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

On Aug. 11, a Chinese individual known only as Mr. Chen was sentenced to nine months in prison after helping his friend, Mr. Lin, purchase 94,988 Chinese yuan ($13,104) worth of Tether (USDT) and earning a commission of 147.1 Yuan ($20.24).

Because Mr. Chen shared his personal bank information for the peer-to-peer fiat-to-crypto transaction, Chinese authorities considered the act to be money laundering and imposed a harsh sentence.

Chinese judge explains why the Bitcoin lending contract was invalid and therefore denied relief for breach of contract.
Chinese judge explains in a prior case why a Bitcoin lending agreement was legally invalid even in the event of a breach of contract. (Jstv)

Officially, Chinese authorities attribute the tough-on-crypto approach to a spree of data theft and the use of crypto to launder proceeds of crime. However, sources tell Cointelegraph that the crackdown is more related to the country’s stringent capital control rules, where Chinese nationals are prohibited from buying more than $50,000 worth of foreign currencies each year without a state permit. The same applies to large-sum Chinese yuan transactions with foreign banks.



The capital controls had been almost complete until the advent of crypto, sources say. The problem is further exasperated by a looming recession in China, making senior government officials wary of further money moving out of the country.

In July, Jingmen municipal police were tipped off about an online poker platform operating in the city. Raiding the offices, police discovered the group had “laundered” over 400 billion Chinese yuan ($54.93 billion) worth of gambling funds using cryptocurrencies and involving over 50,000 individuals.

However, the underlying criminal act that resulted in the “tainted money” was never mentioned. Unlike other jurisdictions, the act of gambling itself and the transfer of currencies abroad without applicable permits are deemed to be illicit activities. According to user reports, fiat-to-crypto transactions stemming as far back as 2021 are currently being audited by “special police task forces.”

Crypto projects and their Chinese founders are also disappearing at an alarming rate. The well-known Multichain incident aside, in May, employees of Chinese offshore yuan stablecoin issuer CNHC were detained by police following an office raid. They have not been heard from since. Commenting on the story, Wuwei Liang, a former employee of defunct crypto exchange CoinXP, claimed:

“Suddenly, despite there being no complainants nor victims, the Wuxi police who came to Beijing from across the province took away all the members of the CoinXP team of China’s domestic blockchain entrepreneurial team.”

Liang further alleged that Chinese police would resort to “intimidation” to force a confession and the surrender of a project’s private key. Armed with this as “evidence” police then charge the co-founder with “fraud and multilevel marketing,” bringing about a sham trial where the accused is convicted, resulting in the seizure of enterprise and user funds alike. (These allegations have not been proven in court.) We reported earlier on allegations of intimidation, detention, and even suggestions of the “kidnapping” of the defense counsel at the ongoing CoinXP trial.

CBDC printer goes brrrr

Don’t misinterpret the Chinese government, however; they are quite fond of blockchain, so long as they are the ones in charge.

In the interest of revitalizing China’s ailing economy via consumer spending, government officials have recognized the role of the Chinese yuan central bank digital currency and made its adoption a political priority. On July 27, the city of Suqian airdropped 20 million ($2.75 million) of digital yuan shopping vouchers to residents.

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This was followed by a 10 million ($1.37 million) digital yuan food voucher airdrop by the city of Hangzhou, a 40 million ($5.49 million) digital yuan airdrop by the city of Shaoxing, a 30 million ($4.12 million) digital yuan airdrop by the city of Jianyang, and a 3 million ($0.412 million) digital yuan airdrop by the city of Ningbo, all within less than two weeks. At one test site in Chengdu, China’s largest food delivery platform, Meituan, reported a 65.5% daily increase in the number of digital yuan transactions on its platform.

So there are definitely real-world results to help revitalize the economy — something desperately needed right now. On Aug. 15, China announced it would stop reporting its youth unemployment figures after the metric reached a record 21.3% in June. Perhaps we can expect the (blockchain) printer to go brrr in the months ahead?

Chinese president Xi Jinping during the Shanghai Cooperation Summit (CCTV)
Chinese President Xi Jinping explains during the Shanghai Cooperation Summit why ‘”friendly nations” such as Belarus and Iran should develop their own CBDCs. (CCTV)

3AC creditors suffer humiliating defeat 

Lawsuits can be tough, especially when it comes to matters such as liquidating a $3.5 billion Singaporean hedge fund through multi-jurisdictional litigation. This is why a high level of competency is generally required for the attorneys who take part in such proceedings.

And so, creditors of Three Arrows Capital (3AC) were dealt a significant setback on Aug. 11, when United States Bankruptcy Judge Martin Glenn said civil contempt rulings against 3AC co-founder Kyle Davies were invalid.

Judge Glenn explained that the subpoenas issued by law firm Teneo on behalf of creditors to Davies via Twitter starting in December were made on the basis that Davies held U.S. citizenship. However, it emerged earlier this month that Davies’ renounced his U.S. citizenship to acquire Singaporean citizenship a few years prior.

“Because Mr. Davies’ United States citizenship was a prerequisite for valid service on him in the manner effected, he was not properly served with the subpoena issued by this Court.”

As a result, the U.S. court could not exercise jurisdiction against Davies, with Judge Glenn suggesting that creditors’ attorneys bring a motion to a Singaporean court to compel Davies’ compliance instead. It has been over a year since 3AC filed for bankruptcy.

In other words, after one year’s time, creditors have just found out that the jurisdiction where they filed to claim debtors’ assets had no jurisdiction over the debtors. 3AC co-founder Zhu Su, by the way, also has Singaporean citizenship and cannot be compelled by U.S. courts on this matter.

In a post to followers, Su Zhu bids his audience good morning and asks for "good vibes only." (Twitter)
3AC co-founders Kyle Davies (left) and Su Zhu (right). (X/Twitter)

Now don’t get me wrong, everyone makes mistakes, but often trivial mistakes have trivial consequences. Unfortunately, that wasn’t the case here. Since the inception of proceedings, 3AC creditors have reportedly spent millions in legal fees, with some estimates going as high as $30 million. The proceedings have so far led to the recovery of several nonfungible tokens (NFTs) owned by 3AC, which were sold at two Sotheby’s auctions for a combined … $13.4 million.

In another setback, a Singaporean court ruled on Aug. 15 that the city-state would be the convenient forum for hearing 3AC creditors’ $140 million dispute with DeFiance Capital, and not the British Virgin Islands as suggested by Teneo. 3AC creditors allege that funds held with DeFiance Capital belong in the estate of 3AC, while DeFinance Capital says that its assets belong to its independent investors. Commenting on the double whammy, Su Zhu wrote:

“As the current acting liquidator for 3AC, we believe Teneo is repeatedly overreaching in their attempt to seize other investors’ funds. Even on a technical and legalistic approach, the DC [DeFiance Capital] and SNC assets rightfully belong to the feeder funds of 3AC,”

But in the overall context, winning a battle is easy; winning a war is difficult. On Aug. 16, Dubai regulators reminded Davies and Zhu that their new OPNX exchange for trading crypto bankruptcy claims remains unregistered in the Emirate and, correspondingly, faces a 10 million Dirham ($2.72 million) penalty for operating without a proper license.

Unlike in the U.S., Davies and Zhu actually own assets in the UAE vulnerable to seizure, including Davies’ prized chicken restaurant. Whether the co-founders can really keep their assets sheltered from the path of angry creditors (and regulators alike) remains to be seen.

Just before we published Asia Express, 3AC liquidators filed a committal order against Zhu Su in the court of Singapore.

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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UK could suspend visas from countries that do not agree migrant returns deals, says home secretary

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UK could suspend visas from countries that do not agree migrant returns deals, says home secretary

The UK could suspend visas from countries that do not “play ball” and agree to returns deals for migrants, the new home secretary has said.

Speaking to broadcasters, Shabana Mahmood repeatedly said that her “top priority” is to “secure our borders”, and called on countries to take back their citizens if they have no right to be in the UK.

The government is under vast pressure to stop small boats crossing the English Channel – over 30,000 people have arrived so far this year, including over 1,000 people on Saturday alone.

Politics latest: Home secretary rules out standing for deputy Labour leader

The new home secretary is hosting her counterparts from fellow members of the Five Eyes intelligence-sharing alliance – which includes the US, Australia, Canada, and New Zealand – to discuss “what more we can do to work together to make sure that our borders are secure and that all citizens feel safe”.

Pic: PA
Image:
Pic: PA

Speaking to broadcasters during the summit, Ms Mahmood said: “For countries that do not play ball, we’ve been talking about how we can take much more co-ordinated action between the Five Eyes countries.

“For us, that means including possibly the cutting of visas in the future, just to say, you know, we do expect countries to play ball, play by the rules, and if one of your citizens has no right to be in our country, you do need to take them back.”

She repeatedly vowed to do “whatever it takes” to stop small boat crossings, and she rejected the suggestion that she is emulating policies already proposed by other parties, saying: “This is a Labour government with Labour policy and Labour proposals.

“We’ve been looking at this for some time. It’s been discussed already across the government, and I’m very clear that there has to be a strong approach to maintaining our border, and that does mean saying to countries who do not take their citizens back that we’re not simply going to allow our laws to remain unenforced.”

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Sam and Anne discuss the differences between Yvette Cooper and Shabana Mahmood.

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But shadow home secretary Chris Philp said: “All we get from Labour are tough words. I urged them to immediately use the powers which the last government created some months ago, but nothing has happened. We should also cut overseas aid to countries not taking back their own nationals.

“This Labour government is too weak to take the steps necessary to protect our borders, and I see no sign of that changing any time soon.”

Ms Mahmood also suggested that the government could roll out digital ID as part of measures to prevent illegal working and reduce the “pull factors” that draw migrants to the UK.

While she has long been personally in favour of them, she said the government current position is to “look at” them, and she will be “discussing” the possibility of rolling them out with government colleagues.

Balance between human rights and securing borders

The home secretary also reiterated that the UK will not be leaving the European Convention on Human Rights (ECHR) – as Reform UK and some in the Tory party have called for – because that would have “other consequences that we think are not in our national interest”.

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Healey: Govt considering military sites for migrants

“We absolutely see the case for reform primarily in our domestic, legal framework, tightening up the rules,” she said.

“In the end, this is about how you strike the balance between human rights on the one hand, and securing our borders. I do think that that balance isn’t in the right place at the moment. That’s why we will come forward with changes to our domestic legislation and the guidance in terms of how we apply some of the convention rights legally here at home.”

She added that she will continue work she started in her previous post of justice secretary to reform the convention and ensure it is “fit for purpose in the modern era”.

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Jeremy Corbyn: ‘Why are we demonising refugees?’

Ms Mahmood’s comments come on her third day in her new role of home secretary, which she was given in a wide-ranging cabinet and ministerial reshuffle, triggered by the resignation of Angela Rayner as housing secretary and deputy prime minister on Friday, after admitting to underpaying stamp duty on a new property.

There was a clear out of the ministerial team in the Home Office, with new ministers brought in as the government seeks to get a grip on small boat crossings and close asylum hotels amid protests.

Dover MP Mike Tapp – a strong proponent of taking tough measures to break up criminal gangs and stop boats landing on British shores – is one of those MPs who has been given his first ministerial role in the Home Office.

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Labour deputy leadership contest: Who could stand to replace Angela Rayner?

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Labour deputy leadership contest: Who could stand to replace Angela Rayner?

While new department cars rock up at houses today to pick up new ministers giddy to get into government, other Labour MPs will have their minds elsewhere as another big race for a big role in the Labour Party gets under way.

After Angela Rayner’s sudden departure from the government for failing to pay enough stamp duty, she now leaves a hole at the top of the party as deputy leader – an elected position by the membership which means a full leadership contest will have to begin, and fast.

Politics latest: Home secretary rules out standing for deputy leader

Candidates will probably have to decide today whether they are going to put their names in the mix.

So, who could throw their hat into the ring?

David Lammy – the ‘makes sense’ candidate

This would be a neat little way to solve the problem for the government and an attempt to try to kick it back to the status quo.

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Sir Keir Starmer appointed the former foreign secretary as deputy prime minister in the government during his reshuffle at the weekend, and if he won, he would effectively occupy the same role Ms Rayner had, being both the PM’s elected deputy, as well as the members’ choice.

He is London-born to Guyanese parents in Tottenham, where he is still an MP. He went on to be the first black Briton to attend Harvard Law School, and in a Tony Blair government he was seen as a rising star when he became a junior minister.

From the backbenches, he then became outspoken on issues around race and social justice, but since returning to the front bench, has softened his language around Trump, and he apologised for nominating Jeremy Corbyn as Labour leader back in 2015. In 2016, he was commissioned to lead a review into racial disparities in the justice system.

Dame Emily Thornberry

The Foreign Affairs Committee chair has lived many lives. Born to an academic and teacher, she moved into a council house at seven years old when her parents divorced.

She later became a lawyer specialising in human rights law, and became an MP in 2005 – elected initially from an all-women shortlist. That might be helpful, as inside the Labour Party, it’s widely thought that Ms Rayner’s replacement should be a woman.

While she’s had many roles in opposition – shadow energy minister, shadow attorney general, shadow defence secretary, and shadow foreign secretary – she is probably most known for a controversial tweet. Whilst serving in Ed Miliband’s shadow cabinet, she was forced to resign in 2014 following a picture she posted of an England flag while campaigning in the Rochester and Stroud by-election.

Richard Burgon – the left candidate

With Sir Keir faring badly in the polls, some in the party think this member-led vote could be a way to show their discontent with the prime minister and his government by selecting a staunchly left-wing candidate. Richard Burgon has already been making noises about a potential bid, tweeting how he sees the role of deputy playing out.

The Leeds MP has been a constant pain for the government. A firm left-wing candidate, he has been vocal over Gaza, the winter fuel U-turn, the government’s welfare bill, and he temporarily lost the Labour whip after voting against the government over the two-child benefit cap.

His appointment would be a coup for the left, who have been crushed by Sir Keir since he came to power in 2020. But remember – Rayner’s power came from the fact that she wasn’t just deputy leader, but also deputy prime minister, and had a long-established line into No 10, meaning she had genuine influence.

If the winner is not from the leader’s faction of the party, then the new deputy could be sidelined again.

How will the deputy leadership election work?

The Labour Party rule book sets out how candidates can get on the ballot to stand in the election for deputy party leader.

Each nominee must be a sitting member of the Parliamentary Labour Party (a Labour MP), and must be supported by 20% of their fellow members, which currently equates to 80 Labour MPs.

The deadline set by the party’s governing body to gather the required nominations is 5pm on Thursday 11 September.

After that, candidates must win the support of either:

• 5% of Constituency Labour Parties (CLPs), which are local party groups;

• At least three organisations affiliated to the party – at least two of which must be trade unions – that comprise 5% of the affiliated party membership.

This process will start on Saturday 13 September, and close on Saturday 27 September.

The successful candidates will then appear on the ballot for a vote of all party members and affiliated party supporters, which will open on Wednesday 8 October, and close on Thursday 23 October at 12pm.

The winner will be announced on Saturday 25 October.

Who else could throw their hat in the ring?

Other names being touted (some without their knowledge) are former development minister Anneliese Dodds, Dawn Butler, and Miatta Fahnbulleh.

Ms Dodds has bolstered her integrity credentials inside the party since resigning over principles and not in disgrace after the international aid budget was cut. She also has a forensic knowledge of the internal workings of the Labour Party and, as a former women and equalities minister, has broad appeal within the party.

Dawn Butler has previously expressed an interest in replacing Sadiq Khan as London mayor, but she’s already tweeted today about how she could pivot to other positions – so one to watch.

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The 2024 intake is also a large and unpredictable group. They’ve flexed their muscles before over the welfare rebellion, proving not only their ambitions, but their soft left leaning credentials too, even surprising the prime minister. Could they galvanise and organise a candidate between themselves in the time to nominate?

The deputy position is an elected position that will eventually go out to the wide membership, but MPs need to first get 80 nominations from their own MPs.

At midday today, the Labour Party’s National Executive Committee (NEC) will have a full meeting to agree a timetable and code of conduct for a deputy leadership contest. And because of the London Tube strikes, it will be a digital meeting.

So expect lots of organised high-speed dating-style coffees in Portcullis House, and hushed conversations in corridors today – or more likely the unending WhatsApp groups with disappearing messages.

The sudden nature of this contest, coupled with the speed at which it has to happen, means really anyone now has a shot.

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SEC approval of listing standards can mainstream crypto ETFs

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SEC approval of listing standards can mainstream crypto ETFs

SEC approval of listing standards can mainstream crypto ETFs

The SEC’s proposed generic listing standards could streamline crypto ETF approvals from 240 days to just 60-75 days, opening doors for altcoin funds.

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