Korea’s Most Populated Province to Conduct Survey on Unfair Crypto Trading

The Securities and Futures Commission (SFC), an independent statutory body that regulates Hong Kong’s securities and futures markets, has alerted investors to 33 suspicious websites which appear to be masquerading as HashKey, one of the Chinese autonomous territory’s first licensed virtual asset exchanges.Photo by Dan Freeman on UnsplashAlert listThe regulator flagged the websites by publishing their domain names to its alert list. Hong Kong’s SFC first published its alert list relative to suspicious crypto-related entities in November 2021. In terms of both suspicious trading platforms and suspicious crypto-related web links, the regulator has found 91 instances to date. Remarks added to the listing confirm that a HashKey company, Hash Blockchain Limited, had reported the websites to the regulator as fraudulent websites. The web domain links have been slightly modified when compared to official links to the HashKey website, in an effort to mislead HashKey customers. A little less than two weeks ago, HashKey published a statement to its website, making service users aware of the fraudulent links and websites. It stated: “Fraudulent websites will appear under different domain names or with slight modifications or variations of the official HashKey Exchange website address www.hashkey.com by adding a combination of letters, numbers or symbols.” The company added that it has no connection with these websites, that no affiliation exists with HashKey Exchange, and consequently the company doesn’t accept any liability for any matters relating to these fraudulent websites and links. As well as the regulator, HashKey has also reported the matter to the Hong Kong Police Force. Tackling crypto-related fraudBoth law enforcement and regulators in Hong Kong have been more proactive in tackling any signs of crypto-related fraud or potential scams following an episode of fraud involving an unlicensed Dubai-headquartered crypto exchange, JPEX, in 2023. At that time, the authorities within the Chinese autonomous territory received in excess of 2,369 complaints from Hong Kong residents who had been duped by the unregulated exchange. Overall, victims were out of pocket to the tune of $166 million. Some commentators had likened the JPEX scandal as being an “FTX moment” for Hong Kong, referring to the high profile collapse of Bahamas-headquartered crypto exchange FTX in November 2022. However, Hong Kong investors also suffered as a result of the FTX collapse.  In fact, the Hong Kong Monetary Authority (HKMA) and the SFC were listed as FTX creditors in 2023. The statutory bodies appeared on the FTX creditor list alongside 50 Hong Kong institutions. Towards the end of 2023, the agency issued a public warning regarding HongKongDAO and BitCuped, entities that were accused of misinformation. In February 2024, the SFC issued a reminder to investors within the Chinese autonomous territory to ensure that they’re only engaging with licensed cryptocurrency platforms. To date, the regulator has awarded crypto trading licenses to seven virtual asset trading platforms (VATPs). Earlier this month, the regulator extended use of its swift licensing process to all new applicants in an effort to fast-track the approval of more licensed platforms.

Blockchain technology and digital assets feature strongly in a fintech ecosystem report carried out by InvestHK, an agency within Hong Kong’s government responsible for foreign direct investment.Photo by Shubham Dhage on UnsplashGrowing fintech sectorThe recently published report, identified that as of July 2024, there were 175 blockchain application/software firms located in Hong Kong. In the area of cryptocurrency and digital assets, it identified the presence of 111 firms, while there were 122 payment and remittance firms. All in all, the report found that in excess of 1,100 fintech firms had been established in Hong Kong as of mid-2024. It highlights the fact that the sector has seen robust growth in Hong Kong in recent years, while making the point that this has come about in part due to “substantial resources” having been committed by the Hong Kong government to enable such growth within the local fintech sector. The report cites data from a study carried out by DataCube Research, which projects that the fintech market within the Chinese autonomous territory will reach $606 billion by 2032. This forecast incorporates an expectation of an annual growth rate of 28.5% over the course of the next eight years. As well as forecasting further growth for the fintech sector in general in Hong Kong, the InvestHK report also foresees artificial intelligence, blockchain and distributed ledger technology (DLT) and digital assets contributing to that growth. 250% blockchain startup growthThe research identifies that since 2022, there has been a 250% increase in the total number of blockchain-related startups that are located within the Hong Kong Special Administrative Region (SAR). The number of crypto and digital asset firms based in Hong Kong has grown by 30% during the same period.  Finding talentIn formulating this report, InvestHK surveyed 130 local fintech firms. One challenge that was identified through that process is the need for the appropriate talent to be in place in order to secure projected growth rates over the coming years. Hong Kong is having to compete on a global basis for appropriate fintech talent, with almost 60% of the companies surveyed by InvestHK suggesting that this is a major challenge. Taking cryptocurrencies as a key component for future growth, last year’s Bitcoin price surge led to a crypto hiring boom with some of the large global fintech companies actively hiring crypto talent.  Other centers such as Singapore are taking measures to attract that talent. Access to capital was another area of concern, with 44% of respondents indicating it as an area of difficulty. In an interview with English-language newspaper China Daily recently, Brian Ah-Chuen, managing director of ABC Banking Corp., said that InvestHK has been aggressive in its approach to certain initiatives. He said that the agency has been successful in drawing capital and talent from around the world to Hong Kong.

Wemade Launches NFT-Based DeFi Service to Empower Its EcosystemSouth Korean gaming company Wemade today launched NFTFi, a peer-to-peer decentralized financial service based on non-fungible tokens (NFTs), according to an official press release. The service is now accessible on Wemade’s DAO-powered blockchain NFT platform NILE, also known as NFT Is Life Evolution.Photo by Choong Deng Xiang on UnsplashBorrow and lend NFTsInitially, NFTFi will enable users to borrow and lend NFTs, with plans to introduce a swap function in the future. The service will support trading for all NFTs available on the NILE marketplace, including the NEITH NFTs unveiled in March this year.Through NFTFi, borrowers have the ability to secure WEMIX tokens or WEMIX Dollars by using NFTs as collateral. Borrowers can request loans, and lenders can review these requests and assess the conditions under which they are willing to lend their assets.The borrower who presents the most favorable borrowing terms will be selected, and the loan contract will be automatically executed. The NFTs provided as collateral will remain locked until the loan is fully repaid. In the event of failure to repay, ownership of the NFTs will be transferred to the lender.Effective asset managementNFTFi users will have the ability to evaluate the value of an NFT based on various data. Notably, NEITH NFTs offer effective asset management as their holders can claim the amount of WEMIX tokens at any time from the Covenant Date. This token eligibility feature contributes to the stability of NEITH NFTs.NILE expects that NFTFi will enhance the value of NFTs as financial assets and play a role in the sustainable growth of the WEMIX3.0 ecosystem.