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.
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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.
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A fast-tracked temporary crypto regulatory framework could bolster innovation within the US crypto industry while permanent regulations are still in the works, says acting US Securities and Exchange Commission (SEC) chair Mark Uyeda.
“A time-limited, conditional exemptive relief framework for registrants and non-registrants could allow for greater innovation with blockchain technology within the United States in the near term,” Uyeda said at the SEC’s April 11 Crypto Task Force roundtable titled “Between a Block and a Hard Place: Tailoring Regulation for Crypto Trading.”
Relief measures may address immediate challenges
Uyeda said this might be the short-term answer as the SEC works toward a “long-term solution,” at the roundtable with SEC members and crypto industry executives, including Uniswap Labs’ Katherine Minarik, Cumberland DRW’s Chelsea Pizzola, and Coinbase’s Gregory Tusar.
He flagged state-by-state regulation of crypto trading as a concern, warning it could lead to a “patchwork of state licensing regimes.”
Uyeda said that a favorable federal regulatory framework would ease the burden for market participants wishing to offer tokenized securities and non-security crypto assets, allowing them to operate under a single SEC license instead of navigating “fifty different state licenses.”
He urged crypto market participants to share feedback on areas where “exemptive relief” could be appropriate.
Uyeda also reiterated the benefits of blockchain technology in financial markets during the roundtable discussion.
“Blockchain technology offers the potential to execute and clear securities transactions in ways that may be more efficient and reliable than current processes,” Uyeda said.
Uyeda to fill chair position until Atkins is sworn in
“Blockchains can be used to manage and mobilize collateral in tokenized form to increase capital efficiency and liquidity,” he added.
Uyeda will continue serving as acting SEC chair until US President Donald Trump’s nominee, Paul Atkins, is officially sworn in.
On April 10, the US Senate confirmed Atkins as chair of the SEC in a 52-44 vote largely along party lines.
Related: SEC, Ripple file joint motion to pause appeals in XRP case
Uyeda has served as acting SEC chair since Jan. 20, succeeding former chair and crypto skeptic Gary Gensler. He’s been widely seen within the industry as a pro-crypto advocate.
On March 18, Cointelegraph reported that Uyea said the SEC could change or scrap a rule proposed under the Biden administration that would tighten crypto custody standards for investment advisers.
“I have asked the SEC staff to work closely with the crypto task force to consider appropriate alternatives, including its withdrawal,” Uyeda said.
Magazine: Memecoin degeneracy is funding groundbreaking anti-aging research
Trump kills DeFi broker rule in major crypto win: Finance Redefined, April 4–11
In a significant win for decentralized finance (DeFi) protocols, US President Donald Trump overturned the Internal Revenue Service’s DeFi broker rule, which would have expanded existing reporting requirements to include DeFi platforms.
Increasing US crypto regulatory clarity will attract more tech giants to the space, requiring existing crypto projects to focus on more collaborative tokenomics to survive, according to Cardano founder Charles Hoskinson.
Trump signs resolution killing IRS DeFi broker rule
Trump signed a joint congressional resolution overturning a Biden administration-era rule that would have required DeFi protocols to report transactions to the Internal Revenue Service.
Set to take effect in 2027, the IRS DeFi broker rule would have expanded the tax authority’s existing reporting requirements to include DeFi platforms, requiring them to disclose gross proceeds from crypto sales, including information regarding taxpayers involved in the transactions.
Trump formally killed the measure by signing off on the resolution on April 10, marking the first time a crypto bill has been signed into US law, Representative Mike Carey, who backed the bill, said in a statement.
“The DeFi Broker Rule needlessly hindered American innovation, infringed on the privacy of everyday Americans, and was set to overwhelm the IRS with an overflow of new filings that it doesn’t have the infrastructure to handle during tax season,” he said.
Crypto needs collaborative tokenomics against tech giants — Hoskinson
The next generation of cryptocurrency projects must embrace a more collaborative approach to compete with major centralized tech companies entering the Web3 space, according to Cardano founder Charles Hoskinson.
Speaking at Paris Blockchain Week 2025, Hoskinson said one of the main criticisms of the crypto and DeFi space is its “circular economy,” which often means that the rally of a specific cryptocurrency is bolstered by funds exiting another token, limiting the growth of the whole industry.
Hoskinsin said that to have a chance against the centralized technology giants joining the Web3 industry, cryptocurrency projects need more collaborative tokenomics and market structure.
Hoskinson on stage at Paris Blockchain Week. Source: Cointelegraph
“The problem right now, with the way we’ve done things in the cryptocurrency space, is the tokenomics and the market structure are intrinsically adversarial. It’s sum 0,” said Hoskinson. “Instead of picking a fight, what you have to do is you have to find tokenomics and market structure that allows you to be in a cooperative equilibrium.”
He argued that the current environment often sees one crypto project’s growth come at the expense of another rather than contributing to the sector’s overall health. He added that this is not sustainable in the face of trillion-dollar firms like Apple, Google and Microsoft, which may soon join the Web3 race amid clearer US regulations.
Bitcoin’s 24/7 liquidity: Double-edged sword during global market turmoil
Bitcoin and other cryptocurrencies are often praised for offering around-the-clock trading access, but that constant availability may have contributed to a steep sell-off over the weekend following the latest US trade tariff announcement.
Unlike stocks and traditional financial instruments, Bitcoin (BTC) and other cryptocurrencies enable payments and trading opportunities 24/7 thanks to the accessibility of blockchain technology.
After a record-breaking $5 trillion was wiped from the S&P 500 over two days — the worst drop on record — Bitcoin remained above the $82,000 support level. But by Sunday, the asset had plummeted to under $75,000.
Sunday’s correction may have occurred due to Bitcoin being the only large tradable asset over the weekend, according to Lucas Outumuro, head of research at crypto intelligence platform IntoTheBlock.
“There was a bit of optimism last week that Bitcoin might be uncorrelating and fairing better than traditional stocks, but the [correction] did accelerate over the weekend,” Outumuro said during Cointelegraph’s Chainreaction live show on X, adding:
“There’s very little people can sell on a Sunday because most markets are closed. That also enables the correlation because people are panicking and Bitcoin is the largest asset they can sell over the weekend.”
Outumuro noted that Bitcoin’s weekend trading can also have upside effects, as prices often rally in calmer conditions.
Bybit recovers market share to 7% after $1.4 billion hack
Bybit’s market share rebounded to pre-hack levels following a $1.4 billion exploit in February, as the crypto exchange implemented tighter security and improved liquidity options for retail traders.
The crypto industry was rocked by the largest hack in its history on Feb. 21, when Bybit lost over $1.4 billion in liquid-staked Ether (stETH), Mantle Staked ETH (mETH) and other digital assets.
Despite the scale of the exploit, Bybit has steadily regained market share, according to an April 9 report by crypto analytics firm Block Scholes.
“Since this initial decline, Bybit has steadily regained market share as it works to repair sentiment and as volumes return to the exchange,” the report stated.
Block Scholes said Bybit’s proportional share rose from a post-hack low of 4% to about 7%, reflecting a strong and stable recovery in spot market activity and trading volumes.
Bybit’s spot volume market share as a proportion of the market share of the top 20 CEXs. Source: Block Scholes
The hack occurred amid a “broader trend of macro de-risking that began prior to the event,” which signaled that Bybit’s initial decline in trading volume was not solely due to the exploit.
Nearly 400,000 FTX users risk losing $2.5 billion in repayments
Almost 400,000 creditors of the bankrupt cryptocurrency exchange FTX risk missing out on $2.5 billion in repayments after failing to begin the mandatory Know Your Customer (KYC) verification process.
About 392,000 FTX creditors have failed to complete or at least take the first steps of the mandatory Know Your Customer verification, according to an April 2 court filing in the US Bankruptcy Court for the District of Delaware.
FTX users originally had until March 3 to begin the verification process to collect their claims.
“If a holder of a claim listed on Schedule 1 attached thereto did not commence the KYC submission process with respect to such claim on or prior to March 3, 2025, at 4:00 pm (ET) (the “KYC Commencing Deadline”), 2 such claim shall be disallowed and expunged in its entirety,” the filing states.
FTX court filing. Source: Bloomberglaw.com
The KYC deadline has since been extended to June 1, giving users another chance to verify their identity and claim eligibility. Those who fail to meet the new deadline may have their claims permanently disqualified.
According to the court documents, claims under $50,000 may account for about $655 million in disallowed repayments, while claims over $50,000 could amount to $1.9 billion, bringing the total at-risk funds to more than $2.5 billion.
DeFi market overview
According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the red.
The EOS (EOS) token fell over 23%, marking the week’s biggest decline in the top 100, followed by the Near Protocol (NEAR) token, down over 19% on the weekly chart.
Total value locked in DeFi. Source: DefiLlama
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.
Politics
This is a remarkable step by the government – and Donald Trump, China and Reform UK have all played their part
When the sun sets on Scunthorpe this Saturday, the town’s steelworks will likely have a new boss – Jonathan Reynolds.
The law that parliament will almost certainly approve this weekend hands the business secretary the powers to direct staff at British Steel, order raw materials and, crucially, keep the blast furnaces at the plant open.
This is not full nationalisation.
But it is an extraordinary step.
The Chinese firm Jingye will – on paper – remain the owner of British Steel.
But the UK state will insert itself into the corporate set-up to legally override the wishes of the multinational company.
A form of martial law invoked and applied to private enterprise.
That will come at a cost to the taxpayer.
Follow latest: Live politics updates
No number has been specified, but there are wages to pay and orders to make at a site estimated to already be losing £700,000 a day.
There is also clear frustration in government at how the Chinese owners have engaged in negotiations around modernising the Scunthorpe site.
“Jingye have not been forthright throughout this process”, said the business secretary in his department’s official announcement about the new laws.
Time is so tight because of the nature of the steel-making process.
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Inside the UK’s last blast furnaces
Once switched off, blast furnaces are very hard to turn back on.
If this had happened in Scunthorpe – as seemed likely in a matter of days – then it would have been game over.
This move keeps the show on the road and opens up more time for talks over the long-term future of the plant.
While the official line in Whitehall is that “all options are on the table”, nationalisation seems increasingly likely.
That would need more legislation, if it was done – as seems likely – without the approval of the current owner.
Finding an alternative commercial partner has not been ruled out, but one is not waiting in the wings either.
As for what that long-term future looks like, with just five years of life left in the Scunthorpe blast furnaces, modernisation is inevitable.
Port Talbot’s plant saw its blast furnaces closed last year amid a switch to the more environmentally friendly electric arc furnaces and a loss of thousands of jobs.
A general view shows British Steel’s Scunthorpe plant.
Pic Reuters
Political figures in Wales are now questioning why nationalisation wasn’t on the table for this site.
The response from government is that the deal was done by the previous Tory administration and the owners of the South Wales site agreed to the terms.
But there is also a sense that this decision over British Steel is being shaped by the domestic and international political context.
Labour came to power promising to revitalise left-behind communities and inject a sense of pride back into places still reeling from the loss of traditional industry.
With that in mind, it would be politically intolerable to see the UK’s last two blast furnaces closed and thousands of jobs lost in a relatively deprived part of the country.
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One of the two blast furnaces at British Steel’s Scunthorpe operation
Reform UK’s position of pushing for full and immediate nationalisation is also relevant, given the party is in electoral pursuit of Labour in many parts of the country where decline in manufacturing has been felt most acutely.
The geo-political situation is perhaps more pressing though.
Just look at the strength of the prime minister’s language in his Downing Street address – “our economic and national security are all on the line”.
The government’s reaction to the turmoil caused by President Donald Trump’s pronouncements on tariffs and security has been to emphasise the need to increase domestic resilience in both business and defence.
Becoming the only G7 nation unable to produce virgin steel at a time when globalisation appears to be in retreat hardly fits with that narrative.
It would also present serious practical questions about the ability of the UK to produce steel for defence and the broader switch to green energy production.
Then there is the intriguing subplot around US-China trade.
While this decision is separate from discussions with the White House on tariffs, one can imagine how a UK move to wrestle control of a site of national importance from its Chinese owner might go down with a US president currently engaged in a fierce trade war with Beijing.
This is a remarkable step from the government, but it is more a punctuation mark than a full answer.
The tension between manufacturing and decarbonisation remains, as do the challenges presented by a global economy appearing to fragment significantly.
But one thing is for sure.
As a political parable about changes to traditional industry and the challenges of globalisation, the saga of British Steel is hard to beat.
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