Our weekly roundup of East Asia news curates the key industry developments.
Bitcoin’s Day of Glory on Chinese TikTok
On April 10, Douyin, the version of Tiktok exclusive to Chinese users, began posting price quotes related to Bitcoin (BTC) and other cryptocurrencies such as Ethereum (ETH), Dogecoin (DOGE), and Ripple (XRP). The move sparked wild speculation among Chinese media and users alike over a possible change in the country’s central government’s policy on cryptocurrency regulation.
Unlike its Western counterpart, content on Douyin is heavily monitored and sometimes censored by the Chinese authorities. Since September 2022, Douyin has been cracking down on content related to cryptocurrencies, NFTs and Metaverse.
Therefore, many people were really surprised to see cryptocurrencies discoverable on the government-curated platform. For about 24 hours, each of Douyin’s estimated 730 million mainland Chinese users could freely view crypto price quotes on the app. However, dreams of relaxing the country’s strict crypto laws were dashed shortly thereafter. On April 11, price listings for bitcoin and cryptocurrencies were removed from Douyin, with a message stating:
“Based on relevant national regulations, unofficial digital currencies do not have the same legal status as fiat currencies. Please invest carefully.”
Since 2021, China has banned all forms of crypto exchanges, crypto-fiat transactions brokered by financial institutions, and initial coin offerings. However, the country has stopped completely banning cryptocurrency ownership and the Chinese-controlled territory of Hong Kong has revealed plans to become a crypto hub.
Bitcoin on Douyin before and after the crackdown. (GamerSky)
Bruce Lee lives again through NFTs
On April 12, the Bruce Lee Foundation announced that it will be collaborating with NFT video platform Shibuya to launch a collection of Genesis NFTs featuring the late legendary martial arts actor, who died under mysterious circumstances in 1973 at the age of 32. The House of Lee collection is for sale on Manifold from April 12-14 and is minted on the Ethereum network with digital image storage on Arweave.
The Bruce Lee Genesis NFT (Arweave)
The number of NFTs minted during the sale is unlimited. At the time of publication, over 19,592 House of Lee digital collectibles have been minted with a current reserve price of approximately 0.008 Ether. The Bruce Lee NFT was drawn by artists Maciej Kuciara and Emily Yang, with its design inspired by Shannon Lee, Bruce Lee’s daughter and President of the Bruce Lee Estate. An Ethereum Name Service address has also been registered for the collection at bruceleeofficial.eth.
China’s 30 million crypto users despite ban
According to a joint research report published April 10 by Foresight News, CoinNess, and BlockTempo, China still has around 30 million crypto users, which is about 2.12% of its population, compared to 12% in the US and 11 % in Taiwan. Researchers called the People’s Bank of China’s September 2021 ban on crypto-fiat transactions “the nail in the coffin” for the industry in China.
China’s crypto user base has declined but is still thriving (Foresight Ventures)
However, the report also noted that Hong Kong is emerging as a burgeoning blockchain technology hub in Asia. In February 2023, the Hong Kong Securities and Futures Commission (SFC) proposed a way for exchanges to obtain regulatory licenses by complying with custody, know-your-customer, record-keeping and risk management requirements. The policy is scheduled to come into force on June 1, 2023.
Interestingly, Foresight wrote that despite tailwinds from a spending campaign during the Beijing 2022 Winter Olympics, only 13.61 billion of China’s yuan central bank digital currency (CBDC) was in circulation, accounting for just 0.13% of China’s M0, or outstanding money supply . “Trade settlement requests are still evolving and are only being accepted by very limited partners,” the firm noted.
Despite the headwinds, three major venture capital firms, Hashkey Capital, Dragonfly and Foresight Ventures, are still active in the Mainland China region. Notable projects originating in China include Conflux, Alchemy Pay, Animoca Brands and CertiK.
Hong Kong’s growing Web3 power
The Hong Kong Web 3.0 Festival Gallery Hall (Twitter)
On April 12, more than 10,000 crypto enthusiasts and 300 guest speakers gathered in Hong Kong for the SAR’s annual Web3 Festival. During his debut, Hong Kong Chief Executive Lee Ka-Chiu pledged to allocate HK$700 million (US$89.17 million) from this year’s budget to accelerate the development of digital assets and Web3 technologies in the region. Hong Kong Finance Minister Chan Mo-Po also commented:
“Web3 is still in its infancy and current popular applications include cryptocurrency, decentralized exchanges, digital identity verification, DeFi, blockchain gaming and even NFT, but it is conceivable that there will be many more new applications and opportunities in the future. Historically, after the shock phase, the development of Web3 will accelerate again.”
Justin Sun’s dream celebrity date marred by legal troubles
For Justin Sun, founder of Tron and de facto owner of cryptocurrency exchange Huobi Global, Hong Kong Web3 Festival 2023 seems to be the pinnacle of his blockchain career. For starters, before its arrival, Sun claims to have successfully turned around Huobi’s operation after years of stagnation, posting an impressive $30 million profit in the first quarter of 2023.
Then, with an aura of awe, the blockchain personality dispelled rumors that he was arrested upon arrival in Hong Kong. In 2019, Sun allegedly hired a smuggler to help him bypass border controls in mainland China and flee the country. This has been linked to lockdowns due to its involvement in Tron’s Initial Coin Offering (ICO), which came days before ICOs were banned in China. Since then, Sun has left mainland China. Interestingly, no extradition deal exists between China and Hong Kong, after a bill for such a measure was overturned by a pro-democracy student uprising in 2019. The protests were in turn crushed by China’s central government.
Thanks to the students’ sacrifice, Sun was able to land safely in Hong Kong and meet in person with Nina, an ambassador for the iPollo community who wants to feature Sun in a Huobi beauty pageant, and “[personally] Guaranteed a Top 20 finalist.” Unfortunately, not everyone seems dazzled by Sun’s attempt at flirtation. As Sun’s euphoria peaked while partying aboard a Binance yacht, the U.S. Securities and Exchange Commission issued a subpoena for Sun on April 12, kindly reminding him of his obligation to appear in court for fraud and securities violations.
“If you do not respond, you will be entered into a default judgment for the relief requested in the complaint. You must also submit your response or application to the court.”
The SEC complaint, filed March 26, alleges that Sun and its companies Tron and BitTorrent “fraudulently” manipulated the secondary market for Tron tokens through “extensive laundering,” conducting more than 600,000 such trades and also paying numerous American celebrities to TRX – and promote BitTorrent (BTT) tokens without disclosure.
Sun has since said that the SEC’s digital asset complaint was “unfounded” and that the regulator “is still in its infancy and needs to evolve.” The lawsuit is ongoing. Around the same day of the subpoena, Binance.US announced that it would remove TRX from its platform.
Justin Sun blushes as he shares a stage with Nina on April 11, unaware of the looming legal threat that will materialize the day after. (twitter)
Zhiyuan sun
Zhiyuan Sun is a Cointelegraph journalist who focuses on technology-related news. He has several years of experience as a writer for major financial media outlets such as The Motley Fool, Nasdaq.com, and Seeking Alpha.
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