Hong Kong Bitcoin ETF Launches in ‘Top 20%’, STRK Scam Suspected: Asia Express

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

Hong Kong spot bitcoin and ether eff sad.

Six Hong Kong spot bitcoin and ether ETFs attracted $292 million from three issuers on launch day, with ether accounting for about 15% of the total. Expectations skyrocketed due to the billions of dollars in demand for US spot bitcoin ETFs in the first week of its debut in January, disappointing many.

“We all tried to warn against the expected HK downgrade,” said Eric Balchunas, senior ETF analyst at Bloomberg.

“That said, if you crunch the numbers, this was huge: for example, the ChinaAMC Bitcoin ETF took in $123m on day one, which already ranks it 6th out of 82 ETFs launched in HK in the past 3 years, and in the top 20% overall.”

Market participants, however, were less impressed. At the time of publication, Bitcoin and Ether have lost 10% of their value in the past month. According to data from Arkham Intelligence, for two ETFs, the Bosera HashKey Bitcoin ETF and the Bosera HashKey Ether ETFs, the AUM figures came almost entirely from pre-listing subscriptions, while the initial period of trading volume post continued.

The result should not have been surprising.

Due to capital restrictions, Hong Kong crypto ETFs are only accessible to the city's 7.5 million residents and some overseas traders. The more than 1.4 billion mainland Chinese residents are barred from entering the EFF without prior Hong Kong residency. Additionally, Hong Kong residents can access US spot Bitcoin ETFs before local ETFs are approved.

That said, not everyone is bullish on the prospects of ETFs. According to a recent survey by Hong Kong crypto exchange OSL, 77% of crypto investors in the East Asian city plan to invest in local Bitcoin and Ether ETFs.

“This positive investor sentiment reflects the growing acceptance and importance of digital assets in the region's economy, and Hong Kong is once again making its mark as a digital asset hub,” wrote Gary Tiu, OSL's executive director and head of regulatory affairs.

Similarly, Balchunas said in a follow-up post that the Hong Kong crypto ETF's performance was “ahead of schedule,” with $292 million AUM on its first day. The analyst had previously set an AUM target for Hong Kong ETFs over a two-year period, which is still ten billion dollars below that managed by US spot Bitcoin ETFs.

An airdrop farmer was beaten by the Chinese police

Although most cryptocurrencies are illegal, Chinese police arrested a man known as “Lan” for allegedly defrauding 40,000 STRK, $120,000 at the time, from Ethereum's layer-two solution, the official weather service Starknet. The officials said: “Recently, the Cyber ​​Security Brigade of the Xiangyuan County Public Security Bureau received a report from the victim that 40,000 STRK coins contributed to STRK's official development program were fraudulently claimed by others.

“With the support of the Cyber ​​Security Detachment of the Changxi Municipal Public Security Bureau, the Xiangyuan Cyber ​​Police identified the coin theft suspect as Lan, a native of Meizhou, Guangdong Province, based on relevant clues.”

Lan, who appears to have publicly bragged about airdrop theft on Twitter, said on Starknet's official Airdrop request form that he first checked Starknet on GitHub, “picked some contributors” at random, and eventually “copied their names/efforts.” To receive STRK. The Chinese police went on to say:

“He sought employment certificates submitted by others, impersonated other people and submitted more than 40 forms and claimed the money falsely. The victim's 40,000 STRK coins were transferred to his OKX wallet and converted into 91,000 USDT coins (more than 637,000 yuan).

In the year

Despite earlier warnings, accounts from weather farmers and copycat accounts are said to be included in the official airdrop. The project exceeded its fully leveraged market capitalization by $13 billion.

Binance closes Hong Kong-based entity

HKVAEX, a Hong Kong-based crypto exchange allegedly linked to Biance, has ceased operations as of May 1.

HKVAEX staff wrote, “We have stopped the registration of new users and stopped all trading and deposit activities for existing users.” “If you have any problems or need help, especially after the forum has been deleted, please do not hesitate to contact our support.”

Users who do not withdraw assets after closing will be charged a “trustee fee of USDT 20 or equivalent fee with other virtual assets” in weekly snapshots starting May 1st.

A few months ago, HKVAEX withdrew its application for a crypto exchange license in Hong Kong. According to Wu Blockchain, the X account withdraws money for various reasons, including a request to change the audit firm or provide additional information. The company did not give an official reason for the resignation.

The end of an era for Binance

Changpeng Zhao, the famous founder and former CEO of crypto exchange Binance, has been sentenced to four months in prison after being found guilty of money laundering.

“I will do my time, finish this chapter and focus on the next chapter of my life,” wrote the former blockchain executive. I will be a passive investor (and holder) in crypto. Our industry has entered a new phase. Compliance is extremely important,” he added.

Chinese-born Canadian citizen Zhao co-founded Binance in 2017 with his spouse Yi He, a Chinese television personality, after a brief stint as CTO of crypto exchange OKCoin (now OKX).

Under his leadership, Binance will quickly become the largest crypto exchange with over 50% market share. The exchange is now prominent in the industry as it has pioneered services such as swaps, earnings, API bots, farm pools, initial offerings, NFT marketplaces, self-contained wallet exchanges and more.

However, the exchange's rapid growth comes at the cost of not maintaining an adequate compliance program. Last November, the exchange announced a $4.3 billion settlement with the US Department of Justice over money laundering charges. Zhao also stepped down as CEO as part of the plea deal.

Binance's new CEO, Richard Teng, said that since the early days of Binance, “compliance gaps” have been tight in the past and that the crypto exchange is now “completely different.”

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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.