BSN Foundation launches in Singapore with five global members

Boyaa Interactive Greenlights $5 Million Investment in Bitcoin and EtherBoyaa Interactive International Limited, a Hong Kong-based investment holding company with a track record in developing online chess, card, and puzzle games, has made a strategic move with a proposed investment in digital assets.The company’s board of directors has recently given the green light for the allocation of a substantial budget amounting to $5 million for the purpose of acquiring cryptocurrencies.Photo by Traxer on UnsplashWeb3 positioningThe Chinese company, incorporated in the Cayman Islands, announced the move as Boyaa Interactive seeks to position itself for a dynamic shift into the realm of Web3.While the exact allocation breakdown was not detailed in the disclosure, the company outlined that its primary focus would be on procuring established cryptocurrencies, specifically Bitcoin (BTC) and Ether (ETH). Boyaa Interactive intends to execute these purchases through regulated and licensed trading platforms within the upcoming year.In a letter addressed to its shareholders and potential investors, the company emphasized the strategic nature of this decision:“The purchases of cryptocurrencies are for the consideration of the Group’s future business layout into the field of Web3. The Board is of the view that the purchases of cryptocurrencies (including mainly Bitcoin (BTC) and Ether (ETH)) by the Group are in the interests of the Company and its shareholders as a whole.”A challenging recent historyThe move towards cryptocurrencies is a significant pivot for Boyaa Interactive, a company that has navigated a series of challenges in recent years. In 2018, the company’s Chairman and CEO, Zhang Wei, faced legal troubles and was sentenced to 12 months in prison for bribery, which led to his resignation from all executive and management positions.Subsequent restructuring saw Dai Zhikang stepping in as the new Chairman of the board, while Tao Ying assumed the role of an Executive Director and Chairman of the Nomination Committee.Financially, Boyaa Interactive experienced a tough period marked by revenue contraction. The company reported revenue declines over the course of 2018, largely attributed to a governmental crackdown on online poker applications and the discontinuation of poker as a recognized competitive sport. Regulatory risks stemming from the Chinese government’s stance on Texas Hold’em poker games resulted in a substantial falloff in revenue by comparison with past performance.Funds seizureThese challenges cascaded into the following year, when the company encountered a substantial freeze on its funds. In 2019, a Chinese court ordered the freezing of RMB 635 million (approximately $88.6 million) belonging to Boyaa Interactive, following the legal actions against Zhang Wei and his associated entities.One of the company’s subsidiaries, Boyaa Shenzhen, was found guilty of offering bribes. The company responded by clarifying that the frozen funds could potentially be confiscated if linked to Zhang’s misconduct. However, Boyaa Interactive also stressed that it had not been directly implicated in the case, thus mitigating the legal risks to the broader organization.Amidst these adversities, Boyaa Interactive’s decision to invest in cryptocurrencies demonstrates its openness to adapting to changing technological landscapes and exploring new opportunities in Web3.

Hong Kong Deems Crypto as PropertyIn dealing with a case involving defunct Hong Kong-based cryptocurrency exchange Gatecoin, a Hong Kong judge has determined cryptocurrency as being property “capable of being held in trust.” Presiding over the case, Justice Linda Chan stated recently that Hong Kong takes a broad definition of what constitutes property.©Pexels/mitbg000Digital assets held in trustHaving expended efforts to try and recover funds from a former payments service provider that the company had partnered with, Gatecoin announced that it would shut down the business and commence the liquidation of the business in 2019. With bankruptcy proceedings being notoriously slow, that process continues today, resulting in Justice Chan’s recent determination.The notion of property held in trust is a common theme that has been explored in a number of cryptocurrency business bankruptcy processes recently, including the BlockFi, Celsius and FTX processes.Gatecoin has not proven to be any different in this regard. Liquidators had turned to the Hong Kong courts for direction as to how creditors’ digital assets, as held on the platform, should be defined. If property is deemed to have been held “in trust”, then that determination has implications for the owner of those assets relative to the bankruptcy proceedings.In the case of BlockFi, a determination was made in a US court that those who had simply custodied digital assets with the platform without earning any yield were property owners and that they should have their assets returned.The importance of Terms of Service (ToS)Alex Mashinsky, the founder and CEO of failed crypto lending competitor Celsius outlined to service users on a number of occasions that the assets remained their property even though his company used customer assets for various trading activities. The bankruptcy judge reached a different determination based on the terms of service. Service users had acknowledged in signing off on Celsius’ terms of service that assets held on the platform that accessed yield-bearing products became the property of Celsius when deposited within those products on the Celsius platform.Although it has not been dealt with yet, 1.4 million creditors relative to the bankruptcy process of failed cryptocurrency exchange FTX are likely to discover later this year if they can claim “in trust” property rights. An ad hoc group of creditors has taken legal action for the return of their digital assets on the basis of an assertion that the assets remained their property when transferred onto the platform.ImplicationsWhilst a seemingly uninteresting determination to anyone less informed about such bankruptcy proceedings, such decisions can have profound consequences. In a bankruptcy process, there is a hierarchy of creditors, with some having greater rights than others when it comes to the distribution of bankruptcy estate funds. Recognition of assets being held in trust as property would likely take those property owners out of the bankruptcy process, allowing the return of their funds (where available) while others who are classified as creditors get a distribution of whatever funds are left in the bankruptcy estate thereafter.Additional complexityGatecoin’s case was further complicated by the existence of various sets of terms of service. In two of the three instances, the court found that no trust language existed. There is one subset of creditors who may have the ability to claim their digital assets as property. The liquidators have agreed to identify them and contact them in that regard.While the process may be proving to be a minefield for Gatecoin’s creditors, it has served a broader purpose in crypto more generally as it has provided yet another opportunity for another jurisdiction, in this instance Hong Kong, to provide some more clarity with regard to the legal status and standing of cryptocurrency.

How will Binance’s criminal case affect its presence in South Korea?Binance, the world’s largest cryptocurrency exchange, has reached a settlement with the U.S. government to pay a fine of more than $4.3 billion after the exchange was accused of anti-money laundering (AML) and sanctions violations. Co-founder and CEO Changpeng Zhao also pleaded guilty to violating the Bank Secrecy Act, which requires financial institutions to submit documentation to prevent them from becoming mediums for criminal funding. Binance will thus be withdrawing completely from the U.S.Photo by Vadim Artyukhin on UnsplashNews of this incident has sparked keen interest within the South Korean crypto industry regarding the impact it could have on Binance’s presence and influence in the country.Murky future for Binance as Zhao resignsBinance allegedly failed to report transactions involving criminal entities such as terrorist groups, ransomware perpetrators and money launderers without implementing a system to prevent such crimes. In particular, organizations like the Izz ad-Din al-Qassam Brigades — the armed wing of the Palestinian militant group Hamas — as well as the Palestinian Islamic Jihad and ISIS were found to have utilized Binance as a channel for their funds. Furthermore, the exchange also facilitated transactions with users in sanctioned territories such as Iran, North Korea and Syria.Zhao has subsequently decided to step down as Binance’s CEO, taking to his X (formerly Twitter) account to state that he believes it is the right move. However, he also emphasized that the U.S. government did not accuse Binance of misappropriating user assets or engaging in market manipulation.Despite this fiasco, some insights have painted Binance’s future in a positive light. JPMorgan, the largest bank in the U.S., stated that the uncertainty surrounding Binance itself would diminish. “For crypto investors, the prospect of settlement would see the elimination of a potential systemic risk emanating from a hypothetical Binance collapse,” the bank said, according to an article published by digital asset news outlet The Block.GOPAX reaffirms partnership with Binance despite concernsGOPAX, a Korean fiat-to-crypto exchange that was acquired by Binance in February, also maintained a rather unexpected positive outlook. The acquisition had been followed by a complicated string of events hindering Binance’s full-fledged expansion in Korea, including delayed approval from the country’s Financial Intelligence Unit (FIU) to become a virtual asset service provider (VASP) and multiple leadership changes as a result.Investors in GOFi — GOPAX’s decentralized finance (DeFi) service — subsequently responded by filing a lawsuit at the end of June, claiming that financial authorities unjustly delayed the approval. They argued that, by approving the request, the FIU would enable Binance to provide the capital that GOPAX had struggled to gather to pay principal and interest payments on GOFi in the wake of last year’s FTX collapse.However, these circumstances did not sway GOPAX’s decision to work with Binance. “We learned of the news about Binance’s fine through articles from foreign media platforms,” GOPAX said. “Regardless, we are still in a business and technical partnership with the exchange.”Prospects for Binance’s landing in KoreaIn contrast to GOPAX’s seemingly positive outlook, the Korean crypto community has voiced mixed opinions about the effect of this development, especially on Binance’s successful entry into the domestic market.If GOPAX’s VASP approval had been delayed due to concerns about Binance’s suitability as its largest shareholder — incited by the legal risks it posed in the U.S. — the possibility of the approval going through may be more plausible as some of these risks have since been alleviated, said Yoon Seung-sik, an analyst at Seoul-based research firm Tiger Research.However, Jang Hye-won, an analyst at crypto data research platform Xangle, pointed out that interpretations may differ depending on the reasons behind FIU’s hesitation in approving the GOPAX acquisition. “If the concerns revolved around legal risks, then the path for Binance’s entry into Korea may seem cleared since those risks have been resolved. But if the concerns are about Binance’s capital inflow into the country, then this incident (Binance’s criminal case) will have no effect,” she explained.On the other end of the spectrum, some experts believe that this incident may have negatively affected the GOPAX acquisition. Hwang Suk-jin, a professor at Dongguk University’s Graduate School of International Affairs & Information Security and a member of the ruling People Power Party’s committee for virtual assets, stated, “Since criminal punishment for Zhao and the U.S. Securities and Exchange Commission’s (SEC) lawsuit are still pending, it’s hard to conclude that legal risks have been completely resolved. Binance paying a fine for money laundering may actually reinforce the FIU’s concerns about legal risks, making the GOPAX acquisition decisively unfavorable.”These statements come after a public opinion survey conducted earlier in June by Cratos, a Korean blockchain-based polling app, revealed that a 64.6% majority of respondents favored approving the GOPAX acquisition.