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Binance Thriving in China Despite Crypto BanWhen China cracked down on cryptocurrency trading in 2021, it seemed like Binance, the world’s largest crypto exchange, would have to leave the country behind. However, nearly two years later, an investigative report carried out by the Wall Street Journal finds that business is thriving for Binance in China.Photo by Hanson Lu on Unsplash$90 billion in monthly tradingThe report, which was published on Wednesday, reveals that users managed to trade a staggering $90 billion worth of cryptocurrency-related assets in China within just one month.Internal data, shared with The Wall Street Journal and corroborated by current and former employees, unveils this underground activity. Remarkably, these transactions propelled China to become Binance’s largest market, accounting for a massive 20% of global trading volume, excluding trades by a subset of major traders.Almost one million active Chinese usersDespite the supposed ban, Binance’s internal discussions highlight the pivotal role China still plays for the exchange. Current and former employees indicate that Binance’s investigations team collaborates closely with Chinese law enforcement. This partnership aims to identify potential criminal activities among the 900,000+ active users in China, underscoring Binance’s efforts to maintain oversight.However, Binance now faces regulatory challenges tied to its secretive global operations. In June, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its Founder, Changpeng Zhao (CZ), alleging illegal operations and misuse of customer funds.Meanwhile, the Justice Department is conducting its own investigation. A report by Semafor on Wednesday suggests that authorities are considering fraud charges but they’re concerned that such an eventuality may lead to a run on the exchange. This regulatory onslaught has seen Binance’s market share among US users plummet, leading to a reduction of over 1,000 jobs out of its 8,000-strong workforce.Circumventing regulationThe clandestine existence of Binance’s footprint in China offers insights into the exchange’s ability to function surreptitiously in unwelcoming environments. To circumvent restrictions, Binance directed Chinese users to visit local websites with domain names before rerouting them to the global exchange. This tactic allowed Binance to keep a foothold in China, even after the government blocked direct access to its website in 2017.China’s central bank, responsible for imposing the crypto ban, remained silent when questioned about these developments. Binance’s official stance is that its website is blocked in China and inaccessible to users there.Holding on to its China-based users is crucial for Binance as it navigates a treacherous regulatory landscape that threatens its future. The company’s history with China is intricate. CZ established the firm in Shanghai in 2017, only for the government to initiate a series of regulatory attacks on crypto exchanges soon after. This led to concerns about money being illicitly moved out of the country, and Zhao eventually relocated Binance’s operations to Japan.Despite this move, Binance retained a significant workforce in China, a decision that raised concerns among its US arm regarding data control. Binance’s Chinese heritage also attracted attention, with Zhao addressing the company’s challenge of being labeled both a “criminal entity” in China and a “Chinese company” in the West.Binance’s relationship with China remains complex. As the exchange navigates these murky waters, its ability to operate under the radar and maintain its foothold in markets like China will undoubtedly play a significant role in determining its future trajectory.

Upbit Accidentally Accepts Counterfeit APT Tokens, Initiates Retrieval EffortsUpbit, South Korea’s largest cryptocurrency exchange, is reported to have accepted deposits of counterfeit Aptos (APT) tokens, mistaking them for their legitimate counterparts. The exchange has been reaching out to the sellers of these tokens by phone, requesting their recovery. This news has been circulating in several online crypto communities since the afternoon of September 24 (Korea Standard Time).Photo by Kenny Eliason on UnsplashUpbit’s responsesOn September 24 at 15:47 KST, Upbit announced a temporary suspension of deposit and withdrawal services for APT due to maintenance on the APT wallet. Following this, at 22:32 KST on the same day, Upbit explained that system maintenance was undertaken after identifying an unusual attempt linked to APT deposits. The crypto exchange went on to announce that the deposit and withdrawal services for APT would resume at 23:00 KST on the same day.DeFi degenerates’ insightsIn relation to this incident, Definalist, a group of DeFi degenerates based in Korea, shared insights on X (formerly Twitter). The group stated: “It seems that during the process of reflecting $APT coin deposits, there was a failure to check the type arguments, and all same functions transfers were recognized as the same APT native token. … If all APT ecosystem tokens were sent to Upbit’s wallet, they would have been mistakenly treated as APT native coins.”Decimal place differenceDefinalist also remarked on the fortunate nature of the counterfeit APT token having six decimal places, in contrast to the authentic APT token’s eight. They noted that if the deceptive token had mirrored the genuine token’s decimal places, the market disruption could have amplified a hundredfold. Meanwhile, the value of the counterfeit APT tokens deposited into Upbit is estimated to be about KRW 20 million (approximately $15,000).

GRVT (Gravity), a self-custodial hybrid crypto exchange, has received $5 million in funding from Abu Dhabi-based venture capital firm Further Ventures. That’s according to a report published by The Block on Jan. 21. GRVT seeks to blend the benefits of both centralized exchanges and decentralized exchanges in a hybrid model built using ZKsync’s Validium ZK Chain. The platform offers off-chain order matching paired with on-chain settlement at a rate of 600,000 transactions per second (TPS). Settlements are secure and verifiable on the blockchain, while the user maintains custody of his/her assets, and the order book infrastructure is nevertheless centralized.Photo by Towfiqu barbhuiya on UnsplashEquity-based funding dealThis latest equity-based funding round ran from October until it was closed out in December. Further Ventures, an entity that specializes in early-stage startup funding, led the round, making this its latest investment into a crypto-sector startup.  Earlier this month, the venture capital firm led a funding round into Paris-based crypto wallet technology firm Dfns. Last year, it collaborated with Singapore-headquartered crypto trading firm QCP Capital, in facilitating its expansion in Abu Dhabi.  Other crypto-related investments include staking services provider Twinstake, crypto custodian Tungsten, blockchain infrastructure platform Fuze and crypto derivatives platform Kemet Trading.  Further Ventures counts ADQ, Abu Dhabi’s sovereign wealth fund, among its investors. In 2022, it established a $200 million fund, which was earmarked for investment into early-stage startups in the fintech, digital assets and supply chain sectors. In the past, Hong Kong-based GRVT has held pre-seed and seed funding rounds that involved GRVT token warrants. On this occasion, the funding deal was structured as equity. GRVT CEO Hong Yea explained that equity was chosen as it was felt that the GRVT token should be held in reserve for the community. Additionally, structuring the funding round around equity means that the holding company has the freedom to pivot or expand into alternative business lines in the future. $14.3 million in funding to dateBack in October 2023, the project raised $7.1 million in funding based on a $39 million valuation. That round was co-led by Matrix Partners alongside Delphi Digital, with further participation by Susquehanna Investment Group, CMS Holdings, ABCDE and Hack VC. Matter Labs, the developer of the ZKsync scaling network that GRVT runs on, was also a participant.  This latest funding round brings GRVT’s total capital raised to $14.3 million. In March of last year, the firm had raised $2.2 million from a private token sale. Expanding spot & options tradingIt’s understood that the new funding will be used to expand the platform’s crypto spot and options trading. Furthermore, the firm has plans to acquire an upgraded full Class F license from the regulator in Bermuda. Currently, the Bermudan authorities have issued the company with a modified Class M crypto business license. In an effort to unlock its offering to a broader global market, the company also has plans to pursue a Markets in Crypto-Assets (MiCA) license within the European Union and a virtual assets service provider (VATP) license from the Virtual Assets Regulatory Authority (VARA) in Dubai.