China dev fined 3 yr’s salary for VPN use, 10M e-CNY airdrop: Asia Express
Our weekly roundup of news from East Asia curates the industry’s most important developments.
Chinese worker fined $145K over VPN
An unnamed individual in China was fined 1.06 million Yuan ($144,907) for using a virtual private network (VPN) to access restricted websites as part of a remote work routine for a foreign employer.
According to local mediareportsearlier this week, during his employment as a consultant between 2019 to 2022 the unnamed individual accessed GitHub to view source code, answered questions in customer support, held teleconferences via Zoom, and posted multiple threads on Twitter with the help of a VPN.
Based on a document issued by City of Chengde Police, the individual’s income earned with the aid of a VPN was deemed as “proceeds of crime.” The police issued a penalty of $144,097, equivalent to three years of the individual’s salary.
Chinese law prohibits the use of VPNs to bypass the country’s “Great Firewall” that blocks popular sites such as Google, Wikipedia, and Facebook. The ruling has spooked many in China’s IT and Web3 circles, who often rely on VPNs for similar remote-work tasks.
City of Hangzhou airdrops 10M e-CNY
The City of Hangzhou is airdropping 10 million digital yuan central bank digital currency (e-CNY), worth a total of $1.37 million, to incentivize food and beverage spending as it hosts the 19th Asian Games.
Anyone within the municipality of Hangzhou, locals and visitors alike, can receive the e-CNY airdrop for use in food delivery platforms. Individuals can receive up to three vouchers that reimburse merchants, in e-CNY, up to 20% to 30% of the value of food items after purchase.
The airdrop will renew every five days until the balance is emptied. The vouchers, although denominated in e-CNY, are only effective for five days and can only be tendered through select food delivery platforms. Earlier this year, the City of Hangzhou airdropped 4 million e-CNY, worth $590,000, in an effort to boost the CBDC’s adoption.
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15 detained over largest alleged Ponzi scheme in Hong Kong’s history
Hong Kong police have detained 15 individuals linked to the collapse of cryptocurrency exchange JPEX.
As of September 27, Hong Kong Policeclaimthey have received over 2,392 complaints claiming a total loss of 1.5 billion Hong Kong dollars ($191.6 million) in the apparent Ponzi scheme. Since the investigation began mid-September, police say that they have seized 8 million HKD ($1 million) in cash and frozen bank accounts worth 77 million HKD ($10 million) suspected of being proceeds of crime.
On September 13, the Hong Kong Securities & Futures Commission (SFC) issued a warning regarding JPEX being an unlicensed exchange within its jurisdiction. The move led to several arrests of its key executives and the abandonment of its corporate booth in Token2049 Singapore. Prior to its collapse, JPEX was one of the most heavily marketed crypto exchanges in Hong Kong, with corporate ads displayed across the city’s metro lines and taxis.
The incident is shaping up as potentially the worst Ponzi scheme in Hong Kong’s history in terms of monetary loss. Shortly after its discovery, the SFC began publishing a list of crypto exchanges awaiting registration or are unlicensed within the special administrative region of China.
CoinEx resilient despite $70M hack
Hong Kong crypto exchange CoinEx will resume services despite falling victim to a $70 million wallet hack orchestrated by North Korea’s infamous Lazarus Group.
According to a September 22 statement, CoinEx claims to have resumed deposits and withdrawals on 190 cryptocurrencies, including Bitcoin, Ethereum, USD Coin, and Tether. The firm stated:
“The wallet system is operating safely and steadily at present. We will gradually resume deposit and withdrawal services for the remaining 500+ cryptos. Since the resuming operations will be processed frequently, there will be no further or separate announcements for each crypto.”
As part of its new wallet system, CoinEx updated the deposit addresses of all crypto assets, rendering old addresses invalid. On September 12, a leak of the exchange’s hot wallet keys led to the theft of over $70 million worth of users’ cryptos. Despite the incident, CoinEx said that cold wallets were not affected and that the CoinEx User Asset Security Foundation would “bear the financial losses from this incident.”
Multiple blockchain security firms, such as Elliptic, have pointed to North Korea’s Lazarus Group as the perpetrator of the exploit. The CoinEx team has since offered a “generous bounty” for the return of stolen funds. Prior to the hack, the exchange disclosed it had around $260 million worth of major cryptocurrencies in its proof-of-reserves report.
Alibaba moves into digital wallets
Chinese tech conglomerate Alibaba wants to launch its own wallet service.
According to the September 28 announcement, Alibaba’s Cloud subsidiary has partnered with crypto custodian Cobo to create an enterprise wallet-as-a-service solution for developers and organizations, integrating crypto wallets into software through APIs and SDKs. Cobo says it is incorporating its custodial wallet and multi-party computation technology to build the Alibaba Cloud wallet.
“This collaboration marks a significant step towards setting new standards in security, performance, and accessibility of the digital wallet infrastructure for Web3,” said Dr. Changhao Jiang, co-founder and CTO of Cobo. The firm claims to hold partnerships with over 500 institutions, with billions of digital assets in custody through its wallet solutions. In June, crypto-friendly executive Joe Tsaibecame the chairmanof Alibaba Group, replacing his predecessor Daniel Zhang.
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Former Binance CEO Changpeng “CZ” Zhao will begin advising the Kyrgyz Republic on blockchain and crypto-related regulation and tech after signing a memorandum of understanding with the country’s foreign investment agency.
“I officially and unofficially advise a few governments on their crypto regulatory frameworks and blockchain solutions for gov efficiency, expanding blockchain to more than trading,” the crypto entrepreneur said in an April 3 X post, adding that he finds this work “extremely meaningful.”
His comments came in response to an earlier X post from Kyrgyzstan President Sadyr Zhaparov announcing that Kyrgyzstan’s National Investment Agency (NIA) had signed a memorandum with CZ to provide technical expertise and consulting services for the Central Asian country.
The NIA is responsible for promoting foreign investments and assisting international companies in identifying business opportunities within the country.
Source: Changpeng Zhao
“This cooperation marks an important step towards strengthening technological infrastructure, implementing innovative solutions, and preparing highly qualified specialists in blockchain technologies, virtual asset management, and cybersecurity,” Zhaparov said.
The Kyrgyzstan president added: “such initiatives are crucial for the sustainable growth of the economy and the security of virtual assets, ultimately generating new opportunities for businesses and society as a whole.”
Kyrgyzstan, which officially changed its name from the Republic of Kyrgyzstan to the Kyrgyz Republic in 1993, is a mountainous, land-locked country.
It is considered well-suited for crypto mining operations due to its abundant renewable energy resources, much of which is underutilized.
Over 30% of Kyrgyzstan’s total energy supply comes from hydroelectric power plants, but only 10% of the country’s potential hydropower has been developed, according to a report by the International Energy Agency.
CZ has met with several other state officials in Asia
Malaysia also recently tapped CZ for guidance on crypto-related matters, with Prime Minister Anwar Ibrahim meeting him personally in January.
CZ has also met with officials in the UAE and Bitcoin-stacking country Bhutan — however, it isn’t clear what those meetings entailed.
Related: Is Bitcoin’s future in circular economies or national reserves?
CZ’s latest pursuits come a little over six months after he was released from a four-month prison sentence in the US for violating several anti-money laundering laws.
Since being released, CZ has made investments in blockchain tech, artificial intelligence and biotechnology companies.
CZ also recently donated 1,000 BNB (BNB) — worth almost $600,000 — to support earthquake relief efforts in Thailand and Myanmar after the natural disaster in late April.
Magazine: Financial nihilism in crypto is over — It’s time to dream big again
Donald Trump has acted for his country and I will act in Britain’s interests, Sir Keir Starmer has said after the US president imposed 10% tariffs on UK goods.
The prime minister told business chiefs at an early morning meeting in Downing Street: “Last night the president of the United States acted for his country, and that is his mandate.
“Today, I will act in Britain’s interests with mine.”
Politics latest: Starmer says UK will react to tariffs with ‘cool and calm head’
Mr Trump announced sweeping tariffs on countries around the world, with the UK getting off relatively lightly with 10% tariffs – branded “kind reciprocal” by the president – compared with China, which will have to pay 54% tariffs and 20% for the EU.
A previously announced 25% tariff on British car imports to the US came into effect at 5am on Thursday.
Sir Keir said the government is moving “to the next stage of our plan” after negotiations failed to fend off any tariffs ahead of Wednesday’s announcement.
He promised any decisions “will be guided only by our national interest, in the interests of our economy, in the interests of businesses around this table, in the interests of putting money in the pockets of working people”.
Sir Keir Starmer hosted business leaders in Downing Street on Thursday morning. Pic: Simon Dawson/No 10 Downing Street
“Clearly, there will be an economic impact from the decisions the US has taken, both here and globally,” he told the business leaders.
“But I want to be crystal clear: we are prepared, indeed one of the great strengths of this nation is our ability to keep a cool head.”
Business Secretary Jonathan Reynolds told the Commons on Thursday the government is considering retaliatory measures and requested British businesses let him know what the tariff implications will be for them.
An “indicative list of potential products” that could be targeted was later published, with 8,364 categories covering about 27% of UK imports from the US.
Earlier, Mr Reynolds told Wilfred Frost on Sky News Breakfast his “job is not done” when it comes to negotiating a trade deal
Mr Reynolds refused to say if the tariffs might cause a global recession and said the UK has safeguards in place to ensure it is not flooded with goods that would have gone to other countries.
“We’ll take any powers we need to protect the British people and the British economy from that,” he said.
“What we have directly within our power, alongside that is, of course, the ability to negotiate a better deal in the national interest for the UK. That’s been our approach to date and we’ll continue with that.”
Read more:
World reacts to Trump’s tariff announcement
Tariffs will have consequences for globalisation, the US economy and geopolitics
Trump’s tariffs explained
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Moment Trump unveils tariffs chart
UK will be template for other nations’ deals
The business secretary also suggested if the UK is successful in negotiating a deal with the US “there’ll be a template there” for other countries to “resolve some of these issues”.
He reiterated statements he and the PM have made over the past few days as he said: “America is a friend, America’s our principal ally.
“Our relationship is an incredibly strong economic one, but also a security one, a political one as well.”
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Sky’s Ed Conway examines how economies across the world are impacted by tariffs
Government ‘very slow’ to start talks
Conservative shadow home secretary Chris Philp told Sky News the government had been “very slow” to start negotiating a free trade agreement with the US, and they should have started when Mr Trump was elected in November, even though he did not get sworn in until the end of January.
He said the UK being hit by a lower tariff than the EU was “one of the benefits of Brexit”.
However, he said the 25% tariff on car exports to the US is “very, very serious” and the global impact is “bad news for our economy”.
The list has landed.
More than 400 pages of thousands of goods that could be affected by reciprocal tariffs against the US.
Everything from fresh domestic ducks to sea-going dredgers makes the cut; most symbolic, however, are iconic American items like jeans, motorcycles and whiskey.
Would Donald Trump stand for a levy on Levi’s? It’s not the first time this battle has played out.
When the US president announced tariffs on steel and aluminium in his first term, the EU responded with its own – including a symbolic 25% tax on American whiskey.
At the time, the UK, then an EU member, followed suit.
But as the UK tries to carve its own path outside the bloc, vindicated by the baseline 10% tariffs imposed instead of the EU’s rate of 20%, the aim is to avoid retaliation.
The government want us to know “all options are on the table” – but that is not how they want this to play out.
“This is not a short-term tactical exercise,” the prime minister said this morning.
Despite the business secretary’s best efforts during his recent trip to Washington to try to secure a UK tariffs carveout, no deal was reached in time.
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How will tariffs hit working people?
Mr Trump wanted his big bang, board brandishing moment; carveouts for certain countries would have softened the impact of his speech.
But with 90-plus countries on the tariff billboard, how far along the queue is any UK deal?
And how much are we willing to give? Will the sensitive subject of chlorinated chicken be on the table? What of the agreement to cut taxes on big tech companies that Mr Trump wants?
Lots of questions. The day after the surreal night before is too soon to know all the answers, but this is about politics as much as it is about economics.
Read more:
There were no winners from Trump’s tariff gameshow
Do Trump’s numbers on tariffs really add up?
As the prime minister launched Labour’s local election campaign in Derbyshire today, he talked about potholes, high streets and school meals. Every question I heard was about tariffs.
Decisions made across the Atlantic are looming large. Tariffs may not directly sway many votes in the local elections, but the consequences for Rachel Reeves’s fiscal headroom and the amount of money she has to spend, or save, will have an impact before too long.
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