Asia Express – Cointelegraph Magazine

East Asia's weekly news roundup reviews the industry's most important developments.

3AC Creditors taken over by Worldcoin?

Creditors of bankrupt Singaporean hedge fund Three Arrows Capital (3AC), owed a total of $3.3 billion, may finally get some respite this week with the help of Sam Altman.

That's because Altman's Worldcoin (WLD) has surged more than 200% this week, which viewers have linked to the launch of OpenAI's Sora video tool. The rally showed the WLD wallet address held by 3AC Liquidity Teneo exceeded $700 million.

3AC founder Zhou Su was very excited about the lineup. In 2021, this WorldCoin investment is highly hated,” he said. “I remember the pieces on him were so bad that most of his race refused to tweet in support of him.”

“I will not benefit from WLD's excellence, but I am pleased that 3ac Lenders has one of the largest positions in WLD in the world.”

However, there is a catch. 3AC wallet balances account for 90% of the token distribution supply, meaning a flash crash is highly likely if lenders attempt to withdraw funds.

Similarly, 3AC liquidators received 134.78 million Ethereum layer-2 solution STRKnet (STRK) tokens in this week's climate, with a peak value of $943.46 million when STRK trading opened on Binance. The token has lost 74% of its value since then.

In December, a British Virgin Islands court froze $1.14 billion worth of 3AC's remaining assets, and bankruptcy proceedings are currently underway.

CCP sues foreigners for spying crypto payments

The Chinese Communist Party (CCP) is targeting foreigners for allegedly using crypto as a means to facilitate intelligence gathering in mainland China.

According to a report by the Ministry of State Security (MSS), the CCP's national security department said foreign mapping companies are posting crypto bonds to encourage Chinese contractors to purchase surveying equipment and transfer real-time geographic information inside the country to foreign servers. .

“Some people in the country have poor understanding of national security and are tempted to earn money by scanning maps,” MSS wrote.

Unknowingly, they are used by foreign companies with ulterior motives and become complicit in the illegal collection and theft of geospatial data.

Currently, foreign companies seeking geo-scanning in China must obtain prior approval from the country's military authorities or face severe penalties under the country's anti-espionage laws. Over the past year, China has cracked down on any crypto-related activities as the country's growing presence of technology in money laundering and financial crimes.

USDC to stop supporting Tron

The USD Coin (USDC) Issuing Circle is ending support for its native stablecoin on Tron.

In the year Users have until February 2025 to exchange their TRC-20 USDC for other assets, and large holders can redeem them directly through Circle at a 1:1 ratio in USD.

“As Circle only serves commercial and institutional customers, retail users and other non-Circle customers can transfer USDC via Tron to an exchange or distributor on another blockchain that supports USDC,” he wrote.

Currently, approximately $335 million USD is deposited on the Tron blockchain. While Circle did not disclose any reason for the shutdown, the Tron blockchain has been under control of late. Last year, the United States Securities and Exchange Commission charged Chinese blockchain icon Justin Sun with selling Tron Token (TRX) as an unregistered security and inflating trading volume on the blockchain. The lawsuit is ongoing.

Cointelegraph contacted Tether about ending support for Tron, but they danced around the issue and neither confirmed nor denied.

Huobi eyes the expansion of Hong Kong

Huobi HK, the Hong Kong cryptocurrency exchange HTX (formerly Hubei Global), another entity owned by Justin Sun, has applied for a retail cryptocurrency trading license in the city. In an updated applicant list with the Hong Kong Securities and Futures Commission (SFC), Huobi HK is listed along with other centralized exchanges such as Crypto.com, Bybit and OKX.

Huobi Global is currently embroiled in a trademark dispute with X-Spot Global Limited, another crypto firm created by its co-founder Leon Li, over the use of the Chinese equivalent of the “Huobi” trademark in Hong Kong.

In May 2023, Justin Sun published a series of allegations against Wei Li, Leon Li's brother. Sun tweeted that Wei received millions of Huobi Tokens at zero cost “in a different way” and accused him of “constantly selling and cashing out these HTT tokens.”

On Huobi HK, users can trade Bitcoin, Ethereum, altcoins and various stablecoins. However, access is only permitted to Hong Kong residents who qualify as professional investors and financial institutions. While there are about 20 applicants seeking to license trading exchanges for retail investors, only two firms, OSL Exchange and Hashkey Exchange, have been licensed since last August.

New rules for HK crypto guardians

The Hong Kong Monetary Authority (HKMA) has issued new regulations for the city's digital asset custodians that will take effect in August.

According to the February 20 directive, authorized institutions (AIs) must distribute the crypto private keys that hold hot and cold wallets to multiple employees so that “no single party has full control of the keys.”

Additionally, a certain majority of members must co-sign transactions to ensure that no one person has full access, preventing interruption of operations when a slip is lost.

“An AI must closely monitor trends and developments in emerging security threats, vulnerabilities, attacks and fraud risks, as well as technology solutions. Regularly assess the adequacy and strength of security risk controls, taking into account emerging threats and technological advances; It sets out best practices and measures to ensure compliance with relevant international standards.

AIs cannot delegate the protection of digital assets to other organizations, such as DeFi protocols, unless authorized by the SFC. “It is AI's responsibility to ensure that the agent or service provider properly identifies a customer's digital assets,” the SFC wrote.

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Zhiyuan Sun

Zhyuan Sun is a reporter at Cointelegraph, focusing on technology-related news. He has several years of experience writing for major financial media outlets such as The Motley Fool, Nasdaq.com and Seeking Alpha.