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Chinese Official Gets Life Sentence on Crypto Mining-Related Corruption ChargesA former Chinese government official, Xiao Yi, has been handed a life sentence for engaging in illicit business activities connected to a $329 million Bitcoin mining venture, together with other unrelated acts of corruption, according to Cointelegraph.The Intermediate People’s Court of Hangzhou City declared the verdict on Tuesday, finding Xiao Yi guilty of corruption and abuse of power.Yi, previously associated with the Jiangxi Provincial Political Consultative Conference Party Group and holding the position of Vice Chairman, faced charges stemming from a range of offenses. The corruption allegations dated back to 2008 and extended till 2021, involving instances of bribery.Photo by Tingey Injury Law Firm on UnsplashAdditional abuse of power chargesSimultaneously, the abuse of power accusations spanned from 2017 to 2021 and centered around providing financial and electricity incentives to Jiumu Group Genesis Technology, a company headquartered in Fuzhou that once managed over 160,000 Bitcoin mining machines.Prosecutors contended that Yi took deliberate steps to conceal the extent of the mining operation. He was said to have directed relevant departments to falsify statistical reports and manipulate electricity consumption classifications. During the period between 2017 and 2020, the energy consumption attributed to Jiumu amounted to 10% of Fuzhou’s overall electricity usage.Moreover, Xiao Yi’s involvement in facilitating crypto mining activities as a Party Secretary of Fuzhou city between 2017 and 2021 led to significant losses to public property, national interests, and people’s interests. This underscores the broader consequences associated with his actions and their impact on the community.The court ruling disclosed: “Yi pleaded guilty and repented, actively returned the stolen funds, and all the bribes and their profits have been seized.”Crypto mining and trading prohibitionIn the context of China’s current cryptocurrency regulatory stance, all forms of cryptocurrency transactions, exchange operations, and fiat-to-crypto onboarding, together with crypto mining, are prohibited. However, direct ownership of cryptocurrencies is not explicitly banned. In a recent development on August 3, a Chinese court declared a $10 million Bitcoin lending contract null and void based on the nation’s Bitcoin restrictions, without the possibility of legal debt recovery.Another incident on August 14 led to the sentencing of a Chinese national to nine months in prison for facilitating the acquisition of Tether (USDT) by an acquaintance, earning a profit from the transaction.Xiao Yi’s case reflects the Chinese government’s ongoing efforts to enforce its stringent stance on cryptocurrency-related activities, including Bitcoin mining, which has garnered increasing attention due to its energy consumption and potential economic implications.Bitcoin mining was outlawed in China in 2021. Many of its miners left the country, establishing operations in places like Kazakhstan and in North America. However, it’s understood that there is still a significant level of mining activity ongoing in China despite the ban.The life sentence serves as a stark warning against illegal Bitcoin mining and financial misconduct, aligning with the Chinese government’s intention to maintain control over its financial sector and prevent unauthorized financial activities. The detailed revelations about Yi’s role in facilitating crypto mining activities highlight the broader implications of his actions on the public and national interests.

KCC sets guidelines for user protection on metaverse platformsThe Korea Communications Commission (KCC) has established its latest guidelines for ensuring the protection and safety of users of metaverse platforms, dubbed the “Basic Principles for the Protection of Metaverse Users”.Photo by GuerrillaBuzz on UnsplashNavigating the metaverse landscapeAlthough metaverse platforms can create new economic and business opportunities by linking reality with the virtual realm and providing users with a realistic and immersive experience, the agency argued that various problems may arise due to the use of anonymous profiles or avatars.In response, the KCC assembled six voluntary principles for metaverse service providers to apply to their operations through discussions with a policy advisory group for metaverse ecosystem user protection. The group is composed of 29 members, including academics, legal experts and domestic and overseas companies. It has been active since last year.Fostering ethical metaverse environmentsThe principles cover topics like ensuring free yet respectful communication between users; granting users a platform for voicing their opinions on issues related to their rights and interests; and ensuring that transactions involving digital products and services are conducted on proper terms. They also urge companies to give users the right to use and manage their own data along with that of the metaverse.On a less technical level, the last principle mentions that companies should make efforts to study the long-term impact of the metaverse on users’ physical and mental health, and on society, culture, environment and economy.The agency has also proposed to draft a code of practice outlining more specific measures to protect users, such as prohibiting sexual harassment and stalking, reporting and punishing cyberbullying and transferring the right to purchase NFTs.Responsible governanceMajor metaverse platform operators like Naver, SKT and Meta, who are members of the agency, agreed to apply the guidelines and include them in their relevant terms and conditions documents and service operation regulations. The KCC stated that it plans to monitor whether or not these commitments are met.Although not mandatory, the guidelines are recommended as measures to resolve user inconvenience, enhance service reliability and provide standards for user protection. User protection includes that of children, adolescents and personal privacy.

Komainu Partners with Copper to Enable Off-Exchange SettlementsKomainu, a well-established and regulated custody service provider and subsidiary of Japanese financial services conglomerate Nomura, has recently unveiled a new partnership with Copper, a digital asset solutions firm.This collaboration offers institutional clients of Komainu a means through which they can access off-exchange settlements. At a broader level, it is another significant development in progressing digital assets infrastructure.Photo by Gerd Altmann on PixabayClearLoop network accessKomainu, which was originally launched by Nomura in conjunction with Ledger and CoinShares, will be accessing Copper’s ClearLoop network as part of this collaboration. This partnership brings a host of possibilities for institutional clients of Komainu.What makes this collaboration particularly noteworthy is its ability to merge Komainu’s regulated, on-chain custody with the advanced off-exchange settlement capabilities of ClearLoop. As the institutional adoption of digital assets continues to gain momentum, the focus on managing custody and counterparty risk has never been more critical. Recent events, such as the collapse of the crypto exchange FTX alongside a plethora of crypto lending platforms, have served as stark reminders of the significance of robust custody solutions in this space.ClearLoop network growthClearLoop, with its distinctive feature of holding assets until just before a trade execution, effectively mitigates counterparty risk by seamlessly connecting multiple exchanges within a single trading network. This innovative approach eliminates the need to transfer assets to an exchange-based wallet, streamlining and fortifying the institutional trading process.UK-based Copper has been making market in-roads with its off-exchange settlement tool which it first launched in 2020. In March crypto exchange platform Huobi signed a memorandum of understanding (MOU) with Copper with the intention of joining the ClearLoop Network. Bitstamp, the world’s oldest crypto exchange, followed in April with its intention to integrate with ClearLoop.Singapore’s Matrixport was next to join in May, followed by Seychelles-headquartered crypto exchange Bitget in August.The leaders of both companies, Nicolas Bertrand, CEO of Komainu, and Dmitry Tokarev, CEO of Copper, expressed their enthusiasm for this partnership. Bertrand highlighted the importance of diversifying counterparty risk and commended the partnership’s ability to offer clients the best of both worlds. He emphasized that by combining Copper’s proven processes and connectivity with Komainu’s on-chain, segregated, and regulated custody platform, this partnership is set to raise the industry’s standards significantly.UK regulatory approvalEarlier this month, Komainu achieved a further milestone when it received regulatory approval from the UK’s Financial Conduct Authority (FCA) to operate as a custodian wallet provider. This achievement aligns with the regulatory framework established to combat money laundering, terrorist financing, and fund transfers.In a landscape where institutions are increasingly embracing digital assets, the partnership between Komainu and Copper demonstrates that the industry is moving towards ushering in a new era of more secure, efficient, and trustworthy financial markets. With the FCA’s regulatory approval, Komainu is solidifying its attempts towards adhering to the industry’s most rigorous security and compliance standards.