Korean crypto firm raises $140M, China’s $1.4T AI sector, Huobi battle: Asia Express
Our weekly roundup of news from East Asia curates the industry’s most important developments.
South Korean Web3 firm raises $140 million
South Korean nonfungible tokens (NFT) developer Line Next secured a $140 million investment on December 13 from a consortium led by Peter-Thiel-backed private equity firm Crescendo Equity Partners. It’s the largest blockchain series funding round in Asia this year.
The firm’s NFT platform, dubbed “DOSI,” is scheduled to premiere in January 2024, integrated with Japanese NFT marketplace Line NFT.
“With this investment, Line Next also plans to introduce new services to further accelerate Web3 popularization. These include introducing a social app that allows users to communicate based on the characters they made utilizing AI technology and launching new Web3 games utilizing BROWN & FRIENDS characters that anyone can enjoy.”
Line Next plans to create the new services on public blockchain Finschia, with Line and Crescendo participating in the Finschia Foundation as governance members. The firm claims it has achieved over 470,000 cumulative transactions through various decentralized applications operating under its DOSI brand. Its popular messaging app, Line, has over 5 million users.
China’s AI market reaches $1.42 trillion this year
The state-owned China Electronics Information Industry Development Academy (CEIIDA) estimated on December 14 that the country’s AI market grew to be worth 10 trillion yuan ($1.42 trillion) this year, aided by the use of generative AI in manufacturing, retail, information technology, and healthcare. And it said the industry is just getting started:
“In 2035, generative artificial intelligence is expected to contribute nearly 90 trillion yuan in economic value to the world, of which my country will exceed 30 trillion yuan, accounting for more than 40%.”
According to official statistics, over 1,800 AI firms are situated in Beijing alone. Advancements in Chinese AI have enabled firms to directly harness the power of AI computing via cloud technology, skipping requirements to develop their own in-house generative AI models. By 2025, CEIIDA researchers estimate that 35% of the country’s digital computing operations will be handled by AI. Meanwhile, the City of Beijing has begun to issue “vouchers” tied to government related generative-AI software. The AI vouchers promise data computation and delivery for tasks such as medical inquiries within “one millisecond” of initiation.
Earlier this year on June 5, Chinese AI startup Guangnian Zhiwai, or “Lightyears Away”, reached unicorn status less than 100 days after incorporation. The round was led by a notable Chinese venture capital firm along with Chinese internet conglomerate Tencent. According to media reports, Lightyears Away aims to become China’s OpenAI, mirroring its American counterpart’s success. The firm had no market-ready product at the time of the raise and only started hiring technical staff thereafter.
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Huobi co-founder’s new venture stagnates
Sinohope Technology (also known as New Huo Tech), is a cryptocurrency exchange and custodian established by Huobi Global co-founder Leon Li. It disclosed on December 13 that the firm expects a loss of $280 million Hong Kong dollars ($35.86 million) for the first nine months of 2023, an increase from HKD$200 million ($25.61 million) during the same period last year. Part of the loss included HKD$86 million ($11 million) of enterprise deposits stuck on bankrupt cryptocurrency exchange FTX.
At the time FTX went under last November, Leon extended a $14 million personal line of credit to bailout Sinhope customers affected by FTX’s collapse. A full financial report of the company’s operations during the first nine months of 2023 will be published this month, Sinohope said.
On December 11, X-Spot Global, another company owned by Leon Li, won an injunction against Huobi Global for the latter to cease its use of the Chinese-equivalent “Huobi” trademark in Hong Kong.
According to court filings, the Huobi trademark was registered in 2019 in Hong Kong. In September 2022, Huobi Global was sold by co-founders Leon Li and Du Jun to About Capital Management, an entity linked to Chinese blockchain personality Justin Sun. However, the rights to the Chinese-language Huobi trademark had been fully transferred to Leon Li’s X-Spot Global prior to the acquisition, making the entity its trademark owner. Huobi subsequently rebranded to HTX this September.
OKX DEX exploited for $2.7 million
Crypto exchange OKX’s decentralized exchange (DEX) suffered a reported $2.7 million hack on December 13 after the private key of the proxy admin owner was allegedly leaked. In a statement, OKX developers said that “was caused by the theft of the management rights of an abandoned OKX DEX market maker contract that is no longer in use” Developers also estimate the loss to be lower than reported by blockchain analytics firms, at $370,000, over 18 addresses.
“Judicial procedures will be initiated to recover relevant losses. The platform will conduct a security self-examination in the future and reorganize all related abandoned contracts to avoid such incidents from happening again. We sincerely apologize for the inconvenience.”
Bitget’s spot trading volume rises 82% amid crypto market thaw
Cryptocurrency Bitget’s spot trading volume increased by 82% in November as part of a wider industry recovery. In its monthly report, the exchange said that its Protection Fund, comprised of 6,500 Bitcoin (BTC) and 120 million Tether (USDT), had surged by $90 million in capital appreciation value compared to when the Fund launched on December 22, 2022. The exchange also onboarded 5,000 new traders last month.
“Additionally, the first week of December witnessed an increased demand for our copy trading in the spot market (launched in January 2023) compared to the first week of November, with a 23% rise in the number of users engaging in copy trading, which attracted 17% more users compared to the entire December of the previous year.”
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The crypto industry is set to experience massive growth in the United Arab Emirates (UAE) due to its pro-tech and business regulations.
Without localized risk detection and public–private cooperation, illicit capital will continue to flow unchecked, and trust in the system will collapse.
Thousands more Afghan nationals may have been affected by another data breach, the government has said.
Up to 3,700 Afghans brought to the UK between January and March 2024 have potentially been impacted as names, passport details and information from the Afghan Relocations and Assistance Policy has been compromised again, this time by a breach on a third party supplier used by the Ministry of Defence (MoD).
This was not an attack directly on the government but a cyber security incident on a sub-contractor named Inflite – The Jet Centre – an MoD supplier that provides ground handling services for flights at London Stansted Airport.
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July: UK spies exposed in Afghan data breach
The flights were used to bring Afghans to the UK, travel to routine military exercises, and official engagements. It was also used to fly British troops and government officials.
Those involved were informed of it on Friday afternoon by the MoD, marking the second time information about Afghan nationals relocated to the UK has been compromised.
It is understood former Tory ministers are also affected by the hack.
Earlier this year, it emerged that almost 7,000 Afghan nationals would have to be relocated to the UK following a massive data breach by the British military that successive governments tried to keep secret with a super-injunction.
Defence Secretary John Healey offered a “sincere apology” for the first data breach in a statement to the House of Commons, saying he was “deeply concerned about the lack of transparency” around the data breach, adding: “No government wishes to withhold information from the British public, from parliamentarians or the press in this manner.”
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July: Afghan interpreter ‘betrayed’ by UK govt
The previous Conservative government set up a secret scheme in 2023 to relocate Afghan nationals impacted by the data breach, but who were not eligible for an existing programme to relocate and help people who had worked for the British government in Afghanistan.
The mistake exposed personal details of close to 20,000 individuals, endangering them and their families, with as many as 100,000 people impacted in total.
Read more on Sky News:
Data breach victims sent spam emails
Afghan data leak timeline
MoD urged to reveal details of nuclear incident
A government spokesperson said of Friday’s latest breach: “We were recently notified that a third party sub-contractor to a supplier experienced a cyber security incident involving unauthorised access to a small number of its emails that contained basic personal information.
“We take data security extremely seriously and are going above and beyond our legal duties in informing all potentially affected individuals. The incident has not posed any threat to individuals’ safety, nor compromised any government systems.”
In a statement, Inflite – The Jet Centre confirmed the “data security incident” involving “unauthorised access to a limited number of company emails”.
“We have reported the incident to the Information Commissioner’s Office and have been actively working with the relevant UK cyber authorities, including the National Crime Agency and the National Cyber Security Centre, to support our investigation and response,” it said.
“We believe the scope of the incident was limited to email accounts only, however, as a precautionary measure, we have contacted our key stakeholders whose data may have been affected during the period of January to March 2024.”
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