Thailand’s SEC moves to block five exchanges to protect investors

HK Regulators Facilitate Dialogue between Banks and Crypto EnterprisesIn a recent column, Arthur Yuen, Deputy CEO at the Hong Kong Monetary Authority (HKMA), stated that the HKMA and the Securities and Futures Commission (SFC) will jointly convene a meeting on Friday to share opinions on providing banking services to virtual asset service providers (VASPs).Proportionate CDD measuresYuen said that banks should “differentiate the risk levels of customers and apply proportionate CDD [customer due diligence] measures,” and “refrain from adopting a ‘one-size-fits-all’ approach to reject account opening applications.” To address misconceptions about CDD, the HKMA issued a circular on Thursday, offering further clarification and sharing notable cases and best practices.The HKMA called on banks to enhance employee training on account opening procedures and create task forces to help companies seize new business opportunities. The HKMA plans to actively take part in developing and introducing international standards, and provide guidance and support for banks to adopt appropriate anti-money laundering measures.SFC’s guidelines in MayMeanwhile, SFC CEO Julia Leung said in a discussion with Bloomberg that the SFC will issue virtual asset guidelines in May.Reactions on TwitterIn his tweet, Justin Sun, the founder of blockchain DAO ecosystem Tron, hinted at the potential development of a Tron-based stablecoin in Hong Kong. The Hong Kong Innovation Encryption Fund (HKIEF), an investor in blockchain projects, also took to Twitter to predict the details of a regulatory framework for cryptocurrencies in the city.According to HKIEF, USDT and USDC will be classified as security tokens, while BTC and ETH won’t be deemed securities. Exchanges trading non-security tokens will need both a VASP license and a trust license. Hong Kong-based virtual asset exchanges will be required to obtain a full license by May 31, 2024.

In the aftermath of the massive $235 million hack of the WazirX cryptocurrency exchange on July 18, users and stakeholders are grappling with its devastating consequences. The breach, which compromised a significant portion of the exchange’s reserves, has led to a series of legal, financial and security-related challenges, leaving millions of users uncertain about the future of their funds. The hack and its aftermathWazirX, once a leading Indian cryptocurrency exchange, lost approximately $235 million due to a breach in one of its multi-signature wallets. This included significant amounts of Shiba Inu (SHIB), Ethereum (ETH) and other assets. The hack crippled the exchange, forcing it to temporarily shut down operations and seek a restructuring process under Singapore's insolvency laws. The WazirX hacker has since begun laundering the stolen assets through Tornado Cash, a crypto mixer known for obscuring transaction details. According to blockchain security firm Cyvers, the hacker transferred over 5,000 ETH (approximately $12 million) to a new wallet and laundered $10 million in Ethereum through Tornado Cash. This mirrors the tactics of the North Korea-backed Lazarus Group, which has used similar methods in past high-profile crypto thefts. Photo by GuerrillaBuzz on UnsplashUsers seeking redress and government interventionAs the victims of the hack face uncertainty, over 4 million active WazirX users are expected to suffer a loss of at least 43% of their funds due to the restructuring process. Frustrated by the lack of action from Indian authorities, many users have sought help from Indian Prime Minister Narendra Modi, who was visiting Singapore at the time. Users took to social media to air their grievances and demand justice, urging the government to intervene. WazirX co-founder Nischal Shetty, who is based in Dubai, added to the confusion by stating that he does not know who is responsible for safeguarding user crypto funds on the platform. His statement has fueled outrage among users, who feel abandoned by the exchange’s management. Legal and ownership disputesAmid the chaos, WazirX is also battling a legal dispute over its ownership with Binance, the world’s largest cryptocurrency exchange. Shetty has repeatedly claimed that Binance acquired WazirX, granting it significant control over the platform's operations. However, Binance founder Changpeng Zhao (CZ) refuted these claims in 2022, stating that the acquisition deal was never completed. The uncertainty surrounding the ownership of WazirX has further aggravated users, many of whom are demanding a clear statement from Binance. So far, Binance has remained silent, neither confirming nor denying its involvement. This ambiguity has intensified calls for clarification, with users fearing that a lack of transparency may worsen their chances of recovering their funds. Partial withdrawals and restructuring effortsIn response to the crisis, WazirX has initiated phased withdrawals for users, allowing them to access 66% of their Indian Rupee (INR) token balances. Initially set for September 9, the withdrawal window was moved forward, offering some relief to users. However, many are dissatisfied with the partial access to their funds and are questioning when full crypto withdrawals will resume. WazirX’s legal team has indicated that users may recover only 55% to 57% of their crypto holdings, sparking further discontent. Meanwhile, the exchange has filed a moratorium application in the Singapore High Court, seeking a six-month reprieve from legal actions as it works on a restructuring plan. Looking aheadAs the WazirX saga unfolds, the future of the exchange and its users remains uncertain. The legal battles, ownership disputes and the ongoing laundering of stolen assets pose significant challenges to the platform's recovery. For now, users can only hope that the restructuring process will bring them closer to recovering their lost funds and that authorities will step in to provide clarity and resolution. 

Param Labs, a modular gaming ecosystem, has announced the successful completion of a $7 million investment round, with Animoca Brands, a prominent crypto venture capital firm, leading the charge.Photo by Precondo CA on UnsplashOversubscribed funding roundJoining Hong Kong-headquartered Animoca Brands in this oversubscribed round were Delphi Ventures, Cypher Capital, P2 Ventures (formerly Polygon Ventures), Mechanism Capital, Merit Circle, TRGC Capital, Double Peak Group and MH Ventures. Anthony Anderson, CEO of Param Labs and Kiraverse, highlighted the significance of modular gaming ecosystems like Param in laying the groundwork for the next era of Web3 games. In an exchange with Cointelegraph, Anderson stated: “Unlike most Web3 studios that focus on developing single game titles, modular ecosystems offer a variety of products and components. This allows developers to build their own games from these modules and provides essential tools for other developers to utilize and integrate into their projects.” The timing of this funding round coincides with significant growth milestones for the Param Gaming Platform, which recently surpassed 300,000 daily active users. Additionally, the platform's X page boasts over 2.5 million followers, underscoring its growing popularity. Strategic investments from luminaries such as Yat Siu, co-founder of Animoca Labs, and Banks, founder of Face Clan, further underscore the potential of Param Labs, which is based in the United Arab Emirates (UAE), in realizing the vision of an open metaverse. In a statement published to the Animoca Brands website, Yat Siu expressed enthusiasm about the collaboration, stating: "This collaboration aligns with our shared vision to redefine the gaming landscape, ensuring that gamers are the true owners of their digital assets." Focusing on infrastructureThis injection of capital is poised to address a critical deficiency in the realm of Web3 gaming: the lack of foundational infrastructure. Addressing precisely that challenge which is hindering mainstream adoption, Anderson emphasized the pivotal role of infrastructure: “Focusing on infrastructure is crucial, as it not only addresses the challenges in the games we’re developing but also has the potential to be applied to hundreds, if not thousands, of other experiences. This will significantly contribute to the adoption of blockchain gaming.” The UAE-based company is currently working on producing a number of products. These include its Game Launcher and Pixel to Poly, an offering that converts 2D images into 3D assets within games. While those are in the product pipeline, it has already launched Kiraverse, an online multiplayer game where the gameplay incorporates players competing to earn digital assets.  Param Labs has also sought to broaden the technical expertise available to it, with the hiring of Steve Young, a former head of consumer products at renowned American video gaming firm Activision Blizzard. Young has come in as a strategic advisor at Param. The company plans to launch its native token, PARAM, shortly to enable governance of the ecosystem that it is putting together.