Hong Kong Authorities Unite to Form Crypto-Centric Taskforce

Short-Term Crypto Investment Prevails Among Hong Kong’s Retail InvestorsHong Kong’s retail investor interest in virtual assets has experienced a significant surge in recent years, albeit a recent survey suggests that most retail investors take a short-term investment view relative to crypto assets.Photo by Robert Bye on UnsplashIFEC studyThis newfound enthusiasm for virtual assets emerges from a recent study published by the Investor and Financial Education Council (IFEC), a subsidiary of the Securities and Futures Commission (SFC), Hong Kong’s securities regulator. The survey found that 6% of retail investors in the city had entered the virtual asset market in 2023, as compared to merely 1% in 2019.Conducted from June to July of this year, the study encompassed 1,000 individuals aged between 18 and 69. The survey uncovered a trend toward crypto investing among retail investors who’ve been enticed by the allure of the emerging asset class. Intriguingly, every single one of the digital asset retail investors in the study held cryptocurrencies in their portfolios. Non-fungible tokens (NFTs) and stablecoins, while still relatively niche, were also present in the portfolios of 6% and 2% of investors, respectively.11% to invest in crypto within 12 monthsAnticipating a further uptick in interest, the IFEC report posits that 11% of those surveyed have intentions to invest in virtual assets or related products within the next 12 months. This indicates that the allure of virtual assets continues to exert its magnetic pull on investors in Hong Kong.Despite the growing interest, a noteworthy finding in the survey is that 75% of retail virtual asset investors admitted to their primary motivation being the pursuit of short-term gains. Simultaneously, 74% of these investors perceived virtual assets as a prevalent investment trend, and 73% cited the fear of missing out on popular investment opportunities as a driving factor. These statistics underscore the need for enhanced investor education within the sphere of virtual assets.Lack of regulatory awarenessAnother interesting aspect of the data which emerged from the survey was the finding that only 47% of all surveyed investors are aware of Hong Kong’s recently introduced virtual asset trading regulations, which came into effect on June 1.An additional facet of this investor behavior study was illuminated by research conducted by the Department of Applied Social Science at Hong Kong Polytechnic University (PolyU). This research, based on data from a separate IFEC report that surveyed 501 people from November to December of last year, revealed that many retail investors in virtual assets exhibited overconfidence in their judgment.These investors were also found to have a proclivity to overemphasize past information, lean heavily on readily available and easily recalled information, and overestimate personal intuition.With that in mind, Eric Chui, Head of PolyU’s Applied Social Science unit, advised virtual asset investors to adopt a more deliberate and rational approach. Chui emphasized the importance of building financial literacy and collecting high-quality market information to make informed investment decisions, while steering clear of irrational investment behavior and biases.

Seoul prosecutors charge eight suspects linked to crypto price manipulationEight individuals involved in a cryptocurrency fraud, which is separate from a murder case associated with the same token, have been formally charged and referred to court by public prosecutors in South Korea.The Joint Virtual Asset Crime Investigation Unit of the Seoul Southern Prosecutors’ Office has recently disclosed the arrest of two key figures in the scandal related to a cryptocurrency called Puriever (PURE). The unit apprehended the chief executive of the PURE issuer, referred to as “A” for anonymity, and a market manipulator. Both have been charged with fraud. In addition to these arrests, the prosecution has charged six other individuals–including an executive from a cryptocurrency consulting firm, anonymously named “C,” and a broker. These additional suspects have been charged but not arrested.Photo by Adam Śmigielski on Unsplash$16 million from over 6,000 victimsThe prosecution has accused the suspects involved in the PURE case of illicitly inflating the token’s price through deceptive disclosures and market manipulation during April and May 2021. This scheme reportedly enabled them to amass illegal profits totaling KRW 21 billion (close to $16 million) from approximately 6,100 victims. In March of this year, it came to light that the PURE was at the center of a series of criminal activities, including kidnapping and theft, which ultimately led to a murder in Gangnam, Seoul.The prosecution has uncovered that “A” and “C,” key figures in the PURE scandal, transferred 55.2 million PURE to a partner company under the guise of an initiative to reduce air pollution, as falsely stated in their disclosure. The suspects reportedly employed a skilled manipulator to inflate the token’s price artificially. Once the price peaked, they sold off the tokens, capitalizing on the artificially inflated value.Circulation supply manipulationThe case reveals a collective scheme orchestrated by a token issuer, a consulting entity, a broker, and an experienced market manipulator. A key tactic in their scheme involved locking their cryptocurrency wallet to artificially limit the token’s circulation supply. Furthermore, these fraudsters employed a bot to perform wash trading, which boosted the daily trading volume of the token. This strategy created a false impression of high demand and activity in the market.A representative from the prosecution emphasized that the cryptocurrency market is more susceptible to manipulation than the stock market. This vulnerability is attributed to the lack of a monitoring and supervision system in the crypto sector, despite its speculative nature. In response to these challenges, the prosecution has expressed a firm commitment to enhancing its crypto investigation capabilities with the goal of effectively combating criminal activities. These efforts are aimed at fostering a fair and transparent trading environment, safeguarding the integrity of the cryptocurrency market.

Blockchain Tech Enhances Korean Meat Industry’s Trading SystemThe Korean meat industry is leveraging blockchain technology to optimize its meat trading system.©Pexels/mali maederOn Tuesday, the MOOxMOO Foundation, a Korean blockchain-driven supply chain management provider, announced its strategic partnership with meat processing company PMD, according to the Maeil Business Newspaper.Inefficient distributionThe partnership aims to enhance the transparency of the meat trading system and address issues of inefficient intermediary distribution, particularly regarding payments, settlements, and deliveries. This goal will be achieved through the foundation’s meat trading platform MOOxDEAL, which will utilize soulbound tokens (SBTs) to verify identities of supply chain participants.Rising meat demandThe OECD-FAO Agricultural Outlook 2022–2031 stated that in 2021, world meat imports are estimated to have reached 40 million metric tons (Mt), with poultry imports leading the way. Brazil, the European Union and the United States were among the top meat exporting countries, meeting a significant portion of the increased import demand.Meat consumption is projected to grow by 15% by 2031, driven by an expected 11% increase in the global population. Global meat supply is projected to reach 377 Mt by 2031, though growth will not be as rapid as the previous decade.The amount of protein available from poultry, pork, and beef is expected to increase globally by 16%, 17%, and 8%, respectively, by 2031, with poultry being the main contributor to overall meat production growth. The majority of meat production growth is set to occur in developing regions.Costs onto consumersDespite increasing global meat production, the unsuitable distribution structure in Korea may shift costs onto consumers.Through the partnership, the MOOxMOO Foundation looks forward to addressing the inefficiencies of intermediary distribution and benefiting consumers. The foundation also envisions its platform contributing to the Korean meat industry by optimizing both business to business (B2B) and business to consumer (B2C) trading.