‘Hong Kong FTX’ victims win lawsuit, bankers stabilize coin: Asia Express

The victims won the first civil action against the Hong Kong FTX

A Hong Kong court has ruled in favor of two investors who filed a civil suit against Dubai-based cryptocurrency exchange JPEX and affiliate Web 3.0 for technical support.

In the judge's decision, 1.85 million Hong Kong dollars (about $238,000) will be returned on behalf of the plaintiffs.

“What a new judgment this is. [shows] Victims of cases related to virtual currency have obtained judicial services and serve as an example to all victims in the same position who yearn to get their cryptos back, but may lose what options they have other than waiting for the outcome. A criminal investigation,” Joshua Chu, co-chairman of the Hong Kong Web3 Association and a lawyer representing the plaintiffs, told the magazine.

“They can take their own action and the police will in any case need a court order for the victims to hand over the seized property.”

Chu said victims of virtual currency fraud in Hong Kong face challenges in recovering money due to limited conditions and a lack of specialized legal knowledge.

This problem is exacerbated by the six-year statute of limitations on civil cases, which allows bad actors to hope to meet the deadline.

Chu and his clients are now seeking enforcement action to recover the funds under police custody. Local officials froze about $29 million in April in connection with the case.

The JPX scandal first surfaced in September 2023 when Hong Kong's Securities and Futures Commission (SFC) warned that the exchange was unlicensed.

The scandal has been compared to the collapse of Hong Kong's FTX due to its mismanagement, lack of transparency, large investor losses and massive underfunding.

The slowdown in exits and subsequent arrests has been a setback for the local industry as the city government conducts regulatory discussions to make Hong Kong a regional hub for digital assets.

The SFC has been very cautious in issuing licenses, with only three exchanges receiving licenses to date.

Gemini's APAC expansion continues with Singapore's in-principle approval

Gemini has announced that it has received initial approval for Singapore's Major Payments Institution (MPI) license.

The MPI license allows businesses to offer cross-border transfers and digital payment token services.

Currently, Singapore has 28 “digital payment token” businesses that have been granted an MPI license by the Monetary Authority of Singapore's city-state Central Bank.

While the license allows for commercial ties, Gemini has prioritized its Singapore office, known as the APAC hub, and its India office for engineering and operations.

The APAC region is expected to continue to approve more crypto exchanges in the region, particularly Hong Kong, Singapore's regional rival.

So far, Hong Kong has only issued three permits, but it is expected to increase approvals.

At Hong Kong FinTech Week on Oct. 28, the city's financial secretary, Paul Chan, said more licenses are expected to be issued “in the next couple of months.”

The addition of licensed crypto service providers will provide Hong Kong investors with more secure platforms to trade—an important lesson highlighted by the JPEX case.

Collecting central banks turns into a stable coin release.

Reserve Bank of India Governor Shaktikanta Das has criticized the central bank's digital currencies (CBDCs), the shilling, and the stablecoin, which has been integrated into India's payment system with 500 million transactions per day.

“I have a very strong position on these stablecoins and all that,” Das said at the G30's 39th annual global banking seminar.

Das participated in a panel discussion with Agustin Carstens, CEO of the Bank for International Settlements, and Andrew Bailey, Governor of the Bank of England.

“Money, fiat currency, must be issued by a central bank on behalf of the sovereign. Stablecoin is a private currency. The big question is, are we comfortable letting private funds dominate the payment system, or are we comfortable having a fiat currency, a central bank currency, to control the entire ecosystem around transactions and payments? Das said.

Das then admitted that he is “very uncomfortable” with stable coins and private sector money, he sees no benefit to them.

Last week, local media cited anonymous insiders as saying that India was considering banning private sector currencies like Bitcoin and Ethereum. One of the insiders said CBCCs could do with any cryptocurrencies while offering additional benefits.

The RBI had previously tried to restrict cryptocurrencies in nations by banning local banks from servicing the sector, but the ban was later reversed by the country's Supreme Court.

Das said the central bank was “not in too much of a hurry” to announce a nationwide rollout.

India's Digital Rupee Pilot It was launched in late 2022 and, according to RBI, has been testing various use cases such as offline payments and programmability with 5 million users.

China, which was among the first to develop among major economies, has been testing its digital currency in select regions since April 2020.

Crypto fraudsters have been busted using stolen funds to buy luxury condos.

Thai authorities have busted an international gang of fraudsters who defrauded a local woman of 21 million baht ($620,000) to buy a luxury Bangkok condominium, local media reported.

Five suspects have been arrested.

The victim, “Ms. Malika,” was lured by a Facebook page promoting stocks and crypto investments.

After engaging with scammers, she was lured to communicate on LINE messenger to make more crypto transfers under the guise of growing her investment portfolio.

Investigators have discovered that the gang operates in a variety of roles. Cambodian national “Mr. Moon” and Myanmar national “Mr. Ko” coordinated money transfers to a Burmese broker, disbursing the money into different accounts.

The funds eventually went to “Ms. San” and “Mrs Tuwai”, both from Myanmar, used the illegal proceeds to buy a high-end condo in Bangkok's Rama 9 district, which is developing as a commercial hub in the capital.

Officials reportedly believe the property was intended for immediate flipping.

John Yun

Yohan Yun is a multimedia journalist who has been reporting on blockchain since 2017. He has contributed to the crypto media outlet Forkast as an editor and covered Asian tech stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking and experimenting with new recipes.