Navigating the ever-evolving world of cryptocurrency can feel like riding a rollercoaster. One day you’re soaring on news of institutional adoption, the next you’re bracing for regulatory shifts. This week has been no different, offering a mixed bag of developments across Asia. From Hong Kong’s regulated exchanges stepping up their game with insurance to China reinforcing its firm stance against crypto, and the Philippines exploring innovative tokenized bonds, let’s dive into the key headlines shaping the crypto landscape.
Is Crypto Insurance Finally Becoming Mainstream? Hashkey Exchange Leads the Charge in Hong Kong
In a move signaling growing maturity within the crypto space, Hashkey Exchange, a pioneering regulated crypto exchange in Hong Kong, has announced a significant step towards investor protection: insurance coverage for digital assets. This isn’t just any insurance; it’s a comprehensive policy designed to safeguard client funds held in both hot and cold wallets. Let’s break down what this means:
- Extensive Coverage: Hashkey’s policy, underwritten by fintech firm OneDegree through OneInfinity, covers a substantial portion of assets. Specifically, it insures 50% of digital assets in cold wallets and a full 100% in hot wallets.
- Significant Payout Range: In the event of a successful claim, the payout can range from a minimum of $50 million to a hefty $400 million. This provides a robust safety net for users in case of unforeseen security breaches or other covered events.
- Beyond Insurance: The partnership with OneDegree goes beyond just insurance. They will jointly develop advanced crypto security solutions aimed at bolstering Hashkey’s infrastructure. This includes measures to manage server downtime, ensure robust data backup systems, and optimize load control – all critical for a reliable and secure trading environment.
Livio Wang, COO of Hashkey Group, emphasized the dual benefit of this insurance. It not only meets the stringent requirements set by Hong Kong’s Securities and Futures Commission (SFC) but also significantly enhances their overall infrastructure. This, in turn, provides customers with more comprehensive protection and peace of mind.
Hashkey’s ambitions don’t stop at insurance. They are actively seeking to expand their offerings by planning to list four major altcoins, pending approval from the Hong Kong SFC. Since receiving its operational license in August, Hashkey has witnessed impressive growth, attracting over 120,000 customers and achieving a cumulative trading volume exceeding $10 billion. This highlights the increasing appetite for regulated crypto platforms in the region.
However, accessing this regulated space comes at a cost for token developers. Hashkey has announced a non-refundable application fee of $10,000 just to consider listing a coin or token. If the listing proceeds, developers should anticipate total costs ranging from $50,000 to a significant $300,000, excluding any due diligence or advisory fees. This high barrier to entry might shape the types of projects that can gain traction on regulated exchanges like Hashkey.
OSL Secures $91 Million Investment: Bullish Signals for Hong Kong’s Crypto Market?
Adding to the positive momentum in Hong Kong’s crypto market, BC Technology Group, the parent company of another licensed exchange, OSL, has secured a substantial $91 million strategic investment from BGX crypto group. BGX CEO Patrick Pan hailed the investment as a reflection of their strong belief in the “immense potential of the digital asset market.”
This investment comes amidst earlier reports from Bloomberg suggesting that BC Technology Group was exploring spinning off OSL for $128 million, which the company denied at the time. Whether or not a spin-off is still on the table, this significant investment underscores the growing interest and capital flowing into Hong Kong’s regulated crypto ecosystem.
The Block Gets a New Lease on Life: Fresh Capital and Asian Expansion
In the media landscape covering crypto, The Block, a well-known crypto news publication, has announced a major development. Singaporean venture capital firm Foresight Ventures has acquired an 80% equity stake in The Block for $60 million. Despite this acquisition, The Block will continue to operate as an independent entity.
CEO Larry Cermak stated that this deal provides “The Block a fresh start ahead of the bull market” and injects significant capital to fuel new product development and expansion into Asia and the Middle East. Foresight Ventures CEO, Forrest Bai, highlighted that acquiring The Block significantly strengthens their position within the cryptocurrency sector.
This acquisition marks a turning point for The Block, which previously faced challenges stemming from the FTX scandal. Former CEO Mike McCaffrey’s undisclosed loans from Sam Bankman-Fried, used partly to buy out his shares, cast a shadow over the publication. Coupled with the broader market downturn, The Block had reportedly laid off a third of its staff. This new investment offers a chance for revitalization and strategic growth.
China’s Crypto Ban: Courts Double Down on Restrictions
While Hong Kong embraces regulated crypto activity, mainland China continues to reinforce its stringent crypto ban. A recent ruling by a third Chinese court has declared a crypto investment contract void, citing that cryptocurrencies violate the spirit of the ban and are not protected under Chinese law, at least in civil disputes.
The Liaoning Zhuanhe People’s Court detailed a case where a plaintiff, Wang Ping, lent the equivalent of $552,300 in Tether (USDT) to a friend for altcoin investments in 2022. Following losses, Wang sued for the return of the principal, but the court sided with the defendant, Zhao Bin.
The judge ruled that crypto transactions are classified as “illegal activity” in China. Consequently, “virtual currency and related derivatives violate public order and good customs, and the relevant civil legal actions are invalid, and the resulting losses shall be borne by them.”
This ruling aligns with previous precedents set by Chinese civil courts this year, solidifying the legal stance against crypto-related activities. While China has clarified that criminal acts like NFT theft can be prosecuted, civil protection for crypto investments remains absent. The long-standing crypto ban, enforced since 2021, continues to shape the digital asset landscape within China.
Read Also: Stealing NFTs and Digital Collections Becomes A Crime In China
Philippines Set to Issue Tokenized Bonds: A Step Towards Web3 Finance?
In a contrasting move towards embracing digital innovation, the Philippines’ Bureau of Treasury (BTr) is venturing into the realm of tokenized finance. They aim to raise $180 million from their domestic capital market by issuing tokenized bonds.
Announced on November 16th, these tokenized bonds (TTBs) are one-year fixed-rate government securities offering semi-annual coupon payments to institutional investors. Starting next week, these bonds will be issued as digital tokens, managed within the BTr’s distributed ledger technology (DLT) registry.
Read Also: The Philippines Plans To Tokenize Treasury Bonds, Is This An Innovative Financial Venture?
The BTr stated that this maiden issuance of TTBs is a “proof-of-concept for the wider use of DLT in the government bond market,” aligning with the National Government’s Government Securities Digitalization Roadmap. This initiative highlights the Philippines’ proactive approach to leveraging blockchain technology in finance.
Further solidifying its commitment to Web3, the Blockchain Council of the Philippines partnered with the Department of Information and Communications Technology (DICT) in July to promote Web3 adoption. These collaborations aim to educate and engage local stakeholders, including government bodies, Web3 developers, and civil societies, fostering a thriving blockchain ecosystem in the Philippines.
The Week in Crypto: A World of Contrasts
This week’s crypto news paints a picture of a diverse global landscape. Hong Kong is solidifying its position as a regulated crypto hub with exchanges like Hashkey prioritizing security and investor protection through innovative insurance solutions. Meanwhile, China remains steadfast in its crypto ban, with courts reinforcing the legal limitations for crypto activities.
On a brighter note, the Philippines is emerging as a regional innovator, exploring the potential of tokenized bonds and actively fostering Web3 adoption. These developments underscore the varied approaches governments are taking towards digital assets, highlighting both the challenges and opportunities within the evolving crypto space. As the industry matures, regulatory clarity and innovative solutions like tokenized bonds will likely play an increasingly crucial role in shaping its future.
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