South Korea sanctions North Korean tech workers for cybercrimes and crypto theft

Illiquid Token Sinks OPNX’s $30 Million Hodlnaut BidThe interim judicial managers overseeing the restructuring process of troubled Singaporean crypto lender Hodlnaut have firmly opposed the takeover offer presented by OPNX, the Dubai-based crypto bankruptcy claims trading platform associated with the founders of the now-defunct hedge fund, Three Arrows Capital.Photo by Image Hunter on PexelsSpeculative token valueIn a report published on Tuesday, Bloomberg referred to a recent court filing in which the administrators of Hodlnaut had characterized OPNX’s $30 million bid in FLEX digital tokens as “illiquid” and bearing “speculative value.” Additionally, a significant portion of Hodlnaut Group’s creditors, representing 60% of the total debt, had also voiced their dissent towards the proposed OPNX deal.Hodlnaut, headquartered in Singapore with operations in Hong Kong, found itself among the casualties of the $1.5 trillion crypto market downturn last year. OPNX had expressed its interest in taking control of Hodlnaut last month.Among the concerns raised by managers were the absence of a cash injection or assets with readily available liquidity, such as Bitcoin or Ether. Furthermore, there was no clear timeline provided for the repayment of creditors’ debts, and the proposal lacked detailed information regarding payments, which are limited to just 30% of liabilities, according to the court-appointed supervisors of Hodlnaut’s restructuring.FLEX token offeringThe FLEX token, associated with the CoinFLEX exchange, whose founders Mark Lamb and Sudhu Arumugam launched OPNX earlier this year, is at the center of the proposal. Currently, it holds a market value of approximately $54.4 million. However, its trading volume remains low. Moreover, its unit value stands at $0.55, marking a substantial 95% decrease from a month ago when the offer was first submitted to the Singapore court, as per data from CoinGecko.The deal would have meant OPNX taking a 75% stake in the business. Previously, Hodlnaut’s founders Simon Lee and Zhu Juntao had put forward a proposal of a business sale rather than liquidating the company as the preferred option.Su Zhu and Kyle Davies, co-founders of Singapore’s Three Arrows Capital, played instrumental roles in the inception of OPNX, joining with the CoinFLEX founders in establishing the bankruptcy claims trading platform. Despite their initial contributions, it’s worth noting that Zhu has previously clarified that neither he nor Davies are involved in the day-to-day management of the exchange.Regulatory sanctionsIn recent developments, Zhu and Davies were sanctioned with a nine-year ban by the Monetary Authority of Singapore due to violations connected to their collapsed hedge fund firm, which operated out of Singapore. Furthermore, in August, authorities in Dubai levied fines against Zhu, Davies, Mark Lamb, OPNX CEO Leslie Lamb, and Arumugam for operating and promoting OPNX without the required local license.The rejection of OPNX’s bid by Hodlnaut’s bankruptcy administrators underscores the challenges implicated by illiquid tokens. The fate of Hodlnaut remains uncertain, pending further developments in the ongoing legal proceedings, and will depend upon its management’s efforts in finding a new buyer for the business.

Circle and SBI Holdings join forces to propel USDC growth in JapanIn a move aimed at advancing the adoption of the USD Coin (USDC) in the Japanese market, stablecoin issuer Circle and Japanese financial behemoth SBI Holdings have entered into a memorandum of understanding (MOU).Photo by Alex Knight on UnsplashBanking and distributionThe collaboration, outlined in a press release published on Monday, seeks to enhance the circulation of USDC, establish a robust banking relationship and broaden the footprint of Circle in the Asian nation.Key subsidiaries of SBI Holdings are set to play pivotal roles in this strategic partnership. SBI’s VC Trade Limited, among others, will actively engage by applying for licensing as an electronic payment instruments service, facilitating the distribution of USDC across Japan. Notably, this move aligns with efforts to propel the electronic payment ecosystem in the country.Further solidifying the collaboration, SBI’s Shinsei Bank will provide crucial banking services that empower access to USDC and enhance liquidity for businesses and users based in Japan. This initiative not only promotes the widespread usage of USDC but also establishes a secure financial infrastructure for its seamless integration into the Japanese market.Web3 service offeringAs part of this collaboration, the SBI Group plans to incorporate Circle’s Web3 Services solutions, encompassing programmable wallets, blockchain infrastructure and smart contract management tools.Circle has been busy in recent weeks, rolling out partnerships in the Asian region that will see greater use of its Web3 Services suite. In Taiwan, it partnered with a convenience store chain recently, in a move that will integrate its Web3 services into the Taiwan FamilyMart app. A similar deal was struck in September with Grab, a Southeast Asian multifaceted super-app.Jeremy Allaire, CEO of Circle, expressed the groundbreaking nature of this partnership, envisioning USDC as a stablecoin that can be extensively utilized in Japan’s burgeoning on-chain economy across various consumer-led Web3 product categories.Allaire had signaled an interest in delving further into the Japanese market back in July. Then, he suggested that the company might consider launching a stablecoin in Japan but that it was also interested in exploring partnerships in the East Asian country.Yoshitaka Kitao, CEO of SBI Holdings, commended Japanese authorities for creating a regulatory environment conducive to the adoption of stablecoins within the region. In June, Japan passed legislation mandating that stablecoins must be fully backed by highly liquid cash and cash-equivalent assets, preventing a recurrence of issues experienced by certain stablecoins.SBI’s digital asset involvementWhile Circle has very much been advancing its service offering in the Asian region in 2023, likewise SBI has been delving further into the realm of digital assets and Web3. In April it led a funding round into Standard Chartered subsidiary company Zodia Custody, a digital asset custodian. SBI has also invested in Zodia Markets, an exchange and brokerage platform which is also a Standard Chartered subsidiary company.SBI Holdings established the Osaka Digital Exchange (ODX) in 2021, a crypto exchange business which will commence security token trading next month. In a social media post on the X platform, Allaire highlighted SBI’s involvement in the digital assets space:“Importantly, Kitao-san is not a ‘johnny come lately’ to crypto and blockchain tech. He has understood it and invested in it for nearly a decade. SBI Holdings already operates digital asset trading, brokerage and cross-border payments solutions.”

Bithumb Live Files for BankruptcySouth Korean cryptocurrency exchange Bithumb’s live commerce platform Bithumb Live — an attempt at business diversification — has filed for bankruptcy. The platform entered bankruptcy proceedings last year, brought on by business difficulties and various suspicions of embezzlement involving its CEO.Photo by Melinda Gimpel on UnsplashAccording to legal sources on Monday, the Seoul Bankruptcy Court declared Bithumb Live’s bankruptcy last Monday. The court plans to hold creditor meetings and inspections on November 28 to incorporate creditors’ opinions into the bankruptcy proceedings and assess the status of the company. Major companies like LG Uplus, SK Telecom, SK Magic, and Lotte Card are among the platform’s creditors.Bithumb Live’s backgroundBithumb Live was founded in September 2021 by Bithumb and Bucket Studio, who each invested KRW 6 billion (approximately $4.4 million). Bucket Studio is a content distribution company that gained considerable attention with the global success of the Netflix original series “Squid Game” last year because it holds a 15% stake in Artist Company, an entertainment planning agency co-founded by “Squid Game” lead actor Lee Jung-jae and actor Jung Woo-sung. In particular, Bucket Studio’s CEO Kang Ji-yeon is the sister of Kang Jong-hyun, who is embroiled in allegations related to the ownership of Bithumb.Bithumb and Bucket Studio each hold a 37.5% share of Bithumb Live, making a combined ownership of over 75%. Bithumb Live, led by Kang Ji-yeon, had been established with the intent to create a commerce platform with various features like a metaverse, non-fungible tokens (NFTs), and cryptocurrency payments. After its establishment, it announced that it would challenge its key competitor Naver’s prominent live shopping platform by preparing to sign deals with 15 different companies.Financial hardshipsHowever, the platform hit a roadblock just one year after its establishment and found itself unable to escape financial difficulties. According to last year’s business report, Bithumb Live’s liabilities exceeded its assets by approximately KRW 248 million and the platform recorded a net loss of KRW 10.2 billion. Unable to withstand such losses, it announced an indefinite temporary closure via its internal messenger to employees in October of last year. The employees ended up working only four hours a day, resulting in a more than 50% reduction in working hours. Subsequently, the number of employees, which was 73 in September, plummeted to just four in January of this year, essentially signaling a total stop to business operations. In the first half of this year, Bithumb Live’s net loss amounted to almost KRW 1.1 billion.Management entanglementsOn top of these financial strains, the company was also plagued by Kang Ji-yeon and her brother Kang Jong-hyun’s owner’s risk, which encompassed allegations of embezzlement and misappropriation. In July of this year, Kang Ji-yeon was sent to trial on charges of embezzlement and misappropriation at Bucket Studio. Along with her brother and former Chorokbaem (CRB) Group Chairman Won Young-sik, she was accused of granting call options on convertible bonds held by Bithumb affiliates Vidente and Bucket Studio for free to companies controlled by Won’s children between December 2021 and July 2022, inciting damages worth approximately KRW 58.7 billion to the respective companies. In the process, she was also found to have received KRW 32.2 billion in acquisition payments. Kang Jong-hyun had been detained and on trial since February of this year.Bithumb Live’s largest shareholder, Bucket Studio, is also in a tight spot. Back in June, the Korea Exchange imposed a penalty of three points on Bucket Studio for reversing its disclosure. The company had been penalized five points the previous month after withdrawing its decision to issue convertible bonds. In particular, the studio also recorded an operating loss of KRW 7 billion and a net loss of KRW 195.6 billion last year based on consolidated financial statements. In the first half of this year alone, it suffered an operating loss of KRW 896 million, raising red flags for its management.