Filecoin staking platform crashed, Matrixport says ‘short ETH’: Asia Express

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

Chinese police created another crypto project

Funds disappear from Philcoin's liquid staking protocol STFIL after investigation by Chinese police.

“We believe STFIL's core technical team is being investigated by the local Chinese police,” STFIL developers tweeted on April 9, adding that lawyers have been hired to understand the current situation and provide legal assistance to the detained individuals.

However, despite confirmations, users' Filecoin stake on STFIL was moved to an unknown address, while the protocol's staff were arrested, which was linked to a number of “unusual, unplanned updates”. Blockchain data indicates that at the time of publication, more than 4.3 million FIL tokens worth about $40 million have been transferred to an unknown address.

Meanwhile, data from DeFi Lamashow shows that the total value of the protocol locked down has dropped from $95 million to $55 million last month. Law enforcement agencies in the country will target crypto projects they believe have bridged or orchestrated money laundered by illegal activities.

Before its collapse, STFIL offered users a yield of up to 9% annually by incorporating Filecoin and receiving investment income from their holdings. The STFIL pool was the second largest filecoin storage protocol at the time with around 2,500 users.

This was not the first time that the Chinese police blocked the Filecoin protocol. In the year In November 2021, a $55 million Filecoin miner was indicted by Chinese authorities for a multi-level marketing scheme and money laundering.

In the past year, Chinese authorities have been increasingly cracking down on crypto projects operating in the country, often causing collateral damage to foreign users of such protocols. Cross-chain bridge Multichain was shut down last year after Chinese police secretly arrested its CEO Zhajun He. Investor losses on the protocol are estimated to exceed $1.5 billion.

HashKey extends to retail investors

HashKey Capital, a major institutional digital asset manager in Hong Kong, on April 11 revised its licensing conditions to allow it to offer services to retail investors. Previously, he could only serve professional customers.

Deng Chao, head of HashKey Singapore and CEO of HashKey Capital, said the approval is an opportunity for Hong Kong retail investors to access regulated fund products in the digital asset market.

Since its inception, HashKey Capital has managed over $1 billion in client assets, and the company recently confirmed its partnership with Bocera International, paving the way for digital asset products, such as spot ETFs, for Hong Kong residents.

HashKey Exchange is one of two crypto exchanges approved for retail trading in Hong Kong, the other being OSL. Earlier this week, following in Coinbase's footsteps, HashKey Group launched over 20 coins and tokens for trading in Bermuda called “Hashkey Global”.

OSL to promote institutional crypto products in Asia

If we talk about Hong Kong crypto exchange OSL, it will soon expand its institutional crypto products beyond the city.

In an April 10 interview with analysts, OSL Group Chairman Xiong (Patrick) Pan said the exchange is looking at expansion opportunities in the Korean and Japanese markets to accommodate institutional investors. The company is looking to create local partnerships in the East Asian and Southeast Asian markets to improve business development.

Highlighting the growing importance of the spot Bitcoin ETF, Pan noted that the market had already peaked even before the halving. The group's CFO, Zhenbang Hu, pointed out that there has been a steady increase in virtual asset transactions since the third quarter of last year.

OSL is currently testing the launch of the Exchange app, with an updated version expected in late April or early May. Emphasizing their commitment to the business and consumer markets, Pan expressed the company's desire to go beyond SaaS offerings to serve more banks and financial institutions.

Back in January, Pan Cointelegraph said that the firm is currently exploring the Fund Token initiative for the tokenization of retail fund products for investors.

Matrixport recommends shorting Ethereum.

Singaporean crypto service firm Matrixport is trying to re-forecast the odds by shorting Ethereum (ETH) and long Bitcoin (BTC).

“We've previously criticized #Ethereum's update policy as we analyze the impact of each update on the value of #ETH,” the firm tweeted on April 8. “Ethereum's dominance has dropped from 19% to 16% due to Denkun's upgrade path. We recommend using ETH as a short (or hedge) on Bitcoin longs,” he wrote.

In the midst of a bull run, Matrixport has consistently published its predictions about possible market directions. In January, when bitcoin was trading at $40,800, Matrixport was criticized by investors after the U.S. Securities and Exchange Commission warned that it could not hold positions in bitcoin ETFs due to political risks during a tepid market selloff. The spot Bitcoin ETF was approved by the SEC shortly after.

Similarly, on February 28, Matrixport co-founder Daniel Yan warned that a 15% market correction is “imminent” following bitcoin's highest price since 2021. It made adjusted losses and new all-time highs.

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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.