Korean regulators pressured to approve crypto ETFs following ETH ETF approval in the U.S.

US Sanctions Chinese for Enabling Crypto Money LaunderingIn a press release published earlier this week, the Office of Foreign Assets Control (OFAC) within the Department of the Treasury in the United States, stated that it had sanctioned two Chinese nationals and a Hong Kong British national for allegedly having aided the North Korean government in crypto money laundering activities.©Pexels/RODNAE ProductionsThe Americans claim that the funds are the proceeds of cyber crime with the laundered money in turn being used to support the Democratic People’s Republic of Korea (DPRK) regime, including its ballistic missile and weapons programs.Illicit OTC crypto tradesThe three OFAC-sanctioned individuals are Wu Huihui (Wu), Cheng Hung Man (Cheng) and Sim Hyon Sop (Sim). Wu is an over the counter (OTC) cryptocurrency trader based within China. OFAC claims that he has facilitated the conversion of millions of dollars worth of stolen digital assets into fiat currency at the behest of a North Korean cyber-crime syndicate.In 2009 OFAC sanctioned a small North Korean bank, Korea Kwangson Banking Corp. (KKBC). At the time, the agency claimed that KKBC had extended financial services to previously designated North Korean banks including Tanchon Commercial Bank and Korea Hyoksin Trading Corporation. Fourteen years on, OFAC has now identified Sim as a facilitator of KKBC money laundering schemes. OFAC claims that Sim represented the sanctioned bank, and in the process, he was the recipient of millions of dollars worth of cryptocurrency.Overseas earningsThe agency claims that the source of this money was the earnings of North Korean IT workers who had worked overseas, including within the United States. The North Korean regime has pursued a strategy of sending workers into employment overseas in an effort to raise capital in harder currency.Like Wu, Cheng was also identified as an OTC cryptocurrency trader. It’s understood that Cheng collaborated with Wu, and employed a series of shell companies in order to convert cryptocurrency into fiat money.Blockchain data analysis firm Chainalysis has researched the topic based upon the OFAC and Department of Justice data and information. That analysis has revealed that the North Korean hackers and cyber-crime facilitators make use of cryptocurrency mixers such as Tornado Cash and Sinbad. While other illicit entities utilize these crypto mixers which attempt to obfuscate the origin of digital assets, Chainalysis’ research suggests that the North Korea-affiliated actors use mixers to a far greater extent than others.Reward offeredIt’s understood that the US authorities indicted a fourth person who remains unknown beyond his/her online moniker, “live:jammychen0150.” Properties in the United States connected with the three known individuals have been frozen. The State Department has also outlined its willingness to provide a reward of up to $5 million for any information that leads to the arrest or conviction of Sim. Furthermore, rewards of $500,000 each are being offered relative to the apprehension of two of Sim’s associates, Han Linlin and Qin Gouming.In a statement, Department of Justice Criminal Division Assistant Attorney General Kenneth Polite Jr. said that “the North Korean operatives have innovated their approach to evading sanctions by exploiting the technological features of virtual assets to facilitate payments and profits, and targeting virtual currency companies for theft.”

Metalpha Technology Holding Limited, based in Hong Kong, has strategically invested in NextGen Digital Venture Limited, aiming to enhance institutional participation in the digital asset space. This move is part of Metalpha's broader effort to bridge the gap between traditional finance (TradFi) and the crypto sphere.Photo by cottonbro studio on PexelsBuilding on Next Generation FundNews of the collaboration broke via a PR Newswire press release published by Metalpha on Monday. The deal builds upon a previous partnership struck by the two companies in April of last year, which resulted in the creation of Next Generation Fund I. This fund is specifically tailored to leverage Grayscale Investments LLC's suite of products, with Grayscale being one of the world’s largest crypto asset managers. Notably, the fund has demonstrated solid performance, surpassing bitcoin's annualized return by 35%. This success has instilled confidence in Metalpha, fostering optimism for the fund's future achievements. NextGen Digital is a Hong Kong-based investment company that aims to provide cryptocurrency and Web3 exposure to institutional clients in the conventional finance realm. Alongside its previous partnership with Metalpha, the firm has invested directly in Web3 startups such as iZumi Finance, a liquidity-as-a-service DeFi protocol. In announcing the Metalpha investment, NextGen founding partner Jason Huang said that the company “is committed to providing secure, compliant cryptocurrency investment opportunities and is always focused on achieving alpha returns.” The company is leveraging its Hong Kong Type 9 license, while aspiring to deliver secure and compliant cryptocurrency investment opportunities. Adrian Wang, president and director of Metalpha Technology Holding, expressed enthusiasm about the partnership, stating: "The launch of the NextGen fund marks the first step for both parties to jointly develop compliant products with generous returns. We look forward to establishing a more solid partnership in the future.” Wang had previously stated that clients of the Next Generation Fund were overseas Chinese institutions. “Some of them are family offices, some of them are public companies,” he stated. On-boarding TradFi investmentPositioned as a notable platform in Asia, NextGen aims to facilitate traditional finance's seamless entry into the realm of cryptocurrencies. This strategic investment by Metalpha underscores the evolving landscape where traditional financial institutions increasingly embrace the potential of digital assets. Metalpha, recognized as one of Asia's leading providers of crypto derivatives solutions, collaborates closely with traditional financial entities, including family offices and crypto mining firms. Holding both Type 4 and Type 9 licenses from the Securities and Futures Commission (SFC) of Hong Kong, Metalpha is authorized to advise on securities and engage in real estate investment scheme management or securities and futures contracts management. In May of last year, Metalpha secured a $5 million investment from leading crypto mining equipment manufacturer, Bitmain. Metalpha counts hybrid crypto exchange GRVT among its portfolio of investments. In September it emerged that it had invested in ParaX, a Web3 super app developed by Parallel Finance. In February 2023, the Litecoin Foundation partnered with Metalpha in an effort to provide environmentally friendly mining techniques to the Litecoin ecosystem.

OPNX Makes a Play for Struggling Crypto Lender HodlnautIn a strategic move OPNX, the crypto claims trading platform associated with the founders of failed Singaporean crypto hedge fund Three Arrows Capital (3AC), is eyeing the acquisition of Hodlnaut, a beleaguered crypto lender currently undergoing court-supervised restructuring in Singapore.Photo by Meriç Dağlı on UnsplashCompelling offerThat’s according to a person familiar with the matter cited by Bloomberg News on Sunday, together with a term sheet seen by Bloomberg. It’s understood that OPNX has presented a compelling offer to infuse Hodlnaut with a much-needed capital injection of approximately $30 million worth of FLEX digital tokens.These tokens are closely tied to CoinFLEX, a trading platform that ran into difficulty in 2022, co-founded by Mark Lamb and Sudhu Arumugam. The Seychelles-based company rebranded and relaunched as OPNX earlier this year with the 3AC founders on board. The FLEX token holds a current market valuation of around $647 million, according to CoinGecko data.Partial creditor payoutThe OPNX proposal aims to fund a partial creditor payout to facilitate the resolution of pending claims. This proposal comes on the heels of efforts by Hodlnaut’s directors to reach out directly to its users, a move that was met with objections by the interim judicial managers overseeing Hodlnaut’s restructuring. A letter dated July 29 from the administrators confirms this development.Under the terms of the deal outlined in a term sheet, OPNX’s capital injection through FLEX tokens would translate into a 75% ownership stake in Hodlnaut. The restructuring plan, if approved by creditors, would see these creditors receiving 30% of their claims in FLEX and other tokens. Alternatively, they would be entitled to a pro-rata payment of up to 95% of the total available corporate assets, whichever is more favorable to them.Hodlnaut, headquartered in Singapore with operations also in Hong Kong, got caught up in crypto market turbulence, leading to a suspension of withdrawals a year ago. Subsequently, it embarked on a court-monitored restructuring journey in Singapore. Neither Hodlnaut nor its judicial managers have provided immediate comments on the OPNX bid.The founders of Hodlnaut, Simon Lee and Zhu Juntao, had earlier proposed a business sale as a preferable alternative to liquidation. This proposal aimed to provide better outcomes for creditors, who had initially expressed preference for liquidation over a proposed restructuring plan earlier in the year.OPNX reprimandThe journey of both OPNX and Hodlnaut is also marked by legal and regulatory challenges. In April, authorities in Dubai reprimanded Su Zhu, Kyle Davies, Mark Lamb, OPNX’s CEO Leslie Lamb, and Sudhu Arumugam for operating and promoting OPNX without the required local license. Meanwhile, the liquidators of 3AC have alleged a lack of cooperation by Zhu and Davies, as they seek to recover $1.3 billion from the duo, reflecting the losses preceding the fund’s downfall.The 3AC founders recently claimed that they would donate OPNX profits to 3AC creditors. However, Kyle Davies is fighting the efforts of the 3AC liquidator to reclaim funds from the founders.