ProBit Bits — ProBit Global’s Weekly Blockchain Bits Vol. 73

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 Hong Kong Clamps Down on Illegal Crypto Firms Following JPEX Fallout

Hong Kong authorities arrested 6 people linked to crypto exchange JPEX after over 1,400 complaints of fraud and frozen funds. Police detained influencers like Joseph Lam, seizing assets including luxury items and crypto worth around $128 million.

JPEX operated unlicensed in Hong Kong, relying on misleading promotions from social media influencers, per the city's Securities and Futures Commission. After the watchdog's warning, JPEX hiked withdrawal fees to $1,000 amid liquidity issues blamed on third parties. In response, Hong Kong aims to tighten crypto oversight, reminding investors to use only licensed platforms. The case exposed vulnerabilities as Hong Kong tries to become a crypto hub. But it also showed regulators will crack down on illegal operations. JPEX claimed external factors caused its trading halt after the fraud accusations surfaced. The debacle has undermined trust, however, with an estimated 8,000 people affected and $100 million in losses.

 CoinEx Cautiously Restarts Deposits and Withdrawals Post-Hack

Cryptocurrency exchange CoinEx is resuming deposits and withdrawals after a $70 million hack compromised its hot wallet private keys. CoinEx rebuilt its wallet system and will allow transactions for select coins like BTC and ETH starting Sept. 21.

The exchange warned users not to deposit into old addresses, as funds would be lost. CoinEx said it implemented a 100% asset reserve policy to protect users following the breach, which security firm Elliptic linked to North Korean hackers. CoinEx maintained that users' assets were not affected by the hack. The exchange's foundation would cover any losses. CoinEx is gradually restoring full service across hundreds of cryptocurrencies after deploying improved security measures.

 PayPal Enables PYUSD Buys on Venmo, Aims for Wallet Interoperability

PayPal has rolled out its PYUSD stablecoin on the Venmo app, enabling users to purchase and transfer the Ethereum-based token. PYUSD is now accessible to select Venmo users, with a full launch coming in the next few weeks.

PYUSD is a dollar-pegged stablecoin backed by cash equivalents and short-term treasuries. It launched on exchanges last month but is now expanding to Venmo's payment platform. Users can buy PYUSD within Venmo and transfer to other users or PayPal wallets with no fees. PayPal touted this as the first time stablecoin transfers can occur at scale with no costs. However, fees apply for sending to external wallets. PYUSD currently has a market cap around $44 million, dwarfed by major stablecoins. The move aligns with PayPal's goals of making PYUSD part of the mainstream payments infrastructure, leading crypto advocates to suggest it may be a step toward greater stablecoin adoption.

 Republicans Advance Anti-CBDC Bill in House, Future Uncertain in Senate

The U.S. House Financial Services Committee advanced a bill to block development of a central bank digital currency by the Federal Reserve. The legislation would ban CBDC pilot programs and require explicit Congressional approval for any digital dollar progress.

Republicans led the initiative, arguing a CBDC could enable government surveillance of citizen transactions. The bill aims to ensure digital currency policy reflects privacy and free markets. Its future is uncertain in the Democrat-controlled Senate. The move comes despite lack of an actual CBDC proposal, with the Fed still researching options. But it signals Republican opposition to perceived Biden administration digital currency ambitions. Democrats accused them of an anti-innovation stance that could undermine the dollar's status.

Though unprecedented, the House bill faces doubts in the Senate Banking Committee. Its passage would prevent the Fed from issuing or researching retail CBDCs without Congressional mandate. Supporters say it protects privacy, but critics contend it keeps the U.S. behind on digital currency adoption.

 Singapore Police Ramp Up Efforts in $1.76 Billion Money Laundering Investigation

Singaporean authorities have updated the total value of assets seized in the country's largest money laundering crackdown to S$2.4 billion, more than initially reported. Police stated new seizures included over S$76 million in cash, 68 gold bars, more than S$38 million in cryptocurrencies, and over 110 properties and 62 vehicles worth more than S$1.2 billion.

Last month saw 10 Chinese citizens arrested and initial asset seizures of S$1 billion, including S$23 million in cash, luxury homes, vehicles and Swiss bank accounts. The amount was later revised to S$1.8 billion. Details on the fresh seizures were not disclosed. The huge sums point to the scale of illicit activity plaguing Singapore's reputation as a financial hub with low crime, raising ongoing scrutiny from authorities aiming to curb exploitation for money laundering.

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