Hong Kong Regulator Consults on Licensing Virtual Asset Platforms
Hong Kong’s Securities and Futures Commission (SFC) last week confirmed 1 June 2023 as the deadline for all centralized virtual asset trading platforms operating in the city-country to be licensed as it started consultation on proposals to regulate their activities.
The proposed regulatory requirements for trading platforms are comparable to those for licensed securities brokers and automated trading venues, while also affording SFC the opportunity to propose modifications to the existing regime.
The regulatory body seeks related comments on or before 31 March 2023, particularly on whether to allow licensed platform operators to serve retail investors and measures to be implemented for investor protection.
In a related development, Bloomberg reported that Hong Kong’s embrace of crypto businesses to help revitalize the city’s economy seems to have Beijing’s quiet backing.
China's Largest Internet Company Tencent Joins Web3 Ecosystem
Following its cooperation with Ankr, Avalanche, Scroll, and Sui, and the release of a new Cloud Metaverse-in-a-Box product, China's largest Internet company, Tencent, last week made its entry into the Web3 ecosystem public.
Through its cloud service business, Tencent Cloud, the global tech company notes that they expect more global partners to integrate their operations and services to adapt and scale into Web3, hence their readiness to work with industry partners to create a more immersive experience and a better Web3 ecosystem.
Tencent Cloud’s signed MoU with Ankr is to jointly develop a full suite of blockchain API services that offers a globally-distributed and decentralized network of Remote Procedure Call (RPC) nodes for builders to power their Web3 projects.
Date Set for Shanghai Upgrade to Deploy on ETH Testnet Sepolia
The Shanghai/Capella (a.k.a. Shapella) upgrade was last week scheduled for deployment on the Sepolia network on February 28, 2023.
The Ethereum announcement that the upgrade, which follows the Merge and enables validators to withdraw their stake from the Beacon Chain, will activate at epoch 56832.
Non-staking node operators and stakers have to update their nodes to a given version of their Ethereum client to be compatible with the Shapella upgrade on the testnet.
Otherwise, their client will sync to the pre-fork blockchain once the upgrade occurs and they will be stuck on an incompatible chain which will prevent them from being able to send Ether or operate on the post-Shapella Sepolia network.
New York Sues CoinEx for Illegal Business Operation
Crypto exchange, CoinEx, was last week sued by New York Attorney General Letitia James for reportedly transacting business illegally in the state. Aside from the claim of not registering its business, CoinEx was also accused of having "engaged in repeated and persistent fraudulent practices" in papers filed with a New York state court.
The exchange has since informed users in the US of its plans to discontinue its services citing regulatory requirements and asked them to withdraw their assets within 60 business days. By April 24, it says it will “gradually ban the relevant accounts” according to a Cryptoslate report.
Founders Charged in First DeFi Ponzi Scheme
Last week, four founders of a purported DeFi project, Forsage, were charged in a US court for allegedly perpetrating a global Ponzi and pyramid scheme that raised approximately $340 million from victim investors.
The defendants allegedly promoted Forsage to the public through social media as legitimate knowing fully that Forsage was a Ponzi and pyramid investment scheme. The case, which court documents show involves four Russian nationals, has been dubbed the first charged criminal fraud case involving a DeFi Ponzi scheme. According to a Justice Department’s Criminal Division official, the investigative tools used to unravel the $340 million fraud included blockchain analysis.
China’s Huawei Backs DeFi Project That Bridges TradFi
Huawei’s interest in a decentralized finance (DeFi) project last week saw the Chinese multinational tech company release a promotional video for the startup called Defactor. The Defactor project seeks to bridge traditional finance (TradFi) to the new world of DeFi by teaching and helping TradFi players to use trapped liquidity in the DeFi environment. Defactor participated in the Huawei International Scale-Up Programme in Ireland.
With the Defactor’s native FACTR token scheduled to list on ProBit Global on March 9, the platform believes that providing access to this new connected economy will empower a new age of financial freedoms.
FTX Founder SBF Faces New Criminal Charges
Last week, a new 12-count indictment was unsealed against FTX founder, Sam Bankman-Fried (SBF), who has been under house arrest on a $250 million bond. The new criminal charges add to the eight counts that he was initially indicted for last year.
The new indictment includes charges of conspiracy to commit bank fraud, defraud the Federal Election Commission, commit wire fraud on FTX customers, securities fraud on FTX investors, and conspiracy to make unlawful political contributions by using the names of two other FTX executives. The 39-page document notes that one executive “ultimately became — at least in name — one of the largest Democratic donors in the 2022 midterm elections.”
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