Bullish Emerges as a Bidder for Bankrupt FTX Exchange

Hong Kong Setting High Bar on Crypto RulesLucy Gazmararian, a Fintech Advisory Group member of Hong Kong’s Securities and Futures Commission (SFC) and founder of crypto venture firm Token Bay Capital has said that the standards for Virtual Asset Service Providers (VASPs) in Hong Kong are incredibly high.©Pexels/Brayden LawThe Securities and Futures Commission (SFC) has established these strict guidelines as they want the crypto industry to adhere to the same compliance standards as traditional financial firms.Gazmararian made the comments in discussion with Cointelegraph on the fringes of the Hong Kong WOW Summit. Although the bar is set high, Gazmararian maintains that it is not without good reason. The SFC’s approach is to ask VASPs to apply the same standards that existing financial institutions such as huge banks and asset managers must comply with.Short term challengesAccording to a consultation paper released by the SFC on February 20th, licensed VASPs may serve retail investors, but the standard of investor protection measures imposed needs to be considered. Additionally, Anti-Money Laundering (AML) and Know Your Customer (KYC) policies were also discussed.While these high standards may benefit the industry in the long run, Gazmararian believes they may pose challenges for the crypto industry in Hong Kong over the short term. She explained that many crypto businesses are in the startup phase and have funding but not huge amounts. Therefore, complying with the framework may incur significant costs. Gazmararian mentioned the need for local VASPs to have insurance, independent assessment reports, and store crypto in cold storage. It is important to note that these costs may prevent some startups from entering the market, which may have consequences on the industry’s growth in Hong Kong.The Token Bay Capital founder believes that with a solid regulatory framework in place, more well-capitalized financial firms will be willing to help promising startups get off the ground. In her opinion, the companies that receive a license will be upholding the most stringent standards.Ambitions to be global crypto hubThe SFC has encouraged individuals, corporations, and crypto firms to review the 361-page consultation paper and provide feedback. The securities regulator wants these entities to share their views and point to things that may have been missed. According to Gazmararian, the SFC is “absolutely focused” on getting everything right, so they are seeking input from a wide range of sources.Submissions for feedback on the consultation paper closed on March 31. Hong Kong has made significant strides in recent months to establish itself as the world’s next crypto hub. According to a March 20 statement by the Secretary for Financial Services and the Treasury, Christian Hui, more than 80 digital asset firms have expressed interest in establishing a presence in Hong Kong over the last few months. This interest is a testament to the growing importance of the crypto industry and the favorable environment that Hong Kong is creating for its growth.

Japan Tops Crypto Losses to North Korean HackersHackers affiliated with the North Korean regime have been responsible for the theft of $721 million in digital assets from Japan.That’s the finding of a recent report by UK-based crypto compliance analysis firm Elliptic. Elliptic had produced the report on behalf of Japanese news media group, Nikkei. It leaves Japan at the top of the table when considering the distribution of digital asset losses suffered due to North Korean hackers on a country by country basis.Photo by FLY:D on UnsplashIncreasing lossesElliptic has the wherewithal to track and identify blockchain-based transfers. As part of its analysis, it grouped by region and by country those businesses that it identified as having cryptocurrency holdings that later were transferred to digital wallets held by the Lazarus Group, the most notorious hacker group connected with the North Korean government. It’s the first such analysis to break down crypto-related hacking losses on a country by country basis.The study included a consideration of both hacking and ransomware attacks. The loss associated with Japanese-based entities represents in excess of 30% of the global recorded loss. This latest analysis follows a recent report submitted to the United Nations which found that North Korea stole more digital assets in 2022 than any other year. That report had been submitted to the 15 members of a North Korea sanctions committee, finding that between $630 million and $1 billion worth of digital assets had been stolen.Lax securityElliptic’s analysis and subsequent report point to lax security being employed within Vietnamese and Japanese cryptocurrency marketplaces. Nikkei referred to an unnamed source who asserts that at least three Japanese cryptocurrency exchanges had been compromised by hackers between 2018 and 2021.One of those instances involved Zaif, a company that lost $51.4 million in 2018 and subsequently shut down operations. Overall, Elliptic estimates a global loss of $2.3 billion to hackers between 2017 and 2022 in digital assets, as suffered by crypto firms. It also estimates such losses suffered in the United States at $497 million, while Hong Kong-based losses have been calculated at $281 million.International responseIn April, 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.On Saturday, a joint statement was issued by the Group of Seven finance ministers and central bank governors, following a meeting in Japan, outlining the “growing threat from illicit activities by state actors.” It’s widely believed that the proceeds of these hacks are contributing towards the funding of North Korea’s missile program and other such activities that threaten stability within the region.The Japan External Trade Organization (JETO) has estimated that the estimated $721 million stolen from Japan amounts to 8.8 times the value of North Korea’s exports in 2021.

State-Owned Newspaper to Launch NFT Platform in ChinaChinese government-owned media outlet China Daily, under the guidance of the Publicity Department of the Chinese Communist Party, has allocated a substantial budget of 2.813 million yuan (equivalent to $390,000) for the development of an NFT platform.Photo by Hanson Lu on UnsplashInviting bids from home and abroadThe move will open the door to both domestic and international blockchain technology firms, inviting them to spearhead the creation of the platform. According to a public tendering announcement published last month, the chosen firm must operate on a blockchain mainnet capable of handling over 10,000 transactions per second, ensuring top-notch performance and reliability.One of the platform’s key features will be its user-friendly interface, allowing users to effortlessly upload, display, and manage their digital collections. It will support a wide range of multimedia formats and diverse collection types, making it a versatile hub for creative expression. Additionally, the platform will offer advanced functionalities like pricing, bidding, limited-time offers, and multi-currency settlement to ensure a comprehensive and satisfying user experience.Extending the reach of Chinese cultureThe core objective of the China Daily NFT Platform is to amplify the global influence of Chinese culture by seamlessly blending technology and culture in the metaverse. This ambitious strategy integrates cutting-edge technologies such as virtual reality (VR), augmented reality (AR), mixed reality, blockchain, non-fungible tokens (NFTs), big data, and cloud computing.In an effort to expand the global reach of their digital collections, China Daily intends to collaborate with both domestic and international mainstream NFT platforms. This ambitious plan includes partnerships with well-known foreign platforms such as OpenSea, Rarible, SuperRare, and Foundation. Despite the rigorous regulatory landscape and scrutiny that blockchain entities face in China, this approach aims to make Chinese digital collections more accessible to a global audience.The urgency and importance attached to this project are evident in the tight timeline set by China Daily. The chosen contractor must submit their application by October 17 and complete the development of the platform within three months, highlighting the publication’s commitment to this venture.NFT platform development despite crypto banHowever, it’s important to acknowledge that this initiative unfolds within the backdrop of stringent cryptocurrency regulations in China. Since 2021, although NFTs have not been banned, all forms of cryptocurrency transactions have been prohibited in the country, and blockchain entities operating within China face intense regulatory oversight.In May the Supreme People’s Procuratorate of China issued a warning relative to NFTs on the basis that they have crypto-like properties. However, the agency also acknowledged that NFTs do present a novel application of blockchain technology.Recent events, including the detention of former China Evergrande executives Xia Haijun and Pan Darong for alleged involvement in fraudulent activities, underscore the strict regulatory environment prevailing in China.Within the Chinese autonomous territory of Hong Kong, the South China Morning Post (SCMP) spun out Artifact Labs, an NFT company, following an initial decision in 2021 to launch an NFT standard called artifact.China Daily’s foray into the NFT space demonstrates that some facets of blockchain innovation are being leveraged within China, in this instance with a view towards cultural promotion and global engagement.