Crypto Exchange Bithumb’s Operator Closing Businesses

Singapore’s Regulator Imposes 9-Year Ban on 3AC FoundersSingapore’s central bank and financial regulator, the Monetary Authority of Singapore (MAS), has handed down a nine-year prohibition order to Kyle Davies and Su Zhu, co-founders of the failed crypto hedge fund Three Arrows Capital (3AC).Photo by Swapnil Bapat on UnsplashSevere restrictionsThe penalty relates to alleged violations of the city-state’s securities laws. The prohibition order came into effect on Wednesday, carrying severe restrictions for Davies and Zhu.During this nine-year period, Davies and Zhu are prohibited from engaging in any regulated activities in Singapore. They are also barred from managing, serving as directors, or holding substantial shares in any capital market services business within the territory of Singapore.Loo Siew Yee, the Assistant Managing Director of Policy, Payments, and Financial Crime at MAS, emphasized the seriousness of the violations in a statement released by the central bank on Thursday. Yee stated:“MAS takes a serious view of Mr. Zhu’s and Mr. Davies’ flagrant disregard of MAS’ regulatory requirements and dereliction of their directors’ duties.” She further asserted that MAS would take action against senior managers who engage in such misconduct.Securities law violationsMAS’s decision to impose these sanctions on the 3AC co-founders was based on its findings of further securities law violations during investigations into 3AC and its founders. The regulatory authority accused Davies and Zhu of failing to inform MAS when 3AC hired a new business representative, providing false information to the regulator, and neglecting to establish an appropriate risk management framework.3AC’s troubles stemmed from the crypto market crash that occurred last year, triggered by the Terra ecosystem’s collapse. The hedge fund’s leveraged crypto positions exposed it to billions in loan defaults, resulting in significant financial losses. Its lack of risk management had a cascading effect in crypto. Lenders like Celsius and BlockFi had exposure to 3AC, leading to further collapses later in 2022 as a consequence.3AC’s creditors claim that the firm owes as much as $3.5 billion, and liquidators are now seeking to recover approximately $1.3 billion from Zhu and Davies, who allegedly incurred the debt when the firm was already insolvent.Regulatory reprimandsThis action by MAS follows last June’s reprimand of 3AC, which occurred just before the hedge fund filed for bankruptcy amid widely reported insolvency issues. At that time, MAS had criticized 3AC for providing false information, failing to report directorship changes involving Zhu and Davies, and exceeding the legal assets under management threshold.It’s just the latest reprimand the duo have received from a regulator this year, though. Zhu and Davies have been busy in trying to get another start-up off the ground. Earlier this year, they launched OPNX, a crypto bankruptcy claims trading platform. The venture is based out of Dubai, and the firm reported in April that it had gotten significant VC backing.Many of those that the company claimed were backing the venture disassociated themselves from those claims. The following month, the Dubai regulator, the Virtual Assets Regulatory Authority (VARA), reprimanded the OPNX founders, having issued an investor alert relative to the firm a few weeks prior to that. VARA's complaint was that the business had been operating without having acquired the appropriate licensing.

With Thailand just having elected its youngest-ever Prime Minister (PM), speculation has arisen within the crypto sector as to whether the new appointee will be bullish where digital assets are concerned. On Sunday, 37-year-old Paetongtarn Shinawatra was sworn in as the Southeast Asian country’s Prime Minister, having received two-thirds of the votes in a House of Representatives ballot on Friday. On Aug. 18, a pseudonymous crypto commentator, @martypartymusic, told his 109,000 followers on X that Shinawatra’s appointment was positive for crypto. He wrote:”She is a crypto bull. Her father was a crypto bull. IMO: Thailand could be next to adopt crypto as legal tender. Let’s watch it play out."Photo by Evan Krause on UnsplashDigital wallet programShinawatra has committed to continuing a similar approach to policy as followed by her predecessor, Srettha Thavisin. That will include an emphasis on pursuing economic reform and accommodating economic stimulus measures.  One crypto-related measure introduced by her predecessor is the digital wallet handout project. According to Nikkei Asia, the scheme has been burdened with both legal and budgetary challenges. Kasit Piromya, a former Thai Foreign Minister, is understood to have said that Shinawatra would be committing “political suicide” if she continues to drive that project forward.  It’s understood that she has indicated that the government will continue with the project but that it plans to take steps to ensure that the program can proceed in a financially sustainable way. Shinawatra’s Pheu Thai Party had first floated the notion of giving 10,000 baht in digital assets, at the time valued at $300, in April 2023, to Thai citizens above the age of 16. Further moves were made to progress that $14 billion project earlier this year. While insiders have reported that Shinawatra has been non-committal about the digital wallet project, she has been quoted as stating previously that “the digital wallet scheme is a project we intend to use as a major economic stimulus.” As various commentators speculate on her likely course of action, the reality is that these matters will remain unclear until such time as she appoints a cabinet and announces relevant policies. Tanawat Sutunthivorakoon, the CEO of Thai digital asset management platform Bitazza Thailand, expressed the view that this change in leadership will have very little impact on the development of digital asset regulation in the Southeast Asian country. Regulatory developmentThe country has seen a number of crypto-positive developments over recent months. Back in March, the country’s tax authority approved a crypto income tax exemption in an effort to incentivize crypto-based fundraising. The authorities had already made crypto trading VAT-free the previous month. Earlier this month, Thailand’s Securities and Exchange Commission (SEC) introduced a digital asset regulatory sandbox in an effort to foster innovation relative to the digital assets sector. The SEC allowed institutional investors in Thailand to access U.S. spot Bitcoin exchange-traded fund (ETF) products. In June, the regulator followed up by approving the country’s first spot Bitcoin ETF.

Conflux Network, a layer-1, regulatory-compliant Chinese blockchain focused on borderless transactions, has announced the upcoming launch of the Conflux 3.0 mainnet together with an offshore yuan-pegged stablecoin, resulting in its native CFX token surging.Photo by Eric Prouzet on UnsplashPartnershipA notice published on the website of the Shanghai Municipal People’s Government on July 20 reported on the Conflux Tree Graph Technology and Ecological Development Conference, which was held in Shanghai over three days from July 18 to July 20. Over the course of the three-day event, the project announced a partnership with AnchorX, a Hong Kong-based fintech firm specializing in stablecoins, and Shenzhen-based Eastcompeace Technology.  The purpose of the initiative is to develop a stablecoin pegged to the offshore yuan (CNH), the version of China’s currency that circulates outside the mainland. The report outlined that in recent years, stablecoins and tokenized real-world assets (RWAs) have come to global attention.  Belt & Road InitiativeGiven this backdrop, it was outlined that “creating an independent and controllable high-performance public chain system” could be of great benefit to China and its Belt and Road Initiative (BRI), which sets out to develop infrastructure across 150 countries to facilitate trade with China. This is not the first point at which AnchorX has collaborated with Conflux. Back in February, the company received in-principle approval from the Astana Financial Services Authority (AFSA) in Kazakhstan to issue CNH-pegged stablecoins. Growing bilateral trade between Kazakhstan and China was cited as the rationale behind the license, given the need for cross-border payments. At the time, it was outlined that the AxCNH yuan-pegged stablecoin would be issued on the Conflux blockchain. It’s unclear if this same stablecoin is the focus of this latest development or whether an entirely new yuan-pegged stablecoin will be issued.AnchorX collaborated with Conflux in 2024 to bring about the issuance of AxHKD, a Hong Kong dollar-pegged stablecoin. The stablecoin runs on the Conflux blockchain, with the stablecoin issuer using OKLink Trust as its custodian. TokenPocket, a multi-chain crypto wallet project, also outlined on X on July 21 that it too is involved in the partnership with Conflux and AnchorX. The project outlined that it will support the growth of stablecoin adoption, the development of cross-border payment solutions and the promotion of tokenized RWAs in international markets through the collaboration.  Pilot projectsTokenPocket went on to explain that the companies plan to launch pilot projects in Central Asia, Southeast Asia and other regions, building “a compliant, secure, and innovative fintech framework to boost the role of the Conflux ecosystem as critical infrastructure for cross-border trade.” It was revealed at the conference that the mainnet release of Conflux 3.0 will occur in August. With the implementation of further optimized execution modules, the project expects 3.0 to result in a network throughput of 15,000 transactions per second (TPS).  These developments over the course of the weekend have had an impact on the unit price of Conflux’s native token, CFX. On July 19, the token was trading at around $0.1043. According to CoinMarketCap data, at the time of writing, it’s trading at $0.2232, a 2.58% increase over the past day.