Korean regulators pressured to approve crypto ETFs following ETH ETF approval in the U.S.

As cryptocurrencies increasingly position themselves as a recognized asset class and potential hedge against fiat inflation, illicit activity tied to digital tokens is becoming more visible. A recent high-profile case in the UK has brought this issue into sharp focus, centering on a fraud scheme originating in China. According to BBC News, the case involves Qian Zhimin, a woman who raised funds from more than 100,000 investors in China by claiming to operate a crypto mining company that also develops health products. Instead, she laundered the proceeds and fled the country. On Nov. 11, Qian was sentenced to 11 years and eight months in prison by a UK court.Photo by Vasilis Chatzopoulos on Unsplash$6B fraud and lavish lifestyle​Qian entered Britain on a forged passport in September 2017 and proceeded to live an extravagant lifestyle, renting a mansion in Hampstead for over £17,000 ($22,700) per month. She was arrested in northern England in April 2024, and it was found that she held roughly 61,000 Bitcoin, valued at roughly £5 billion ($6.6 billion), having converted portions of her holdings to cover her substantial living expenses. ​The sheer scale of her wealth was revealed after police searched her rented residence, discovering the Bitcoin reserves on hard drives and laptops. It marks the largest crypto seizure ever recorded in the UK. During the raid, officers also found four other individuals at the property illegally employed to handle household tasks such as shopping, cleaning, and security. ​Since Qian’s arrival in the UK, the value of her Bitcoin holdings has appreciated more than 20-fold. With the fraudster now sentenced, victims are seeing a glimmer of hope for restitution. A civil case scheduled for early next year will determine the fate of the seized assets. However, while many defrauded Chinese investors are reportedly preparing to file claims, establishing a clear paper trail may prove difficult. Many victims routed funds through local intermediaries rather than transferring them directly to Qian’s firm. ​U.S. Bitcoin forfeiture and Beijing’s allegationsWhile the UK courts grapple with the aftermath of Qian’s fraud, a separate crypto controversy is brewing between the U.S. and China, highlighting Beijing's continued vigilance over the sector despite its 2021 ban on trading and mining. According to Cointelegraph, the state-supported National Computer Virus Emergency Response Center (CVERC) has alleged that American authorities are connected to the disappearance of roughly 127,000 Bitcoin, valued at around $14.5 billion, from the LuBian mining pool. ​These allegations surfaced after the U.S. filed a civil forfeiture claim in October against Chen Zhi, the Cambodia-based founder of the Prince Group, who is believed to have owned the assets prior to the breach. At the time of the filing, the U.S. Treasury Department noted that the funds were already under its control. ​CVERC contends that Washington hasn't explained how it accessed the assets. Citing data from analytics firm Arkham, the Chinese agency suggested the funds had been under U.S. control for over a year. They argued that the prolonged inactivity of the Bitcoin before the formal seizure is inconsistent with the typical behavior of hackers seeking quick profit, implying state-level involvement. Economic chess between Washington and BeijingThis matter of Bitcoin control adds a new layer of complexity to U.S.–China relations, even as a trade truce between the two countries took effect on Nov. 10. In a report by CNBC, Washington cut tariffs on China’s fentanyl-linked imports to 10% and extended a reciprocal rate reduction under that agreement. In exchange, Beijing is said to have eased certain restrictions on rare earth exports. Analysts at Morgan Stanley suggest that China is maintaining its export-control regime, implemented in April, to retain strategic leverage. They caution that recurring negotiations and strategic divergence will remain defining features of the evolving bilateral relationship. 

Korean Assembly Mandates Crypto Disclosure Amidst Lawmaker’s ScandalThe Korean National Assembly’s plenary session passed amendments to a couple of acts today that mandate lawmakers and senior government officials to report their cryptocurrency assets, according to news agency News1.Photo by Tingey Injury Law Firm on UnsplashAmendments to two actsIn an afternoon session, the National Assembly passed two amendments: one to the National Assembly Act and another to the Public Service Ethics Act.The amendment to the National Assembly Act, which had been approved by the Special Committee on Political Reform on Monday, specifically addresses the issue of cryptocurrencies and their potential conflict of interest for lawmakers. Likewise, the amendment to the Public Service Ethics Act, which had been approved by the Public Administration and Security Committee on Monday, imposes a requirement on lawmakers and high-level civil servants to disclose their cryptocurrency holdings.Mandatory crypto disclosureConsequently, starting from the 22nd National Assembly, lawmakers will be obligated to disclose their cryptocurrency assets. Additionally, the current 21st National Assembly will be required to disclose the cryptocurrencies they held and traded between the beginning of their term and May 31 of this year, with the disclosure deadline set for the end of June.A lawmaker’s crypto scandalThese legislative actions were prompted by allegations surrounding lawmaker Kim Nam-kuk, who was purportedly in possession of 800,000 WEMIX tokens from January to February of last year, potentially valued at up to 6 billion KRW (around $4.5 million). Concerns were raised regarding possible insider trading and conflicts of interest due to Kim’s ownership of these tokens.

Canaan’s Record Q2 Revenue Amid Profitability StruggleCanaan, a Singapore-based player in the Bitcoin mining sector, has reported a remarkable surge in its Q2 Bitcoin mining revenues, reaching an all-time high of $15.9 million despite continuing to struggle to achieve profitability.The growth, a 43.3% increase quarter-over-quarter, is attributed to the heightened sale of computing power in comparison to Q1, as indicated by the company’s unaudited second-quarter results, which were released on Tuesday.Photo by Rifath @photoripey on UnsplashRevenues boosted by multiple factorsThis surge in revenues was propelled by a range of factors, including the recovery of Bitcoin’s price, amplified computing power, and increased rewards. Notably, Canaan managed to sell 6.1 million TH/s worth of computing power. This marked 44.2% growth when compared with the previous quarter and an 11.7% surge from the same period last year.Despite this surge, Canaan’s overall financial status continues to exhibit challenges in terms of profitability. The company encountered $30.6 million in mining costs during the second quarter, which significantly contributed to a total net loss of $110.7 million for the same period. This net loss reflects a considerable increase from the $84.4 million reported in Q1 and starkly contrasts with the net profit of $90.1 million achieved in the corresponding period of the previous year.Inventory write-downs and impairment chargesThese losses can be attributed to several factors, including an inventory write-down and impairment of property and equipment. Nangeng Zhang, Canaan’s Chairman and CEO, addressed the complexities the company faces in the current market.He noted: “Admittedly, we are still facing a market that has yet to recover with soft purchasing power on the demand front, generating continued pressure on our sales.” Zhang also acknowledged that the company faced challenges stemming from regulatory changes and contractual breaches from a particular partner.Bitcoin mining difficulty and hash rates also proved to be a challenge for Canaan. The Bitcoin network hashrate currently stands at 326.26M by comparison with 226.91M a year ago. An ever higher hashrate is ordinarily a bullish sign for Bitcoin. However, Canaan has to deal with the higher cost of mining even though the Bitcoin unit price has not responded proportionally to meet that all-time high hashrate.While Canaan’s Q2 performance reflected resilience and expansion into new mining projects in Africa and South America, the company’s financial struggles underscore the ongoing volatility and uncertainty in the cryptocurrency space.In terms of cryptocurrency holdings, Canaan disclosed that it held 1,125 Bitcoin with a total carrying value of $28.8 million as of June 30. This inventory included both company-owned Bitcoin and those received from customer deposits. The company also noted an impairment on its cryptocurrency holdings in Q2, amounting to $2.4 million.Looking ahead, Canaan projected its Q3 total revenues to approximate $30 million, acknowledging the persistently challenging market conditions that are prevalent in the industry. The company remains vigilant about its financial outlook as it strives to navigate through the evolving landscape of the cryptocurrency market.In a recent announcement, Canaan unveiled plans to introduce a “groundbreaking, industry-redefining product that will shape the future of Bitcoin mining.” The debut is scheduled for September 12, coinciding with a gala event that commemorates the company’s 10th anniversary.