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Our weekly roundup of news from East Asia curates the industry’s most important developments.

HTX exchange hacked… again 

In the fourth hack affecting the HTX (formerly Huobi Global) ecosystem in just two months, the exchange lost $13.6 million via a hot wallet hack that occurred on Nov. 22.

In its Nov. 23 announcement, the exchangepromisedto “fully compensate for the losses caused by this attack and 100% guarantee the safety of user funds,” as well as restore services within 24 hours of the attack. The day prior, the HTX Eco Chain (HECO) bridge was exploited for $86.6 million. An investigation is ongoing.

In September, the HTX exchange was hacked for $7.9 million; this was followed by a $100 million hack against the Poloniex exchange, a related entity, in November. Justin Sun, the Chinese blockchain personality and de-facto owner of HTX (not to mention the owner of Poloniex, founder of Tron and CEO of BitTorrent etc),stated after the attack that “HTX Will Fully Compensate for HTX’s hot wallet Losses. Deposits and Withdrawals Temporarily Suspended. All Funds in HTX Are Secure.” Sun previously also madeassurancesthat “all user assets are #SAFU” in the aftermath of the September hack against HTX.

Huobirebranded to HTXduring this year’s Singapore2049 event in September. Although its executives have repeatedly reassured that the exchange is doing well, the exchange ran into a number ofserious incidentsthis year, including analleged employee revolt.

Justin Sun during Web3 Hong Kong. (Twitter)
Justin Sun blushes as he shares a stage with Nina on April 11.

Binance pleads guilty, settles criminal charges for $4.3 billion

Crypto exchange Binance has agreed to plead guilty to violating the U.S. Bank Secrecy Act, knowingly failing to register as a money-transmitting business, and willfully violating the International Emergency Economic Powers Act. The exchange will pay $4.3 billion in penalties and forfeiture to the U.S. Justice Department.

According to the Nov. 21announcement, Changpeng Zhao, co-founder and CEO of Binance, has also pled guilty to one count of willfully violating the U.S. Bank Secrecy Act. Zhao has since entered his personal plea in the District Court for the Western District of Washington.

At the time, Zhao was granted a $175 million bond that allowed him to reside in Dubai pending his sentencing hearing on Feb. 24. However, the U.S. Department of Justice has since appealed that decision, asking to confine his residence to the U.S. pending the sentencing hearing due to Zhao allegedly possessing an “unacceptable risk of flight.”

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In its indictment, the Department of Justice noted that, in a few noticeable incidents and despite reassurances, Binance facilitated over $1 billion in illicit transactions for Iranian users, the Russian marketplace Hyrdra and cryptocurrency mixer Bestmixer. and it solicited U.S. users without prior registration. Binance was also accused of deliberately masking such actions as “complying with U.S. law would stifle their efforts to grow Binance’s profits, market share, and trading volume.”

The same day, Zhao stepped down as the CEO of Binance. “I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself,” he stated. 

“Binance is no longer a baby. It is time for me to let it walk and run. I know Binance will continue to grow and excel with the deep bench it has.”

While Zhao still owns a majority in the exchange, he will be barred from being involved in the exchange’s everyday operations. Richard Teng, Binance’s global head of regional markets, was named the exchange’s new CEO. In his inaugural statement, Teng stated that the exchange’s fundamentals were “VERY strong” and that Binance is still “the world’s largest crypto exchange by volume.”

Blockchain analytics firm Nansen has noted that despite the guilty plea, it did not witness any “mass exodus of funds” after the incident. While the exchange witnessed nearly $965 million worth of withdrawals, its total holdings increased to $65 billion. On November 23, CZ’s X account was temporarily suspended after removing “Binance” from his profile name. 

U.S. Attorney General Merrick Garland during the indictment announcement. (DoJ)
U.S. Attorney General Merrick Garland during the indictment announcement. (DoJ)

South Korea invites 100,000 people to test CBDC

The Bank of Korea, South Korea, and Central Bank will invite 100,000 Korean citizens to purchase goods with deposit tokens issued by commercial banks as part of its central bank digital currency (CBDC) pilot test. The first of such trials began in October. 

According to local news reports on November 23, “participants will be restricted to using the currency solely for its designated purpose of payment. Other uses, including personal remittance, will not be permitted at this time.” Although the Bank of Korea has not yet decided to whether or not to implement a CBDC, further trials are expected, including an integration simulation system for carbon emissions trading on the Korea Exchange. It said: 

“Recently, the rapid digitalization of the economy has led to a growing demand for a digital form of public currency. This demand is evident in the private sector, where new payment instruments such as stablecoins have been developed and are already widely used in certain sectors.”

Evening in downtown Seoul.
Evening in downtown Seoul. (Source: Pexels)

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.

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Open border immigration ‘not pragmatic right now’, says Green Party leader

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Open border immigration 'not pragmatic right now', says Green Party leader

Greens leader Zack Polanski has rejected claims his party would push for open borders on immigration, telling Sky News it is “not a pragmatic” solution for a world in “turmoil”.

Mr Polanski distanced himself from his party’s “long-range vision” for open borders, saying it was not in his party’s manifesto and was an “attack line used by opponents” to question his credibility.

It came as Mr Polanski, who has overseen a spike in support in the polls to double figures, refused to apologise over controversial comments he made about care workers on BBC Question Time that were criticised across the political spectrum.

Mr Polanski was speaking to Sky News earlier this week while in Calais, where he joined volunteers and charities to witness how French police handle the arrival of migrants in the town that is used as a departure point for those wanting to make the journey to the UK.

He told Sky News he had made the journey to the French town – once home to the “Jungle” refugee camp before it was demolished in 2016 – to tackle “misinformation” about migration and to make the case for a “compassionate, fair and managed response” to the small boats crisis.

He said that “no manifesto ever said anything about open borders” and that the Greens had never stood at a general election advocating for them.

“Clearly when the world is in political turmoil and we have deep inequality, that is not a situation we can move to right now,” he said.

More on Green Party

“That would also involve massive international agreements and cooperation. That clearly is not a pragmatic conversation to have right now. And very often the government try to push that attack line to make us look not pragmatic.”

The party’s manifesto last year did not mention open borders, but it did call for an end to the “hostile environment”, more safe and legal routes and for the Home Office to be abolished and replaced with a department of migration.

Asked why the policy of minimal restrictions on migration had been attributed to his party, Mr Polanski said open borders was part of a “long-range vision of what society could look like if there was a Green government and if we’d had a long time to fix some of the systemic problems”.

‘We should recognise the contribution migrants make’

Mr Polanski, who was elected Green Party leader in September and has been compared to Nigel Farage over his populist economic policies, said his position was one of a “fair and managed” migration system – although he did not specify whether that included a cap on numbers.

He acknowledged that there needed to be a “separate conversation” about economic migration but that he did not believe any person who boarded a small boat was in a “good situation”.

While Mr Polanski stressed that he believed asylum seekers should be able to work in Britain and pay taxes, he also said he believed in the need to train British workers in sectors such as care, where one in five are foreign nationals.

Asked what his proposals for a fair and managed migration system looked like, and whether he supported a cap on numbers, Mr Polanski said: “We have 100,000 vacancies in the National Health Service. One in five care workers in the care sector are foreign nationals.

Zack Polanski speaks to Sky News from a warehouse in Calais where charities and organisations provide migrants with essentials.
Image:
Zack Polanski speaks to Sky News from a warehouse in Calais where charities and organisations provide migrants with essentials.

“Now, of course, that is both British workers and we should be training British workers, but we should recognise the contribution that migrants and people who come over here make.”

I’m not going to apologise’

Mr Polanski also responded to the criticism he attracted over his comments about care workers on Question Time last week, where he told the audience: “I don’t know about you, but I don’t particularly want to wipe someone’s bum” – before adding: “I’m very grateful for the people who do this work.”

His comments have been criticised by a number of Labour MPs, including Wes Streeting, the health secretary, who said: “Social care isn’t just ‘wiping someone’s bum’. It is a hard, rewarding, skilled professional job.

“This is immigration as exploitation.”

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Asked whether he could understand why some care workers might feel he had talked down to them, the Greens leader replied: “I care deeply about care workers. When I made those comments, it’s important to give a full context. I said ‘I’m very grateful to people who do this important work’ and absolutely repeat that it’s vital work.”

“Of course, it is not part of the whole job, and I never pretended it was part of the whole job.”

Mr Polanski said he “totally” rejected the suggestion that he had denigrated the role of care workers in the eyes of the public and said his remarks were made in the context of a “hostile Question Time” where he had “three right-wing panellists shouting at me”.

Pressed on whether he wanted to apologise, he replied: “I’m not going to apologise for being really clear that I’m really grateful to the people who do this really vital work. And yes, we should be paying them properly, too.”

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Crypto groups slam Citadel for urging tighter DeFi tokenization rules

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Crypto groups slam Citadel for urging tighter DeFi tokenization rules

A group of crypto organizations has pushed back on Citadel Securities’ request that the Securities and Exchange Commission tighten regulations on decentralized finance when it comes to tokenized stocks.

Andreessen Horowitz, the Uniswap Foundation, along with crypto lobby groups the DeFi Education Fund and The Digital Chamber, among others, said they wanted “to correct several factual mischaracterizations and misleading statements” in a letter to the SEC on Friday.

The group was responding to a letter from Citadel earlier this month, which urged the SEC not to give DeFi platforms “broad exemptive relief” for offering trading of tokenized US equities, arguing they could likely be defined as an “exchange” or “broker-dealer” regulated under securities laws.

“Citadel’s letter rests on a flawed analysis of the securities laws that attempts to extend SEC registration requirements to essentially any entity with even the most tangential connection to a DeFi transaction,” the group said.

The group added they shared Citadel’s aims of investor protection and market integrity, but disagreed “that achieving these goals always necessitates registration as traditional SEC intermediaries and cannot, in certain circumstances, be met through thoughtfully designed onchain markets.”

Citadel’s ask would be impractical, group says

The group argued that regulating decentralized platforms under securities laws “would be impracticable given their functions” and could capture a broad range of onchain activities that aren’t usually considered as offering exchange services.

The letter also took aim at Citadel’s characterization that autonomous software was an intermediary, arguing it can’t be a “‘middleman’ in a financial transaction because it is not a person capable of exercising independent discretion or judgment.”

Source: DeFi Education Fund

“DeFi technology is a new innovation that was designed to address market risks and resiliency in a different way than traditional financial systems do, and DeFi protects investors in ways that traditional finance cannot,” the group argued.

Related: SEC’s Crenshaw takes aim at crypto in final weeks at agency

In its letter, Citadel had argued that the SEC giving the green light to tokenized shares on DeFi “would create two separate regulatory regimes for the trading of the same security” and would undermine “the ‘technology-neutral’ approach taken by the Exchange Act.”