Thailand’s Incoming Prime Minister Signals Crypto Embrace

China has provided insights into the conviction of Zhao Dong, the influential crypto over-the-counter (OTC) trader and widely known founder of the RenrenBit crypto trading desk. The ‘OTC King’Last Wednesday, China’s Supreme Procuratorate disclosed that Zhao, known as the "OTC King," was handed down a substantial prison sentence for engaging in illegal foreign exchange and crypto business operations. The case is emblematic of China's persistent efforts to clamp down on cryptocurrency trading, even when conducted through less transparent channels like OTC desks, private chat groups and stablecoins.Photo by Hanson Lu on UnsplashTracing fundsIn their comprehensive disclosure, the Chinese authorities outlined the meticulous investigation that led to Zhao Dong's conviction. The focus was on tracing fund movements across Chinese bank accounts, overseas cash pools and the circulation of Tether and Bitcoin. Investigators honed in on accounts associated with Zhao Dong and the chat groups used for trading activities. Their arsenal included detailed bank records, WeChat conversations, testimonies from Zhao's OTC agents and other documentary evidence. The report highlighted that all defendants, including Zhao Dong, confessed to the process of collecting dirhams in cash in Dubai, paying RMB to the other party's designated account, buying Tether with dirhams, and allowing the domestic gang to illegally sell it back for RMB. Seven year sentenceIn one of the alleged schemes, Zhao Dong purportedly orchestrated crypto-fiat trades between Dubai-based entities holding cash piles in United Arab Emirates (UAE) dirhams and Chinese contacts within the country. With numerous related recipients confirming that the funds Zhao received were payments from foreigners, the prosecution's case was made so much stronger. Zhao unsuccessfully argued during three public court hearings that his actions constituted digital currency transactions and not a breach of foreign exchange laws. The prosecution countered with evidence from the group's chat records, emphasizing the nature of foreign exchange in their dealings. The court ultimately rendered a verdict, sentencing Zhao Dong to seven years in prison and imposing a 2.3 million Chinese yuan ($325,000) fine. This conviction serves as a stark reminder of the stringent regulatory stance that China has adopted towards cryptocurrency trading. Zhao Dong was considered one of China's most influential OTC crypto traders. He was a Bitfinex shareholder and founder of the D Fund venture capital fund. He established RenrenBit in August 2018, incorporating the company in Singapore. The influential crypto trader is also believed to have been involved in assisting stablecoin-issuer Tether to launch its Tether Yuan product. However, once the authorities moved against him, RenrenBit was taken offline while Tether scrapped its pursuit of Tether Yuan. Despite his influence, Zhao has ultimately become a symbol of the government's commitment to curbing such crypto trading activities within mainland China. The outcome underscores the severity of China's regulatory crackdown on cryptocurrency trading and sends a strong message to other players in the crypto space within the country.

US DOJ Charges Two Russians With Mt. Gox HackTwo Russian nationals have been charged by the US Department of Justice (DOJ) for their involvement in hacking of the Japanese cryptocurrency exchange Mt. Gox, and in causing the collapse of the infamous exchange.Photo by Tingey Injury Law Firm on UnsplashCulpable for collapseThe indictment, which has been unsealed, was originally filed on June 7, and identifies the individuals as Alexey Bilyuchenko, 43, and Aleksandr Verner, 29. They are accused of not only hacking the exchange but also conspiring to launder approximately 647,000 bitcoins, which is valued at around $17.1 billion based on Bitcoin’s unit price on Friday.Additionally, Bilyuchenko has been charged with collaborating with Alexander Vinnik to operate the illicit exchange known as BTC-e between 2011 and 2017. BTC-e was shut down by U.S. law enforcement in 2017, and Vinnik was later extradited from Greece to the U.S. in 2022 on charges of running BTC-e and engaging in money laundering.Mt. Gox, which experienced a major theft, declared bankruptcy and closed its operations in 2014. Bilyuchenko and Verner played a significant role in the theft, leading to the exchange’s insolvency, according to Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. The indictment states that “in or about September 2011, [the defendants] and their co-conspirators gained and caused others to gain unauthorized access to the Mt. Gox server in Japan.”BTC-e exchange money launderingFurthermore, it is alleged that Bilyuchenko utilized his ill-gotten gains from the Mt. Gox theft to establish the BTC-e exchange, which facilitated global money laundering activities for criminals. US Attorney Ismail J. Ramsey for the Northern District of California stated that Bilyuchenko and his co-conspirators operated a digital currency exchange that enabled criminal entities, including hackers, ransomware actors, narcotics rings, and corrupt officials, to launder billions of dollars.In March, there were reports from CoinDesk about movements of BTC-e funds on the blockchain. An exchange wallet linked to BTC-e made its first transaction since 2017, transferring approximately 3,299 bitcoins to a crypto wallet in November 2022. Additionally, six years ago, the exchange wallet sent around 10,000 bitcoins to two unidentified recipients. However, the recent DOJ filing does not specify whether these recipients were Bilyuchenko and Verner.Slow processMeanwhile, the long-suffering creditors of the hacked exchange are only beginning to reach the final stages of the bankruptcy process. Japan’s bankruptcy process is incredibly slow and it’s taken the best part of ten years for it to reach the distribution phase. It became apparent in April that the bankruptcy estate was moving to distribute $4.5 billion in cash and digital assets to creditors. It’s understood that the process will be completed in October.While creditors are taking a haircut in bitcoin terms, on a US dollar basis, they are not fairing out badly given that the leading cryptocurrency has seen massive dollar price appreciation in the intervening years.

Hong Kong last week entered the pilot phase of Project Ensemble, an initiative focused on developing infrastructure for a tokenized market and creating a sandbox where institutions can test blockchain systems in real business environments. Set to run through 2026, the pilot involves the Hong Kong Monetary Authority (HKMA), several banks, and other industry participants. Its early work will examine how tokenized deposits can be used in money market fund transactions and how these tools might support real-time liquidity and treasury management. Interoperability key to tokenizationCommenting on the development, Hong Kong Securities and Futures Commission (SFC) CEO Julia Leung said, “To scale tokenisation of investment products, interoperability is key.” She added that the measure announced on Nov. 13 by the HKMA “will gradually allow interbank settlement of tokenised deposits in real time 24/7.”Photo by Ibrahim Rifath on UnsplashFollowing the HKMA’s announcement, Ant International, the global arm of Ant Group, revealed that it is joining Project Ensemble’s Architecture Community. As part of this digital finance effort, Ant International will help design and advance the tokenization ecosystem in the special administrative region, contribute to defining industry standards, and support broader industry adoption. Corporate initiatives in digital financeSeparately, Ant International also signed a memorandum of understanding with Swiss bank UBS to explore new opportunities in tokenized deposits, leveraging Ant’s blockchain platform Whale. Under this partnership, UBS Digital Cash, a blockchain-based payment solution developed by UBS, will be used to support Ant International’s global treasury operations. Young Jin Yee, Co-Head UBS Global Wealth Management Asia Pacific and Country Head UBS Singapore, said the collaboration with Ant aims to achieve “a real-time, multi-currency payment solution that sets standards for transparency and efficiency.” Hong Kong has been seeing a noticeable pickup in crypto-related activity more broadly. According to a post on X by Unfolded, AMINA, a Swiss-regulated institution, is now the first international banking group to roll out full crypto trading and custody services in Hong Kong. Adding to this momentum, companies are stepping up their Bitcoin accumulation. In its third-quarter results announcement, Boyaa International, a Hong Kong–listed firm specializing in online card and board games, reported a quarter-over-quarter increase of 738 Bitcoin. As of Sept. 30, its total holdings stood at 4,091 Bitcoin at an average cost of about $68,114 per coin. Adoption trends and market contractionThis push into the crypto sector aligns with broader digital asset adoption across Asia. A recent survey by CoinDesk and Protocol Theory of 4,020 individuals aged 18 to 64 in 10 Asian countries found potential crypto ownership of around 25% among respondents with internet access. The survey also noted that roughly half of adults familiar with crypto plan to use it within the next year or so. Despite the uptick in activity and interest, the market itself is currently in a downturn, with Bitcoin falling below the $90,000 mark on Nov. 18 for the first time since April 22. Analyzing the move, CoinDesk’s Omkar Godbole said Bitcoin looks oversold, as the 14-day relative strength index (RSI) has slipped under 30, indicating the drop may be steep enough to trigger a pause or a possible rebound. Godbole drew a parallel with price action earlier in the year, noting that February was the last time the RSI fell below 30, when Bitcoin was trading under $80,000. After that decline, the market bottomed out at around $75,000 in April, a pattern that traders may be watching closely as they assess the current pullback. At the time of publication, Bitcoin was trading around $90,400 against USDT on Binance.