Our weekly roundup of news from East Asia curates the industry’s most important developments.
Yet another crypto scandal in Hong Kong
Scammers posing as investment experts allegedly enticed 145 victims to tip $18.9 million into the unlicensed Hong Kong crypto exchange Hounax.
According to reports earlier this week, the police said investors were allegedly promised up to 40% return per annum with “no risk” in its advertisements. After users deposited their funds, they were unable to withdraw them. On November 1, the Securities & Futures Exchange (SFC) of Hong Kong listed Hounax on its billboard of suspicious crypto exchanges but clarified that because Hounax was unlicensed at the time of incident, it was not subjected to the regulatory’s enforcement actions.
This was the second scandal involving a crypto exchange in Hong Kong in recent months. In September, another unlicensed exchange JPEX collapsed after allegations of a Ponzi scheme unsurfaced, leading to 66 arrests and an estimated $205 million in investors’ losses.
Despite the scandals, Hong Kong regulators appear to remain steadfast in their commitment to transforming the city into a major Web3 hub. On November 27, SFC CEO Julia Leung, explained that “even if the grace period ends tomorrow, fraud will still occur, so there is no intention to modify the grace period and other measures for the time being.”
Under current regulations, a grace period for crypto exchanges to operate without registration will end in June 2024. On November 30, the SFC stated that it seeks to legitimize initial coin offerings in the city to create more revenue for the national budget.
A former ad from the defunct Hounax exchange. (Medium)
In other Hong Kong crypto news, the financial institutions, Interactive Brokers and Victory Securities, this week announced they had secured crypto licenses, with the former partnering with licensed crypto exchange OSL to immediately provide Bitcoin (BTC) and Ethereum (ETH) trading services to its Hong Kong clients.
And on November 29, Darryl Chan, deputy chief executive of the Hong Kong Monetary Authority, announced a multinational effort to create a cross-chain bridge for China’s digital yuan central bank digital currency (e-CNY CBDC). Dubbed “mBridge,” the protocol seeks to reduce transaction fees and improve speeds for cross-border uses of the e-CNY CBDC. The first pilot tests will begin in Mainland China and Hong Kong.
Standard Chartered, HSBC, Hang Seng Bank, and Taiwan-based Fubon Bank have begun testing of the digital yuan in cross-border transactions.
According to local news reports on November 28, the four foreign banks will also integrate e-CNY transfer services for their clients and enable them to deposit and withdraw e-CNY. Personal banking accounts will also support the official e-CNY app and self-custody wallet. Yuesheng Song, president and vice-chairman of Hang Seng China, commented:
“The central bank’s launch of the digital RMB, a legal currency in digital form, is an important step for China to explore the development of digital currency and promote the internationalization of the RMB. Hang Seng China follows the national financial development policy advocacy and actively supports the application and development of the central bank’s digital currency.”
In the first three quarters of 2023, the use of the digital yuan in transactions was up 35% year-on-year, reaching $1.39 trillion, China Daily reported. On November 29, the first-ever e-CNY student loans were issued in the province of Suzhou with $26,230 worth of loans being issued directly into the digital wallets of 13 recipients.
List of banks supported by the e-CNY app, including Standard Chartered, HSBC, Hang Seng Bank, and Fubon Bank. (Baidu)
HTX back to normal
HTX exchange (formerly Huobi Global) has reopened deposits and withdrawals after a devastating hot wallet hack that drained the exchange of $30 million on November 22.
According to the November 26 announcement, the exchange has since resumed deposits and withdrawals on the Bitcoin, Ethereum, and Tron networks.
“Huobi HTX once again promises to fully compensate for the losses caused by this attack and 100% guarantee the safety of user funds. The amount of funds lost by Huobi HTX this time accounts for a very small amount of the total funds of the platform,” the exchange said.
The firm has also announced that a special airdrop will take place in December designed to reward its “loyal users.” Airdrop tokens will reportedly come from an “upcoming high-quality projects,” and the amount to be received will be determined by a users’ average net assets on the HTX exchange denominated in Tether (USDT).
Justin Sun, de-facto owner of the HTX exchange. Incredibly, Warren Buffett did not convert to crypto following the meeting. (Twitter)
Immediately after the incident, Justin Sun, founder of the Tron ecosystem and de-facto owner of the HTX exchange, commented “we will cover the loss and all assets are SAFE.” Despite assurances, however, this was the fourth exploit involving the HTX ecosystem within the past two months. Around the same time as the HTX exploit, the HTX Ecosystem Chain (HECO) bridge was hacked for $87 million.
On November 10, Poloniex, an exchange acquired by Sun in 2018, was hacked for $100 million due to allegedly compromised private keys. The exchange resumed withdrawals on November 30. On September 25, HTX was drained of $8 million in a security incident. The exchange has since clawed back $8 million in stolen funds and issued a 250 Ether bounty to the hacker.
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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.
It has emerged he only pays a “peppercorn rent” on the property – a legal term used in leases to show that rent technically exists, so the lease is valid, but it’s nominal – often £1 a year or even nothing at all.
Liberal Democrat leader Sir Ed Davey has called for a select committee inquiry into the Crown Estate, in which Prince Andrew would be called to give evidence.
Speaking in Prime Minister’s Questions, Sir Ed said: “Given the revelations about Royal Lodge, does the prime minister agree that this House needs to properly scrutinise the Crown Estate to ensure taxpayers’ interests are protected.
“The chancellor herself has said that the current arrangements are wrong.
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“So will the prime minister support a select committee inquiry, so all those involved can be called for evidence, including the current occupant?”
Responding, Prime Minister Sir Keir Starmer said: “It’s important in relation to all Crown properties that there is proper scrutiny, and I certainly support that.”
A document from the Crown Estate, which oversees the Royal Family’s land and property holdings, shows Andrew signed a 75-year lease on the Royal Lodge in 2003.
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8:32
Prince Andrew faces renewed scrutiny over his royal title and taxpayer-funded residence at Royal Lodge.
It reveals he paid £1m for the lease and that since then he has paid “one peppercorn” of rent “if demanded” per year.
Andrew was also required to pay a further £7.5m for refurbishments completed in 2005, according to a report by the National Audit Office.
The agreement also contains a clause that states the Crown Estate would have to pay Andrew around £558,000 if he gave up the lease.
The royal is under pressure to do just that amid continued scrutiny over his relationship with paedophile financier Jeffrey Epstein.
There has also been fresh focus on his sex accuser Virginia Giuffre’s allegations, which Andrew denies, after the publication of her posthumous memoirs.
Senior Tory Robert Jenrick said it was “about time Prince Andrew took himself off to live in private” as “the public are sick of him”.
Asked about his living arrangement on Tuesday, Chancellor Rachel Reeves told the BBC: “I do think people should pay their way and pay their fair share.”
A migrant who was deported back to France under the government’s flagship “one in, one out” scheme has returned to the UK on a small boat.
The Iranian national was initially detained when he entered the UK on a small boat on 6 August. He was removed under the government’s deal with France on 19 September, and he returned on 18 October.
He has been detained once again, and Sky News understands that the government is set to expedite his removal back to France.
The “one in, one out” treaty with France allows the UK to return anyone who arrives in the UK on a small boat back to France, in exchange for France sending to the UK the same number of people who have never previously tried to enter illegally.
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2:03
What is the UK-France migrant returns deal?
The man told The Guardian newspaper that he had been a victim of modern slavery at the hands of people smugglers in northern France.
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“If I had felt that France was safe for me I would never have returned to the UK,” he claimed.
“When we were returned to France we were taken to a shelter in Paris. I didn’t dare to go out because I was afraid for my life. The smugglers are very dangerous. They always carry weapons and knives. I fell into the trap of a human trafficking network in the forests of France before I crossed to the UK from France the first time.
“They took me like a worthless object, forced me to work, abused me, and threatened me with a gun and told me I would be killed if I made the slightest protest. Every day and every night, I was filled with terror and stress. Every day I live in fear and anxiety, every loud noise, every shadow, every strange face scares me.
“When I reached UK the first time and Home Office asked what had happened to me I was crying and couldn’t speak about this because of shame.”
The UK government’s position is that France is a safe country.
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3:36
PM and Macron agree migrant deal
‘Rwanda is further than France’
The aim of the agreement with France is to create a disincentive for migrants to make the dangerous crossing across the Channel. But Downing Street repeatedly refused to describe the scheme as a “deterrent” this afternoon, insisting that the scheme is among a number of measures the government is taking to stop small boat crossings.
A Home Office spokesperson said in a statement: “We will not accept any abuse of our borders, and we will do everything in our power to remove those without the legal right to be here.
“Individuals who are returned under the pilot and subsequently attempt to re-enter the UK illegally will be removed.”
Former Tory home secretary James Cleverly quipped on social media that “Rwanda is a lot further away than France”, arguing that had their embattled scheme got off the ground, it would have been harder for migrants to make the return journey.
The prime minister is hosting Western Balkans leaders on Wednesday as the government tries to crack down on people smuggling and illegal migration.
While the exact number of people who have made the crossing today is not set to be published until tomorrow, Home Office sources have confirmed that more than 36,816 people – the total for 2024 – have now crossed the Channel so far in 2025.
Home Secretary Shabana Mahmood said in a statement: “The previous government left our borders in crisis, and we are still living with the consequences. These figures are shameful – the British people deserve better.
“This government is taking action. We have detained and removed more than 35,000 who were here illegally. Our historic deal with the French means those who arrive on small boats are now being sent back.
“But it is clear we must go further and faster – removing more of those here illegally, and stopping migrants from making small boat crossings in the first place.
“And I have been clear: I will do whatever it takes to restore order to our border.”