Our weekly roundup of news from East Asia curates the industry’s most important developments.
KuCoin airdrops $10 million after U.S. SDNY indictment
Cryptocurrency exchange KuCoin is airdropping $10 million in Bitcoin and its native token KCS to users to try to convince them to stick by the exchange after a criminal indictment by prosecutors of the U.S. Southern District of New York as well as civil charges filed by the U.S. Commodity Futures Trading Commission (CFTC).
“I would like to express my gratitude to all KuCoin users for your support, trust, and companionship during the past few days and the past seven years,” wrote Johnny Lyu, CEO of KuCoin: “We will absolutely ensure the security of user assets as always and comply with regulations to fulfill our trust.”
The announcement came a day after KuCoin users withdrew more than $1 billion after news of the charges against the exchange. Lyu stated:
“Recently, on March 26th and 27th, some users experienced longer-than-expected wait times during the withdrawal process. As ‘People’s Exchange’ we feel a deep sense of responsibility for this inconvenience and would like to sincerely apologize.”
The exchange currently has $5 billion in total assets, down from around $6.3 billion at the beginning of the week. The exchange, based primarily in Singapore and China, has been accused by the U.S. Department of Justice and the CFTC of operating as an unlicensed money transmitter in the U.S. and failing to adhere to a Know Your Customer regime to prevent money laundering.
“As a result of KuCoin’s willful failures to maintain the required AML and KYC programs, KuCoin has been used as a vehicle to launder large sums of criminal proceeds, including proceeds from darknet markets and malware, ransomware, and fraud schemes,” prosecutors claimed. Since its founding in 2017, KuCoin has allegedly received over $5 billion and sent over $4 billion of suspicious and criminal proceeds.
KuCoin’s co-founders, Chun Gan and Ke Tang, both Chinese nationals, remain at large.
“We are aware of the related reports and are currently investigating the details through our lawyers,” the exchange wrote in response to the ongoing lawsuits.
Taiwanese celebrity raises $37M from Solana memecoin presale
Jeffrey Huang, a Taiwanese musician and blockchain entrepreneur commonly known as “Machi Big Brother,” has raised $37.5 million from a presale of Solana memecoin Bobaoppa. As of March 28, it appears that investors sent over 200,000 SOL to a presale address based on just a single tweet from the Bobaoppa project, which does not have an official website at the time of publication.
“My son is taking his talents to Solana,” wrote Huang, promoting the presale. “Minimum 1 SOL — Don’t send from an exchange,” he continued. The Solana memecoin craze continues to take the crypto world by storm, with $149.2 million raised from 33 presales in the past few weeks alone. Even Anatoly Yakovenko, co-founder of Solana, has warned investors to stop participating in the ongoing meme phenomenon.
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Tencent Cloud adds support for Sui
Chinese internet conglomerate Tencent has added remote call procedure support for layer-1 Sui blockchain as of March 28. The company said that in the region “the latency data is significantly better than other RPC manufacturers.”
With the partnership, Sui developers can utilize the Tencent Cloud RPC to help create infrastructure decentralized applications within the Sui ecosystem. Launched in September, Tencent RPC is available for $10 per month and supports major blockchains such as Ethereum, BNB Chain, Polygon, Solana, and others.
Another crypto exchange approved in Hong Kong
Hong Kong crypto exchange HKbitEX has received in-principle approval from the city’s Securities and Futures Commission for facilitating crypto transactions. As announced by HKbitEX on March 28, the scope of approved activities includes Bitcoin trading, Ethereum trading, and securities tokenization.
“Pioneer Asset Management Limited (Pioneer), a sister company of HKbitEX, was licensed last year to manage up to 100% of virtual asset portfolios,” the firm wrote. “In September of the same year, it took the lead in issuing Hong Kong’s first tokenized shop real estate fund STO, becoming the first company in Hong Kong to be permitted by the Securities Regulatory Commission.”
With the new license, Taiji Capital, HKbitEX’s parent company, is authorized to provide secondary markets for securitized tokens, with five tokenization projects already launched. “In the future, users can use stablecoins to trade STO on the platform to achieve instant settlement of both silver and commodity certificates (T+0 DvP), improve transaction efficiency, and reduce settlement risks,” Dr. Gao Han, CEO of HKbitEX, added.
Upbit earned $751 million in revenue last year
The operator of South Korea’s largest crypto exchange, Upbit, reported revenues of 1.0135 trillion won ($751 million) in 2023, which is 19% less than 2022 due to a persistent cryptocurrency bear market that extended well into Q3 2023.
However, Dunamu’s net profits soared 515% to 805 billion won ($595 million) during the same period as the firm saw unrealized capital gains on its various holdings as the crypto bull market returned.
As reported by News 1 Korea on March 28, Dunamu is now required to undergo external audits, along with the publication of quarterly and half-year financial reports as per the country’s new regulations on cryptocurrency exchanges. On Jan. 9, the exchange obtained a Major Payment Institution license from the Monetary Authority of Singapore, allowing the provision of crypto-fiat services to Singaporean residents without daily and monthly transaction limits.
China reiterates zero civil law protection for crypto users
Chinese authorities emphasized once more that crypto investors have no remedies available under the country’s civil law courts in the event of scams or loss on investment.
In a March 28 warning published by the Shenzhen City Financial Management Authority against derivatives exchange DDO Digital Options, the regulator warned that DDO’s efforts to launch a native token and offer cryptocurrency derivatives violate a series of anti-crypto laws published in September 2021 that constitute the country’s “Bitcoin Ban.” In addition, the Shenzhen City Financial Management Authority wrote:
“There are legal risks involved in participating in virtual currency investment and trading activities. If any legal person, unincorporated organization or natural person invests in virtual currency and related derivatives and violates public order and good customs, the relevant civil legal actions will be invalid, and the resulting losses shall be borne by the person himself.”
“We would like to remind the general public that virtual currency lacks a clear value basis,” the Shenzhen City Financial Management Authority emphasized. Although China has banned digital assets from circulating in the country’s fiat financial system, the outright ownership of cryptocurrencies is still legal, albeit without any legal protections when causes of actions arise.
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Zhiyuan Sun
Zhiyuan Sun is a journalist at Cointelegraph focusing on technology-related news. He has several years of experience writing for major financial media outlets such as The Motley Fool, Nasdaq.com and Seeking Alpha.
