Asia Express – Cointelegraph Magazine

06/20/2024

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2024.06.20 20:39

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

Fake altcoin delisting rumors cause panic in Korean markets

Roughly half of the altcoins listed on major Korean exchange Upbit have plunged between 10% to 20% in the past week amid rumors of an impending, but so far non-existent, regulatory crackdown.

As reported by ebn.co.kr, investors panic sold after seeing the widespread dissemination of fake news that “financial authorities will quarterly review 600 domestic virtual assets from next month and suspend trading of coins that do not meet listing maintenance standards.”

However, the country’s Financial Supervisory Service has since stated that it would not directly monitor any altcoin listing reviews:

“The financial authorities do not directly review the items but inspect the virtual asset businesses. We participated in the creation of best practices due to a request for support, but the announcement will be made by the exchanges and DAXA (Digital Asset eXchange Alliance).”

Korea’s new virtual asset rules will kick in next month, which, in part, requires the country’s 29 registered crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, to regularly evaluate the tokens listed on their exchanges and whether to continue supporting their trading.

Industry experts have since clarified that the items in the new guidelines, such as “circulation plan violations or unidentified hacking incidents,” are “not significantly different from before.”

Asia Express – Cointelegraph Magazine

Binance introduces loyalty rewards for BNB holders

Crypto exchange Binance is set to reward its most loyal BNB token holders with airdrops for holding on for dear life through the company’s ups and downs.

“Users who hold BNB for a long time will receive benefits, and Hodler’s projects will be distributed to BNB holders,” wrote the exchange’s co-founder, Yi He, on June 19. “The statistical time is not based on the future holding logic, but on how long you held BNB in retrospect. We work for BNB Holders!”

Exchange staff said that Binance HODLer Airdrops are designed to benefit users who invest in Simple Earn products with their BNB holdings. “This program will airdrop tokens from projects with a substantial token supply that are set to list on Binance soon,” developers explained.

The program will encompass small to medium-sized projects that possess strong fundamentals, a significant circulating supply, and vibrant, organic communities.

To participate, users must subscribe to Simple Earn products, both Flexible and Locked, using their BNB holdings and ensure their account is verified (KYC) from an eligible jurisdiction. Airdropped tokens will then automatically be transferred to users’ Spot Wallets before the token lists on the exchange.

During Binance’s early days, when it was still based out of China, the exchange raised $15 million in a BNB initial coin offering (ICO) in July 2017. The token has since returned 402,159% to date and currently trades at $601.74 apiece at the time of publication.

After CZ's outing, Binance co-founder Yi He, who also happens to CZ's spouse, has taken an increased leadership role in the world's largest crypto exchange. (X) After CZ’s outing, Binance co-founder Yi He, who also happens to CZ’s spouse, has taken an increased leadership role in the world’s largest crypto exchange. (X)

Hong Kong’s zero tolerance for unlicensed crypto exchanges

Hong Kong regulators have become more and more stringent on crypto entities operating in the East Asian city after the collapse of two unlicensed entities, JPEX and Hounax, last year that left investors hundreds of millions of dollars out of pocket.

In the Securities & Futures Commission’s annual report, regulators disclosed that out of 23 virtual crypto exchange license applications it received, just two were approved — HashKey and OSL. In addition, the two approved exchanges received 234 in-person visits from SFC staff within the past year, to ensure compliance.

On May 31, Hong Kong officially kicked out all unlicensed crypto exchanges, requiring that all platforms which have not applied for an operational license with the SFC to cease operations in the region immediately.

“It is a criminal offense to operate a VATP in Hong Kong in breach of the AMLO [Anti-Money Laundering and Counter-Terrorist Financing Ordinance], and the SFC will take all appropriate actions against any breaches of the law,” regulators warned.

Spot Bitcoin ETF hype wanes

It appears that investors’ enthusiasm for Bitcoin ETFs around the world has hit a standstill.

On June 20, The first Bitcoinexchange-traded fund (ETF) approved for Australia’s leading stock exchange, the Australian Securities Exchange, closed its first day of trading with just $1.3 million in trading volume.

Australia has about one tenth of the population of the US, so a rough conversion would make that equivalent to about $10 million inflows. However, Australia has two Bitcoin ETFs listed on alternative exchange CBOE and such products have been available since 2022.

“Notwithstanding the Australian market being a lot smaller than the U.S. and most of our flow being retail rather than institutional, there is a possibility that we may follow a similar path,” VanEck deputy head of investments and capital markets Jamie Hannah told Cointelegraph.

Back in April, the first spot Bitcoin and Ether ETFs listed in Hong Kong did around $12 million in trading volume on day one, which was in itself dwarfed by the billions of dollars in trading volumes from U.S. spot Bitcoin ETFs’ debut in January.

All eyes are now on the Ethereum ETFs in the US, which, after their surprise approval by the U.S. SEC, are slated for a July 2 launch. Eric Balchunas, senior ETF analyst Bloomberg, noted the SEC’s staff comments on the spot Ether ETF applicants’ S-1 applications were “pretty light, nothing major,” and asked for them back within the week.

Even in U.S. markets, investors have increasingly pulled their assets away from Bitcoin ETFs. (Farside)

Future of crypto in Hong Kong looks bright

David Wu, CFO of Hong Kong crypto exchange OSL, sees Hong Kong as a global financial center able to experiment with innovative crypto asset products. Wu stated:

“Different investment projects can raise funds in Hong Kong through debt issuance or stock offerings. Besides these traditional methods, companies could issue security token offerings (STO) in Hong Kong, providing an alternative to mainstream fundraising methods.”

Wu talked up the East Asian city’s “low tax rates, clear legal systems, and comprehensive investor protection” in contrast to other countries in Asia. “Institutional investors in virtual assets have faced difficulties opening accounts. For example, many large banks in Japan refuse to open accounts for such funds,” Wu explained. “However, Hong Kong banks are open to it, with many Chinese banks welcoming institutions specializing in virtual asset investments to open accounts.”

Currently, Hong Kong’s crypto exchange licenses allow both cryptocurrency and tokenized asset trading with neither features being available in other financial hubs such as Singapore and the U.S. The SFC is currently considering protection initiatives, anti-money laundering, and hacker prevention, as well as actively exploring policy formulation to further enhance Hong Kong’s advantages in the virtual asset market.

OSL CFO David Wu. (Linkedin)

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Asia Express – Cointelegraph Magazine

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.