Crypto Travel Rule solutions provider CODE obtains ISO/IEC 27001 certification

China has provided insights into the conviction of Zhao Dong, the influential crypto over-the-counter (OTC) trader and widely known founder of the RenrenBit crypto trading desk. The ‘OTC King’Last Wednesday, China’s Supreme Procuratorate disclosed that Zhao, known as the "OTC King," was handed down a substantial prison sentence for engaging in illegal foreign exchange and crypto business operations. The case is emblematic of China's persistent efforts to clamp down on cryptocurrency trading, even when conducted through less transparent channels like OTC desks, private chat groups and stablecoins.Photo by Hanson Lu on UnsplashTracing fundsIn their comprehensive disclosure, the Chinese authorities outlined the meticulous investigation that led to Zhao Dong's conviction. The focus was on tracing fund movements across Chinese bank accounts, overseas cash pools and the circulation of Tether and Bitcoin. Investigators honed in on accounts associated with Zhao Dong and the chat groups used for trading activities. Their arsenal included detailed bank records, WeChat conversations, testimonies from Zhao's OTC agents and other documentary evidence. The report highlighted that all defendants, including Zhao Dong, confessed to the process of collecting dirhams in cash in Dubai, paying RMB to the other party's designated account, buying Tether with dirhams, and allowing the domestic gang to illegally sell it back for RMB. Seven year sentenceIn one of the alleged schemes, Zhao Dong purportedly orchestrated crypto-fiat trades between Dubai-based entities holding cash piles in United Arab Emirates (UAE) dirhams and Chinese contacts within the country. With numerous related recipients confirming that the funds Zhao received were payments from foreigners, the prosecution's case was made so much stronger. Zhao unsuccessfully argued during three public court hearings that his actions constituted digital currency transactions and not a breach of foreign exchange laws. The prosecution countered with evidence from the group's chat records, emphasizing the nature of foreign exchange in their dealings. The court ultimately rendered a verdict, sentencing Zhao Dong to seven years in prison and imposing a 2.3 million Chinese yuan ($325,000) fine. This conviction serves as a stark reminder of the stringent regulatory stance that China has adopted towards cryptocurrency trading. Zhao Dong was considered one of China's most influential OTC crypto traders. He was a Bitfinex shareholder and founder of the D Fund venture capital fund. He established RenrenBit in August 2018, incorporating the company in Singapore. The influential crypto trader is also believed to have been involved in assisting stablecoin-issuer Tether to launch its Tether Yuan product. However, once the authorities moved against him, RenrenBit was taken offline while Tether scrapped its pursuit of Tether Yuan. Despite his influence, Zhao has ultimately become a symbol of the government's commitment to curbing such crypto trading activities within mainland China. The outcome underscores the severity of China's regulatory crackdown on cryptocurrency trading and sends a strong message to other players in the crypto space within the country.

Busan to Merge Blockchain and Coffee through Smart Logistics PlatformThe Korean southern port city of Busan and its regional institution for industrial innovation, Busan Techno Park, announced that they will begin developing a collaborative platform that facilitates smart logistics in the local coffee industry through the use of blockchain technology. The project is aimed at enhancing transparency and trust in the industry by tracking the entire logistics process — from the importation of raw coffee beans through Busan Port to distribution to businesses, then purchase by consumers.Photo by Theo Crazzolara on UnsplashTracking production and flavor profilingThe platform will use artificial intelligence (AI) technology to track the distribution of coffee beans as well as objectively analyze various types of coffee to arrange flavor profiles based on factors such as weather, storage conditions, and the environment. This would eliminate any room for subjective opinions that are usually associated with taste evaluation.“This project aims to develop blockchain technology that can be used to trace the background of coffee beans starting from their country of origin,” said Kim Hyung-kyun, Director of Busan Techno Park. Blockchain technology’s strength lies in its ability to solve the problem of a lack of transparency between coffee producers and consumers.The platform was selected in April as a technology commercialization initiative under the Korean Ministry of Science and ICT’s 2023 Special R&D Zone Development Project. It is set to receive a total of KRW 11.8 billion (approximately $8.9 million) in governmental, private, and municipal funding until December 2025.Fostering transparency and securing a competitive edgeA ceremony was held at the Asti Hotel in Busan on Tuesday to kickstart the project and form the Busan R&D Innovation Valley Committee — consisting of two subcommittees dedicated to distribution and technology, respectively — to carry out the initiative.“It will be possible to manage data on changes in ingredients and quality due to storage conditions and duration. This will give sellers a competitive advantage and allow consumers to enjoy better-quality coffee at reasonable prices,” explained Oh Dong-joon, who is in charge of the distribution subcommittee.After the platform has been developed over the next three years, it will be available for coffee businesses and startup entrepreneurs in Busan. “In the case of specialty coffee, traceability and transparency are important. When the platform is established, it will be a significant help in verifying objective data related to problems that may occur during the import and storage of coffee beans,” remarked Jeon Joo-yeon, CEO of Busan-based specialty coffee brand Momos Coffee.Jung Yo-han, leader of the business mining division under the project’s technology subcommittee, added that consumers will be able to buy coffee that they can trust after it has been traced through the distribution process. The city will also be able to stimulate startups by leveraging blockchain technology and take advantage of the project’s scalability by applying it to all agricultural and marine products that are imported through Busan Port.

Huobi Falls Foul of Malaysian RegulatorMalaysia’s Securities Commission, the regulator responsible for investor protection and market integrity in the South East Asian country, has closed down the Malaysian operations of Seychelles-headquartered global crypto exchange Huobi.Photo by Zukiman Mohamad on PexelsThe regulator announced the shutdown via a press release published to its website on Monday. The Commission outlined that it has taken action against both the exchange, Huobi Global Limited, and its CEO Leon Li. It cites “operating illegally in Malaysia,” given that it was operating as an unregistered digital asset exchange (DAX) as the rationale for the decision.With the enforcement action has come an order to Huobi from the regulator to “cease circulating, publishing or sending any advertisements, whether in email or on social media platforms, to Malaysian investors, and to stop its operations in the country, including to disable its website and mobile application on several platforms such as Apple Store, Google Play and any other digital application platform.”Compliance concernsThe Securities Commission is putting the onus on the Huobi Global CEO to ensure that this order is complied with. The regulator said that it had concerns about the platform’s compliance with local regulatory requirements. It further outlined that it is an offense in Malaysia to operate a DAX without having completed registration with the Commission as a Recognized Market Operator (RMO) under Section 7 (1) of the Capital Markets and Services Act 2007.The Malaysian regulator also took the opportunity to warn citizens that they should only seek to trade on platforms that are registered RMOs and that for right now, those that have funds on the Huobi platform should withdraw their assets and cease trading on the platform.Expected newsHuobi doesn’t seem to have made an official statement relative to the Malaysian Security Commission’s decision via its official media channels. However, it did provide the following response to CoinTelegraph on Monday:“In response to recent reports, we would like to clarify that the situation outlined pertains to the previous Huobi entity and former shareholders. This is not associated with the current Huobi platform, which adheres to strict regulatory compliance globally.”Taking that response at face value, the company doesn’t seem to be particularly bothered about the enforcement action. It seems as if Huobi were already prepared for this eventuality, by starting a new corporate entity from scratch.In August 2022, the Malaysian regulator issued Huobi Global with a lesser enforcement action by adding the company to its investor alert list. It chastised the firm for operating without regulatory approval.Malaysia hasn’t been a hotbed of activity where crypto and digital assets have been concerned and certainly doesn’t compare with Asian centers like Hong Kong and Singapore who are actively chasing crypto business. However, in March of last year, the country’s Deputy Minister of Communications and Multimedia, Zahidi Zainul, said that the Southeast Asian country should recognize crypto assets like Bitcoin as legal tender.In 2021, Malaysia’s central bank joined a Bank of International Settlements (BIS)-led trial to explore the proof of concept of a central bank digital currency (CBDC), in order to enhance technical and policy capabilities should there ever be a need to issue one.