Bitmain’s revenge, Hong Kong’s crypto rollercoaster: Asia Express
Our weekly roundup of news from East Asia curates the industry’s most important developments.
Bitmain allegedly fired staff after salary complaints
Bitcoin application-specific integrated circuit (ASIC) mining manufacturer Bitmain has allegedly fired three of its employees for speaking to the media regarding the withholding of salary payments by their employer.
According to local news reports on Oct. 17, citing an alleged internal Bitmain memo, the company accused three staff members of breaching various clauses in their employment contracts for sharing their remuneration on social media platforms. The note reads:
“The EMT [Executive Management Team] has decided: (1) Employee Li of product operations and circuit development, is to be fired immediately and blacklisted. (2) Employee Xie of product operations and circuit development, is to be fired immediately and blacklisted. (3) Employee Ding, administrative intern at strategic development PMT, is to be fired immediately and blacklisted. The intern’s post-secondary institution shall also be informed of the incident.”
“In addition, the company reserves the right to pursue legal action against the individuals above,” Bitmain allegedly wrote. “Without authorization by the company, nothing can be said, nothing can be given [to outsiders!]”
On Oct. 9, Cointelegraph reported that Bitmain allegedly paused September salary payments for its staff members as the company “has yet to achieve a net positive cash flow, especially in the orders of [new] ASICs.” In addition, employees allegedly face a 50% cut to their base salary, with all bonuses and incentives being removed.
Founded in Beijing, China in 2013, Bitmain is one of the world’s largest Bitcoin mining ASIC manufacturers, with an estimated 70% market share during the previous bull market that ended in 2021. The firm’s Antminer ASIC series currently leads the industry in terms of hash rate computations for mining Bitcoin. Over the past year, several Bitcoin mining operators have gone bankrupt as the price of Bitcoin plunged while electricity costs surged.
Hong Kong investors spooked by JPEX scandal
Despite efforts to regulate the sector, it appears that some Hong Kong residents have lost their confidence in crypto after the largest Ponzi scheme in the city’s history, the $175 million JPEX crypto exchange scandal, unfolded last month.
According to a new study published by the HKUST Business School Central on Oct. 17, 41% of Hong Kong residents are no longer interested in holding crypto assets, a sharp rise of 12% compared to before the JPEX incident. The survey featured 7,900 respondents and was conducted between April and October.
The study also revealed that 84% of Hong Kongers have heard of crypto, with 27% of respondents claiming they either hold digital assets now or were previously crypto investors. For those investing in crypto, over 80% said they would not invest over 50,000 Hong Kong dollars ($6,390) into the sector. Interestingly, 57% of respondents said they understood that crypto exchanges must obtain a license before operating in Hong Kong, an increase of 15% compared to before the JPEX scandal unraveled.
Wu Huang, a professor at HKUST Business School Central, commented:
“We hope that the results of this survey can provide industry stakeholders with more perspectives to help build a sound virtual asset industry. As virtual assets play an increasingly important role in the digital economy, there is a need to strengthen education efforts to make the public better Understand the risks and potential of this emerging field.”
Last month, JPEX staff fled their corporate booth at Singapore’s Token2049 event after the Hong Kong Securities and Futures Commission issued a warning regarding the exchange’s unregulated activities. Subsequently, Hong Kong police arrested more than 10 corporate executives and influencers connected to the exchange on charges of fraud. The JPEX scandal has since grown to over 2,300 victims, with losses estimated at $175 million. The exchange was unlicensed at the time of the incident.
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On Oct. 16, Bloomberg reported that BC Technology Group, owner of licensed Hong Kong crypto exchange OSL, is contemplating the sale of the latter for 1 billion Hong Kong dollars ($128 million).
On Oct. 17, BC Technology Group issued a clarification stating: “The Board wishes to clarify that the contents and statements in the [Bloomberg] Article are factually inaccurate and highly misleading” and that it was not contemplating a sale of OSL.
Unfortunately, investors who bought BC Technology stock based on the divestiture euphoria were not so happy. After publishing the clarification statement, shares of BC Technology tanked 22% during the trading day, wiping off $54 million in market capitalization. “Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company,” management wrote.
Bitget’s new crypto credit card
Joining the likes of its peers, cryptocurrency exchange Bitget is launching its own crypto-fiat credit card. According to an Oct. 16 announcement during the Future Blockchain Summit in Dubai, the Bitget Card, issued by Visa and backed by digital assets in users’ accounts and wallets, will be denominated in U.S. dollars and will be accepted in over 180 countries.
Although many exchanges have rolled out their own crypto debit or credit cards, some have seen pushback from payment processors. On Aug. 25, Mastercard said it would end its cryptocurrency card partnership with Binance in Latin America. Although the firm did not cite a specific reason, experts have pointed to Binance’s recent regulatory scrutiny as the underlying cause.
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Stablecoins are the single best tool for the United States government to maintain the US dollar’s hegemony in global financial markets, according to LayerZero Labs CEO and founder Bryan Pellegrino.
In an interview with Cointelegraph, the CEO of LayerZero Labs, which created the LayerZero interoperability protocol recently chosen by Wyoming to be the distribution partner for the Wyoming stablecoin, said that the cross-border accessibility of dollar-pegged tokens makes them an obvious choice to drive US dollar demand. Pellegrino added:
“Stablecoins for the US dollar are the single best tool — the last Trojan Horse or vampire attack on every single other currency in the world — whether it is Argentina, whether it is Venezuela, whether it is all of the countries that have massive inflation.”
The CEO said he expects support for stablecoins on both the federal and state levels to grow because of the obvious boost stablecoins give to the US dollar in foreign exchange markets and the financial moat stablecoin-driven demand will create around the US dollar’s global reserve currency status.
Stablecoin market overview. Source: RWA.XYZ
Related: Certain stablecoins aren’t securities, SEC says in new guidance
US government looks to stablecoins to protect US dollar
Pellegrino cited Tether’s emerging role as one of the largest buyers of US Treasury bills in the world as evidence of the demand for US debt instruments from stablecoin issuers.
Tether recently became the seventh-largest holder of US Treasuries, beating out Canada, Germany, Norway, Hong Kong, and Saudi Arabia.
Speaking at the White House Crypto Summit on March 7, US Treasury Secretary Scott Bessent said the Trump administration would leverage stablecoins to extend US dollar hegemony and indicated this would be a top priority for officials in 2025.
According to a 2023 report from Chainalysis, over 50% of all the digital asset value transferred to countries in the Latin American region, including Argentina, Brazil, Columbia, Mexico, and Venezuela was denominated in stablecoins.
The low transaction fees, relative stability, and near-instant settlement times for dollar-pegged stablecoins make these real-world tokenized assets ideal for remittances and stores of value for residents in developing countries suffering from high inflation and capital controls.
Magazine: Bitcoin payments are being undermined by centralized stablecoins
The Consumer Financial Protection Bureau (CFPB) will likely see a reduced role in crypto regulations as other federal agencies like the Securities and Exchange Commission (SEC) and state-level regulators assume a bigger role in crypto policy, according to Ethan Ostroff, partner at the Troutman Pepper Locke law firm.
“I think with the current administration, my sense is, we are highly likely to see a significant pullback by the CFPB in the context of the activity by other regulators,” Ostroff told Cointelegraph in an interview.
State regulators also have the authority under the Consumer Financial Protection Act (CFPA) to assume some of the regulatory roles of the CFPB, the attorney said but also added that some regulatory functions will continue to fall within the purview of the CFPB as a matter of established law.
Ostroff cited the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as regulators to keep an eye on as potential leaders of crypto regulations at the state level.
However, the attorney clarified that while the CFPB may see a diminished role during the Trump administration, the agency would not be outright dismantled during the current regime due to “statutorily mandated obligations and requirements” that require acts of Congress to change.
Related: Elon Musk’s ‘government efficiency’ team turns its sights to SEC — Report
Trump administration targets CFPB in efficiency push
The Trump administration targeted the CFPB as part of a broader push by the Department of Government Efficiency (DOGE) to slash government spending and reduce the federal debt.
Russell Vought, the recently appointed head of the CFPB, announced major funding cuts to the agency and scaled back operations within days of assuming the helm at the CFPB in February 2025.
Source: Russell Vought
Massachusetts Senator Elizabeth Warren criticized Elon Musk for dismantling the CFPB, which the US senator co-founded back in 2007.
Warren characterized Musk as a “bank robber” and claimed that the Trump administration dismantled the CFPB to undo consumer protection rules and have greater control over the financial system.
In a February 12 interview with Mother Jones, the senator stressed that the Executive Branch of government does not have the statutory authority to fully dismantle the CFPB, which can only be done through Congressional approval.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
Nearly 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.
Roughly 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 been extended to June 1, 2025, 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 could account for roughly $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.
FTX court filing, estimated claims. Source: Sunil
The next round of FTX creditor repayments is set for May 30, 2025, with over $11 billion expected to be repaid to creditors with claims of over $50,000.
Under FTX’s recovery plan, 98% of creditors are expected to receive at least 118% of their original claim value in cash.
Related: FTX liquidated $1.5B in 3AC assets 2 weeks before hedge fund’s collapse
How FTX users can complete KYC
Many FTX users have reported problems with the KYC process.
However, users who were unable to submit their KYC documentation can resubmit their application and restart the verification process, according to an April 5 X post from Sunil, FTX creditor and Customer Ad-Hoc Committee member.
FTX KYC portal. Source: Sunil
Impacted users should email FTX support (support@ftx.com) to receive a ticket number, then log in to the support portal, create an account, and re-upload the necessary KYC documents.
Related: Crypto trader turns $2K PEPE into $43M, sells for $10M profit
FTX’s Bahamian subsidiary, FTX Digital Markets, processed the first round of repayments in February, distributing $1.2 billion to creditors.
The crypto industry is still recovering from the collapse of FTX and more than 130 subsidiaries launched a series of insolvencies that led to the industry’s longest-ever crypto winter, which saw Bitcoin’s (BTC) price bottom out at around $16,000.
While not a “market-moving catalyst” in itself, the beginning of the FTX repayments is a positive sign for the maturation of the crypto industry, which may see a “significant portion” reinvested into cryptocurrencies, Alvin Kan, chief operating officer at Bitget Wallet, told Cointelegraph.
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