Australia’s $145M exchange scandal, Bitget claims 4th, China lifts NFT ban: Asia Express
Our weekly roundup of news from East Asia curates the industry’s most important developments.
Largest money laundering scandal in Australia unravels
Changjiang Currency Exchange, a money transmitter business based in Australia, has beenbustedin a $145 million ($230 million Aussie dollar) money laundering scandal.
On October 26 a 300-strong police operation spanning Melbourne, Sydney, Brisbane, Adelaide, and Perth arrested seven individuals — four Chinese citizens and three Australian nationals, after a 14-month investigation.
Operating under the front of a legitimate currency exchange business, police say that Changjiang Currency Exchange allegedly helped launder dirty funds and tainted cryptocurrency from investment scams and unregistered crypto exchanges.
In one single incident, a 37-year-old Chinese national was accused of using Changjiang’s services to launder $63 million (A$100M) worth of funds received from a multinational Ponzi scheme.
The investigation began after law enforcement officials noticed irregular traffic at Changjiang kiosks across Australia during a time of strict COVID-19 related lockdowns. Police have since seized $13.27 million (A$21M) in cash and various luxury items believed to have been purchased using proceeds of crime. The investigation remains ongoing.
Bitget’s colorful Q3
Crypto derivatives exchange Bitget has risen to become the fourth-largest by volume, trailing behind only that of Binance, OKX, and ByBit.
According to the October 20 report, Bitget claims that its market share has risen to 9.43%, compared to negligible volume just two years ago. During Q3 2023, the exchange says it onboarded over 9,000 traders along with 85,000 followers or copy-traders, who together achieved a net trading profit of $6.7 million. However, the combined industry trading activity fell by 23% year over year to $4.8 trillion in the quarter.
From July to September, Bitget’s user protection fund peaked at $368 million and now stands at $350 million. The exchange claims that it has no debt alongside a proof-of-reserves ratio exceeding 200%. In September, the firm launched a $100 million EmpowerX Fund dedicated to ecosystem development and hosted a namesake summit in Singapore. It also hired 60 staff in July for its Middle East expansion plans.
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China partially lifts bans on NFTs
After a year of harsh crackdowns on private blockchain enterprises, it appears that China has softened its stance somewhat.
According to local news reports on October 25, Xianyu (literally ‘Bored Fish’), Chinese internet conglomerate Alibaba’s flagship peer-to-peer marketplace, has removed its censorship of “nonfungible tokens” related keywords in its search tool and relisted Topnod NFT collectibles minted on Alibaba’s Ant Blockchain.
Due to regulatory uncertainty, Topnod digital collectibles were prohibited from listing on secondary markets. Last December, Cointelegraph reported the Chinese government’s official NFT trading platform was planned to launch this year. The exchange is still in development at the time of publication. Since 2021, China has officially banned almost all crypto-related activity saved for outright ownership of cryptocurrencies.
Blockchain connects interprovincial health insurance in China
Residents of Shanghai, Zhejiang, Jiangsu, and Anhui provinces can now submit and validate their health insurance claims using blockchain technology.
In a partnership with Alibaba’s Ant Insurance, users in the aforementioned regions can submit their claims online, and after blockchain verification for authenticity, receive their reimbursement within hours.
In one instance, an individual known as Mr. Wang submitted his claim for lung cancer treatment in Anhui, and received the full $17,800 (130,000 Chinese Yuan) reimbursement within two hours. Su Fang, Director of the Financial Insurance Institute of Shanghai University of Finance and Economics, commented:
“This time, all electronic financial and medical bills in the Yangtze River Delta have been opened and applied on a large scale in commercial insurance claims, marking the true application of the digital Yangtze River Delta construction. This not only brings real convenience to the people, but also improves the efficiency of insurance claims and effectively prevents moral hazard.”
Ant Insurance has operated a blockchain-powered claims portal since 2019. For the past four years, the platform has processed over 2.25 billion medical claims and improved information sharing between insurance providers and medical professionals.
Huaian uses blockchain to improve surveillance
The City of Huaian’s Jianpu People’s Court is using a combination of AI recognition, big data, and blockchain technology to improve law enforcement surveillance.
Starting October 25, the Jianpu People’s Court will create an “all-purpose” system for monitoring visitors entering and leaving court premises. As soon as a visitor is identified to be trespassing in an unauthorized area, the system will alert court bailiffs for their immediate apprehension. Officials say that the system can drastically reduce the patrolling of hard-to-monitor areas:
“Outside the court walls and in the public rest areas outside the courtroom of the main building, etc., intelligent behavior analysis technology can be used to capture and intelligently analyze the behavior of the parties, provide early warning of possible dangerous behaviors such as abnormal gatherings, strenuous exercise, fights, etc., and remind judicial police and other staff to pay attention and deal with it promptly and appropriately.”
Through the system, court bailiffs would gain access to all visitors’ movements and details within court premises. Augmented reality will also enhance hard-to-see areas for better resolution.
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According to the US Department of Justice, Wolf Capital’s co-founder has pleaded guilty to wire fraud conspiracy for luring 2,800 crypto investors into a Ponzi scheme.
Making Britain better off will be “at the forefront of the chancellor’s mind” during her visit to China, the Treasury has said amid controversy over the trip.
Rachel Reeves flew out on Friday after ignoring calls from opposition parties to cancel the long-planned venture because of market turmoil at home.
The past week has seen a drop in the pound and an increase in government borrowing costs, which has fuelled speculation of more spending cuts or tax rises.
The Tories have accused the chancellor of having “fled to China” rather than explain how she will fix the UK’s flatlining economy, while the Liberal Democrats say she should stay in Britain and announce a “plan B” to address market volatility.
However, Ms Reeves has rejected calls to cancel the visit, writing in The Times on Friday night that choosing not to engage with China is “no choice at all”.
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The chancellor will be accompanied by Bank of England governor Andrew Bailey and other senior executives.
She will meet with her counterpart, Vice Premier He Lifeng, in Beijing on Saturday to discuss financial services, trade and investment.
She will also “raise difficult issues”, including Chinese firms supporting Russia’s invasion of Ukraine and concerns over constraints on rights and freedoms in Hong Kong, the Treasury said.
But it did not mention whether Ms Reeves would raise the treatment of the Uyghur community, which Downing Street said Foreign Secretary David Lammy would do during his visit last year.
Britain’s Foreign Secretary David Lammy and Chinese Foreign Minister Wang Yi in Beijing. Pic: AP
On Friday, Culture Secretary Lisa Nandy defended the trip, telling Sky News that the climbing cost of government borrowing was a “global trend” that had affected many countries, “most notably the United States”.
“We are still on track to be the fastest growing economy, according to the OECD [Organisation for Economic Co-operation and Development] in Europe,” she told Anna Jones on Sky News Breakfast.
“China is the second-largest economy, and what China does has the biggest impact on people from Stockton to Sunderland, right across the UK, and it’s absolutely essential that we have a relationship with them.”
Read more – Ed Conway analysis: The chancellor’s gamble with China
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Nandy defends Reeves’ trip to China
However, former prime minister Boris Johnson said Ms Reeves had “been rumbled” and said she should “make her way to HR and collect her P45 – or stay in China”.
While in the country’s capital, Ms Reeves will also visit British bike brand Brompton’s flagship store, which relies heavily on exports to China, before heading to Shanghai for talks with representatives across British and Chinese businesses.
It is the first UK-China Economic and Financial Dialogue (EFD) since 2019, building on the Labour government’s plan for a “pragmatic” policy with the world’s second-largest economy.
Sir Keir Starmer was the first British prime minister to meet with China’s President Xi Jinping in six years at the G20 summit in Brazil last autumn.
Relations between the UK and China have become strained over the last decade as the Conservative government spoke out against human rights abuses and concerns grew over national security risks.
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How much do we trade with China?
Navigating this has proved tricky given China is the UK’s fourth largest single trading partner, with a trade relationship worth almost £113bn and exports to China supporting over 455,000 jobs in the UK in 2020, according to the government.
During the Tories’ 14 years in office, the approach varied dramatically from the “golden era” under David Cameron to hawkish aggression under Liz Truss, while Rishi Sunak vowed to be “robust” but resisted pressure from his own party to brand China a threat.
The Treasury said a stable relationship with China would support economic growth and that “making working people across Britain secure and better off is at the forefront of the chancellor’s mind”.
Ahead of her visit, Ms Reeves said: “By finding common ground on trade and investment, while being candid about our differences and upholding national security as the first duty of this government, we can build a long-term economic relationship with China that works in the national interest.”
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