Tencent’s AI leviathan, $83M scam busted, China’s influencer ban: Asia Express
Our weekly roundup of news from East Asia curates the industry’s most important developments.
$500B firm partners with Polygon
South Korea’s Mirae Asset Security Token Working Group, with over $500 billion in assets under management (AUM), is collaborating with Ethereum layer-two scaling solution Polygon (MATIC) for security tokenization initiatives.
According to a Sept. 7 press release, Mirae Asset Securities has signed a memorandum of understanding with Polygon Labs for “helping domestic and international tokenized securities networks.”
“Mirae’s foray into tokenization will undoubtedly help accelerate the mass adoption of web3 among other financial institutions,” commented Polygon Labs’ executive chairman Sandeep Nailwal.
Meanwhile, Ahn In-sung, head of the digital division at Mirae Asset Securities, wrote: “Through technical collaboration with Polygon Labs, Mirae Asset Securities aims to establish global leadership in the field of tokenized securities.”
Previously, Polygon Labs partnered with the Monetary Authority of Singapore (MAS) and key financial institutions in its Project Garden asset tokenization initiative. Last November, Project Guardian executed foreign exchange and sovereign bond transactions via Polygon.
Tencent launches the largest LLM model ever
Tencent’s new Hunyuan Large Language Model (LLM) has over 2 trillion parameters. Previously, the largest LLMs have contained upwards of 175 billion training data parameters.
During the Chinese IT conglomerate’s Global Digital Ecology Conference on Sept. 7, Tencent unveiled its Hunyuan AI competitor to ChatGPT which is now available through Tencent Cloud. Users are able to directly connect their software APIs to Hunyuan, or use it as a basis for a variety of applications in mechatronics, customer service and enterprise operations.
Tencent claims that Hunyuan is capable of processing “tens of trillions” of data per day and can reduce risk analysis procedures in automobile manufacturing from four hours to less than 30 minutes. The company has invested a combined $31.4 billion into cloud and AI research and development within the past five years. The firm wrote:
“In response to the problem that large models are prone to ‘babbling nonsense,’ Tencent has optimized the pre-training algorithm and strategy, reducing the illusion of the mixed-element large model by 30% to 50% compared with mainstream open source large models.”
Coinbase introduces stricter KYC measures for Singaporean customers
Singaporean clients of cryptocurrency exchange Coinbase must now provide know-your-customer information (KYC) when sending crypto to addresses other than Coinbase.
In accordance with MAS regulations, Coinbase’s Singaporean customers will need to provide info on recipients’ wallet type, counterparty exchange name, full name and country of residence when sending crypto off the exchange. In addition, users who receive external crypto on Coinbase will need to provide similar KYC information on the sender in order to access their deposits.
The new KYC checks will not affect transfers between Coinbase accounts. MAS’ anti-money laundering requirements for digital asset transactions took effect in January 2020 and were last revised in March 2022. It’s not immediately clear as to why the exchange only implemented the regulations just now.
Government officials in China’s Shangdong Province have set key performance indicators (KPIs) for local bureaucrats to expand the province’s metaverse industry to 15 billion Yuan ($2.05 billion) by 2025, or for a cyclically adjusted growth rate of 15% per annum. In addition, the KPIs include the incubation of 100 metaverse ecosystem projects, 3,000 metaverse-related patents, and at least 30 metaverse experiences at public service centers. The Shangdong People’s Government wrote:
“[It is necessary to] build a Shandong cultural dedicated network, Shandong cultural big data center and cultural database to form a cultural tourism metaverse big data system. Focus on cultural tourism resources such as A-level tourist attractions, cultural centers, libraries, and museums, and develop a number of immersive tourism service products such as VR [Virtual Reality] cloud tours.”
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80 Chinese crypto influencer accounts banned
Sina Weibo, one of China’s largest social media platforms with over 580 million monthly active users, has banned 80 Chinese crypto influencer accounts with a combined follower count of over 8 million.
According to a Sept. 5 announcement, the accounts were banned due to “promotion of crypto trading activities” in accordance with eight legislations that together form China’s “Crypto Ban,” which has been in force since August 2021. One user commented:
“Even more [crypto] groups have been removed. A large part of those who were with me six years ago have now removed as well. Those who have not been removed have also been greatly restricted. Please go and promote them on Twitter. Weibo is no longer a good environment.
Though the Crypto Ban has been in effect for some time, China has only taken a harsh stance on enforcement starting this year. It has resulted in the removal of criminal enterprises, legitimate projects, and caused collateral damages to foreign investors alike.
$83M crypto scam group busted in South Korea
South Korean police have busted a 110 billion Won ($83 million) crypto scam.
Authorities say that on Sept. 5, 22 individuals were arrested on charges of deception and fraud. The unnamed group, accused of orchestrating a Ponzi scheme, allegedly solicited $83 million from 6,610 individuals based on promises of investment returns in the crypto markets as high as 300%.
An investigation subsequently revealed that business entities created by the group advocating token listings and entry into digital asset exchanges were falsified. Local news reported that assets linked to the unnamed group have been seized in criminal proceedings. A police official wrote:
“We will strictly respond to various financial crimes that infringe upon the people’s livelihood by exploiting the desperate psychology of ordinary people who want to improve economic conditions and the virtual asset investment craze.”
OKX in final stages of licensing in Hong Kong
According to local news reports on Sept. 3, cryptocurrency exchange OKX is in the advanced stages of receiving its virtual asset provider license from Hong Kong regulators. Zhikai Lai, the firm’s CCO, said that he expects OKX to receive the regulatory license by June 2024 and hopes to attract anywhere between 100,000 to 200,000 retail Hong Kong crypto investors within the first year. The executive noted:
“Banks have held a conservative attitude towards the virtual currency industry for many years. It was not until the government promoted Hong Kong as a global virtual asset center last year, and the Securities and Future Commission and the Hong Kong Monetary Authority gave a clear message that banks were required to prepare resources to focus on the industry. After that, their attitude became positive.”
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Rachel Reeves has refused to rule out breaking her manifesto pledge not to raise certain taxes, as she lays the groundwork ahead of the budget later this month.
Asked directly by our political editor Beth Rigby if she stands by her promises not to raise income tax, national insurance or VAT, the chancellor declined to do so.
She told Rigby: “Your viewers can see the challenges that we face, the challenges that are on [sic] a global nature. And they can also see the challenges in the long-term performance of our economy.”
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She went on: “As chancellor, I have to face the world as it is, not the world as I want it to be. And when challenges come our way, the only question is how to respond to them, not whether to respond or not.
“As I respond at the budget on 26 November, my focus will be on getting NHS waiting lists down, getting the cost of living down and also getting the national debt down.”
‘Each of us must do our bit’
Ms Reeves’s comments to Rigby came after a highly unusual pre-budget speech in Downing Street in which she set out the scale of the international and domestic “challenges” facing the government.
She also hinted at tax rises, saying: “If we are to build the future of Britain together, each of us must do our bit for the security of our country and the brightness of its future.”
Despite her promise that last year’s budget – which was the biggest tax-raising fiscal event since 1993 – was a “once in a parliament event,” the chancellor said that in the past year, “the world has thrown even more challenges our way,” pointing to “the continual threat of tariffs” from the United States, inflation that has been “too slow to come down,” “volatile” supply chains leading to higher prices, and the high cost of government borrowing.
She also put the blame squarely on previous Tory governments, accusing them of “years of economic mismanagement” that has “limited our country’s potential,” and said past administrations prioritised “political convenience” over “economic imperative”.
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Sky’s Beth Rigby said there will be ‘almighty backlash’ after budget, as chancellor failed to rule out breaking tax pledges.
Ms Reeves painted a picture of devastation following the years of austerity in the wake of the financial crisis, “instability and indecision” after that, and then the consequences of what she called “a rushed and ill-conceived Brexit”.
“This isn’t about re-litigating old choices – it’s about being honest with the people, about the consequences that those choices have had,” she said.
‘I don’t expect anyone to be satisfied with growth so far’
The chancellor defended her personal record in office so far, saying interest rates and NHS waiting lists have fallen, while investment in the UK is rising, and added: “Our growth was the fastest in the G7 in the first half of this year. I don’t expect anyone to be satisfied with growth of 1%. I am not, and I know that there is more to do.”
Amid that backdrop, Ms Reeves set out her three priorities for the budget: “Protecting our NHS, reducing our national debt, and improving the cost of living.”
Cutting inflation will also be a key aim in her announcements later this month, and “creating the conditions that [see] interest rate cuts to support economic growth and improve the cost of living”.
She rejected calls from some Labour MPs to relax her fiscal rules, reiterating that they are “ironclad,” and arguing that the national debt – which stands at £2.6trn, or 94% of GDP – must come down in order to reduce the cost of government borrowing and spend less public money on interest payments to invest in “the public services essential to both a decent society and a strong economy”.
She also put them on notice that cuts to welfare remain on the government’s agenda, despite its humiliating U-turn on cuts to personal independence payments for disabled people earlier this year, saying: “There is nothing progressive about refusing to reform a system that is leaving one in eight young people out of education or employment.”
Chancellor Rachel Reeves delivered a highly unusual pre-budget speech from Downing Street. Pic: PA
And the chancellor had a few words for her political opponents, saying the Tories’ plan for £47bn in cuts would have “devastating consequences for our public services,” and mocked the Reform UK leadership of Kent County Council for exploring local tax rises instead of cuts, as promised.
Concluding her speech, Ms Reeves vowed not to “repeat those mistakes” of the past by backtracking on investments, and said: “We were elected to break with the cycle of decline, and this government is determined to see that through.”
‘Reeves made all the wrong choices’
In response to her speech, Conservative shadow chancellor Sir Mel Stride wrote on X that “all she’s done is confirm the fears of households and businesses – that tax rises are coming”.
He wrote: “The chancellor claims she fixed the public finances last year. If that was true, she would not be rolling the pitch for more tax rises and broken promises. The reality is, she fiddled the fiscal rules so she could borrow hundreds of billions more.
“Every time the numbers don’t add up, Reeves blames someone else. But this is about choices – and she made all the wrong ones. If Rachel Reeves had the backbone to get control of government spending – including the welfare bill – she wouldn’t need to raise taxes.”
He called for her to resign if she raises taxes.
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