powell?

Enoch Powell was a Tory MP and the shadow defence secretary in the 1960s when a debate was raging about post-war immigration to Britain.

By the late 1960s, hundreds of thousands of Commonwealth citizens had exercised their legal right and settled in Britain, and it led to a quiet clampdown by the Labour government on immigration.

On 20 April 1968, Powell rose to his feet at a meeting of the Conservative Political Centre in Birmingham and declared Britons had “found themselves made strangers in their own country”.

Powell went on to say it had led to a shortage of hospital beds, school places, and “homes and neighbourhoods changed beyond recognition”.

He was swiftly kicked out of the shadow cabinet.

Net migration – the difference between the number of people immigrating and emigrating to a country – soared when the UK left the EU in January 2020.

It reached 903,000 in the year to June 2023 before falling to 728,000 in mid-2024. But that is still well above its pre-Brexit high of 329,000 in the year up to June 2015.

Sir Keir said parts of the UK’s economy “seem almost addicted to importing cheap labour” rather than investing in skills at home.

However, it is not clear how the government plans to boost the domestic workforce, amid a UK skills shortage and record numbers of people being out of work.

According to the ONS, there are 9.2 million people of working age in the UK who are economically inactive, including 1.8m 18-24 year olds.

The prime minister’s spokesperson said the government is “focused on upskilling British workers” and “especially helping young people in the job sector” but did not elaborate how.

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PM’s ‘tough’ migration policies explained

On care homes, he said, around 40,000 care workers came over on visas for jobs that did not exist, and companies can recruit from that pool.

Earlier, a number of Labour MPs came to the prime minister’s defence. Rother Valley MP Jake Richards said on X that Sir Keir is “absolutely right to warn of the risk of becoming an ‘island of strangers’.

“Millions of people across the country have similar concerns. This theme must be central to missions across immigration, employment, work and tackling neighbourhood deprivation,” he said.

Shadow justice secretary Robert Jenrick went further, telling Sky News he believes the UK “already is an island of strangers”, naming several areas “where we are a very divided and segregated society”.

However former Labour home secretary Lord David Blunkett criticised the rhetoric, saying in a speech at a University of Law graduation ceremony: “I never felt I lived in, or had a part to play in, a country of strangers.

“I thought welcoming people from across the world was a tribute to our society, where people want to make their homes, to build a life and their economy and to contribute to our society.

“I think we need to be kind to each other, but we need a much kinder national world as well.”

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Who PM was really trying to echo with ‘island of strangers’ speech

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Who PM was really trying to echo with 'island of strangers' speech

Sir Keir Starmer is getting used to falling out with some of his MPs over policy decisions – be it on the winter fuel allowance, his approach to the Israel-Hamas war in Gaza or welfare cuts.

But on Tuesday the prime minister found himself embroiled in a row with MPs over something entirely different – his language over immigration.

The prime minister’s argument that Britain “risked becoming an island of strangers” if immigration levels are not cut has sparked a backlash from some of his MPs, and the London mayor Sadiq Khan is alarmed that his own leader is using language similar to that of Enoch Powell.

Politics latest: Senior Labour figures distance themselves from PM’s speech

In his infamous 1968 Rivers Of Blood speech, Powell warned of a future where white people “found themselves made strangers in their own country”.

It was a speech that cost him his shadow cabinet job and made Powell one of the most divisive and controversial politicians in Britain. It is also a speech that the prime minister’s team is now frantically trying to distance itself against, with one insider telling me on Tuesday the PM’s team hadn’t realised the similarity and hadn’t intended the comparison.

The politician the prime minister was trying to channel was about as far away from Powell as you could get in the 1960s, when the debate of immigration and race relations raged. Sir Keir had wanted to echo former Labour home secretary Roy Jenkins who had always argued that immigration was good for Britain, but needed to be done at a speed the country could absorb.

Take this from Jenkins in the House of Commons in 1966: “Let there be no suggestion that immigration, in reasonable numbers, is a cross that we have to bear, and no pretence that if only those who have come could find jobs back at home our problems would be at an end.

“But it does not follow that we can absorb them without limit. We have to strike a balance. That is what we are trying to do and I feel that we have been reasonably successful in recent months. We cannot lay down absolute numerical quantities, but I think that we have struck a reasonable balance and also that in the past year we have made substantial progress towards producing a healthier atmosphere, in terms of integration, on both sides – amongst both the indigenous and the immigrant community.”

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PM’s ‘tough’ migration policies explained

One person familiar with No 10’s approach told me: “We want a more cohesive society, we are not trying to pick fights.

“But the last Conservative government let in 2.3 million immigrants [in the three years to June 2024] and during that time built about 600,000 homes. That creates competition between people and that is typically at the lower end of the market. Just issuing visas and creating a sense of an unfair system is not a way to build cohesiveness.”

If you look at polling from YouGov, it seems the prime minister is more in step with public mood than those in his party criticising him, with 41% of all voters polled on Tuesday about his “island of strangers” remarks agreeing with the sentiment and having no issue with the language.

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‘We need to reduce immigration’

But it is true too that Labour’s approach lands particularly well with Reform voters, with 61% of them supportive of the PM’s words.

Beyond the battle of language, there will be battles ahead too over whether the prime minister’s policies will help or hinder the economy.

Read more:
What are Sir Keir Starmer’s new immigration rules?

Starmer’s migration package is significant – but is it enough?

There has long been an assumption that higher net migration is positive of the economy and public finances, but there is growing concern in Number 10 that the benefits are being overstated, as it fails to take into account the additional resources needed for public services and the effect of lowering wages, which affects productivity growth – none of which is factored into the economic forecasts of the Office of Budget Responsibility.

There will be those in business that don’t like the cuts to visas. There will be those in government that will worry about the economic impact of cuts to visas – although the chancellor was on the front row for the prime minister’s speech on Monday. There will be those on the Labour left that will be uncomfortable about it.

I suspect the prime minister will be uncomfortable about the row over his language that has seen him attacked on both sides, as the left accuse him of trying to ape the far right and his opponents accuse him of being a “chameleon” for making the opposite argument on immigration when he was running for the Labour leadership in 2020.

But where his team think they are right is on the policy, and early polling suggests that voters from across the political divide broadly agree.

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SEC hacker counters prosecutors with 366-day sentencing recommendation

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SEC hacker counters prosecutors with 366-day sentencing recommendation

SEC hacker counters prosecutors with 366-day sentencing recommendation

Defense lawyers have asked a judge to sentence the person responsible for helping post a fake message announcing regulatory approval of Bitcoin exchange-traded funds to roughly a year in prison, countering prosecutors’ request for a two-year sentence.

In a May 13 filing in the US District Court for the District of Columbia, Eric Council Jr.’s legal team asked that he be sentenced to no more than one year and one day in prison following his guilty plea.

Council was part of a group that took control of the US Securities and Exchange Commission’s (SEC’s) X account in 2024 through a SIM swap attack, posting a message that suggested the regulator had approved spot Bitcoin (BTC) exchange-traded fund listings for the first time.

“A sentence of twelve months and one day serves the ends of justice,” said the May 13 filing. “It sufficiently punishes the defendant for his role in this case. It also promotes respect for the law and deters future criminal conduct.”

Washington, SEC, Hackers, Court, Crimes, SIM Swap
Eric Council Jr.’s sentencing recommendation, filed on May 13. Source: PACER

Council initially pleaded not guilty to the charges, but changed his plea to guilty in February on one count of conspiracy to commit aggravated identity theft and access device fraud. The judge overseeing the case, Amy Berman Jackson, also ordered prosecutors to “identify the felony and point to where that information can be found in the record” by May 13.

Prison sentence between 1 and 2 years?

The SEC hacker is scheduled to be sentenced on May 16. Prosecutors asked the judge to impose a two-year sentence on Council, saying he “profited through a sophisticated fraud scheme.” Court filings showed he earned roughly $50,000 through similar SIM swap attacks.

Related: ZKsync X hacker posts false SEC probe in apparent effort to crash token

Though Council’s case was likely winding down with his upcoming sentencing hearing, the DC court district could soon be under new leadership, potentially affecting the prosecution of crypto-related cases. On May 8, US President Donald Trump announced that Fox News host Jeanine Pirro would become the interim US attorney for the District of Columbia.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

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