Hong Kong welcomes crypto exchanges with a red carpet

While some jurisdictions (cough: America) have adopted a regulation-by-enforcement approach toward crypto, others are doing the opposite. A Financial Times report on June 15 stated that the Hong Kong Monetary Authority was pressuring major financial organizations to accept crypto customers. It’s not only regulators who are laying out a red carpet for the Web3 industry in Hong Kong. Johnny Ng Kit Chong, a Legislative Council of Hong Kong member, , wrote in June:

There have been many news stories about international virtual assets exchanges over the last two days. I invite global virtual asset exchanges including @coinbase to come to Hong Kong to apply for a compliant trading platform and to negotiate a listing. I am willing and able to help!”

In a interview, Joseph Chan Ho Lim revealed that Hong Kong Monetary Authority had conducted public consultations regarding the launch of stablecoins, and was in the process to establish a regulatory frame work by the end the year. The politician stated that Hong Kong would continue to support industry development in the future, and welcomed the industry to come and the talents to be found there.

The Hong Kong Web3 Festival gallery hall (Twitter)

Hong Kong Securities Regulatory Commission published regulations on June 1 stating the requirements for cryptocurrency trading platforms to apply for a Hong Kong license. Securities Regulatory Commission must receive a license request from regulated trading platforms within nine months or by February 29, 2024. Otherwise, they must terminate their Hong Kong business before May 31 2024.

Bank of China issues debt notes on Ethereum

BOCI, a subsidiary of Bank of China that specializes in investment banking, announced on June 12 the tokenization of digitally structured notes worth 200 million Chinese Yuan ($28,000,000) via the Ethereum blockchain. This is the first time a Chinese financial institute has tokenized a Hong Kong security. As a result of their origin by Swiss investment bank UBS, the notes are subject to both Hong Kong law and Swiss law. Ying Wang is the BOCI deputy CEO.

We are working with UBS to simplify digital asset markets and digital structured products for our customers in Asia Pacific. We are encouraged by Hong Kong’s evolving digital economy, and we are committed to promoting digital transformation.

UBS issued a tokenized $50 million fixed-rate note back in December 2022. On Feb. 16, the Hong Kong government issued a tokenized green bond worth $100 million, valued at 800 million Hong Kong dollars. The bond was underwritten by four major banks and had a yield per year of 4.05%.

Do Kwon in and out of prison

On June 15, the High Court of Montenegro, Podgorica , ordered Terraform Labs’ CEO Do Kwon as well as chief financial officer Han Chang Joon to be sent back to prison pending extradition to South Korea on charges relating their role in a $40 billion collapse of Terra Luna ecosystem.

Kwon Joon were freed on bail of 400,000 Euros each earlier this month in their ongoing passport case, after the Montenegrin Basic Court rejected an appeal from prosecutors.

The brief time they were out on bail wasn’t a happy one either. During the brief period of time they were out on bail, South Korean prosecutors said that they would freeze Kwon’s and his associates’ accounts in Swiss banks. On June 16, a new hearing is scheduled at the Basic Court on charges of falsifying documentation.

Do Kwon faces a long stretch in jail in a number of countries.

Local sources claim that Kwon Joon will remain in custody for six months while the court makes a decision on their extradition. Kwon, Joon, and 11 other charges related to fraud, trust breach, and embezzlement could also lead to their extradition to the U.S.

There is also another legal action against Kwon. Kwon, who is currently in detention, will be interviewed by the Special State Prosecutor’s Office on June 16 for a letter that he sent to government officials revealing his connection with Milojko spajic, the leader of Europe Now Movement.

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Kwon, Spajic and the National Security Council of Korea claim that they have been friends since 2005 and met last in Belgrade, December 2022. Investigators say there’s evidence that Kwon funded the PES campaign using his laptop. Kwon could face additional jail time in Montenegro, as well as up to 40-years in a South Korean jail. He may also be facing more time behind bars in the U.S.

Korean blockchain firm’s daisy chain contagion

The South Korean yield platform Haru Invest has filed a criminal complaint against B&S Holdings for “false information in management reports provided fraudulently.”

Haru had stopped withdrawals and deposits the day before. “We discovered through our inspection process that certain data provided by an operator of consignment was suspected to have been false.” Investors who were concerned took photos of allegedly empty offices and accused Haru of orchestrating “a rug pull.” Haru claims this is incorrect.

Haru Invest’s corporate offices allegedly empty after announcement. (Telegram)

Delio is a South Korean Bitcoin lending company that was immediately affected by the move. quickly announced a temporary suspension of withdrawals for customers “in order safely to protect the assets of current clients in custody,” citing Haru Invest. Delio, one of South Korea’s largest cryptocurrency lending firms, announced a temporary suspension of customer withdrawals “to safely protect the assets of customers currently in custody,” citing issues at Haru Invest.

Jun Du, co-founder and CEO of Huobi Global cryptocurrency exchange, wrote a curious comment on the subject.

The thunder of [crypto] loan platforms has essentially ended with the detonation by Delio.

Du has warned, however, that the contagion associated with centralized trading platforms is only just beginning. Not only are the newcomers confused, but so are the OGs of the industry. The former blockchain executive asked when the thundering of black boxes of centralized crypto entities would end. He also expressed his doubts about whether the industry would experience a “slump”, or “be ushered into a bull market” once such issues were resolved.

The latter claims that the exchange is now profitable after a period of reorganization, which included a href=”https://cointelegraph.com/magazine/huobi-employees-revolt-gamefi’s lives antminer on steroids asiaexpress/” rel=”nofollow noopener” target=”_blank”>crushing an employee revolt/a>. After a period reorganization that included crushing a employee revolt, Justin Sun claims the exchange is now profiting.

Zhiyuan sun

Zhiyuan Sun is a Cointelegraph journalist who focuses on technology news. He has worked for several major financial media outlets, including The Motley Fool and Seeking Alpha.