Bitcoin glory on Chinese TikTok, 30M mainland users, Justin Sun saga: Asia Express
Our weekly roundup of news from East Asia curates the industry’s most important developments.
Bitcoin’s day of glory on Chinese TikTok
On Apr. 10, Douyin, the version of Tiktok exclusive to Chinese users, began publishing price quotes related to Bitcoin (BTC) and other cryptocurrencies such as Ethereum (ETH), Dogecoin (DOGE), and Ripple (XRP). The move sparked rampant speculation among the Chinese media and users alike related to a potential change of policy by the country’s central government on cryptocurrency regulation.
Unlike its Western counterpart, content on Douyin is heavily monitored and sometimes censored by Chinese authorities. Since Sept. 2022, Douyin has been cracking down on content relating to cryptocurrencies, NFTs, and Metaverse.
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Hence, many individuals were genuinely surprised to see cryptocurrencies discoverable on the government-curated platform. For around 24-hours, any of Douyin’s estimated 730 million mainland Chinese users could freely view crypto price quotes on the app. However, dreams of a relaxation in the country’s strict crypto laws were crushed shortly thereafter. On Apr. 11, Bitcoin and cryptocurrencies price quotes were removed from Douyin, with a message stating:
“Based on relevant national regulations, unofficial digital currencies do not possess the same legal standing as fiat currencies. Please invest cautiously.”
Since 2021, China has banned all forms of crypto exchanges, crypto-fiat transactions brokered by financial institutions, and initial coin offerings. That said, the country stopped short of banning the ownership of cryptocurrencies altogether and the Chinese controlled territory of Hong Kong has unveiled plans to become a crypto hub.
Bruce Lee lives again via NFTs
On Apr. 12, the Bruce Lee Foundation announced it would partner with NFT video platform Shibuya to launch a collection of genesis NFTs featuring the late legendary martial arts actor, who died in 1973 at the age of 32 under mysterious circumstances. The House of Lee collection is one sale on Manifold from Apr. 12 to Apr. 14 and is minted on the Ethereum network, with digital image storage on Arweave.
There is no limit to the number of NFTs minted during the sale. At the time of publication, over 19,592 House of Lee digital collectibles have been minted with a current floor price of around 0.008 Ether. The Bruce Lee NFT was drawn by artists Maciej Kuciara and Emily Yang, with its design inspired by Shannon Lee, daughter of Bruce Lee and president of the Bruce Lee Estate. An Ethereum Name Service address has also been registered for the collection at bruceleeofficial.eth.
China’s 30M crypto users despite ban
According to a joint research report published on Apr. 10 by Foresight News, CoinNess, and BlockTempo, China still has around 30 million crypto users, representing around 2.12% of its population, compared to 12% for the U.S. and 11% for Taiwan. Researchers cited the Sept. 2021 People’s Bank of China ban on crypto-fiat transactions as “the nail in the coffin” for the industry in China.
That said, the report also noted Hong Kong is becoming a rising hub of blockchain technology in Asia. In Feb. 2023, the Hong Kong Securities and Futures Commission (SFC) proposed a pathway for exchanges to obtain regulatory licenses through fulfilling the custody, know-your-customer, record-keeping, and risk management requirements. The policy is scheduled to come into effect on June 1, 2023.
Interestingly, Foresight wrote that despite tailwinds from a spending campaign during the 2022 Beijing Winter Olympics, only 13.61 billion of China’s digital yuan central bank digital currency (CBDC) were in circulation, representing just 0.13% of China’s M0 or outstanding monetary supply. “Trade settlement applications are still in development and are only accepted by very limited partners,” the firm noted.
Despite headwinds, three major venture capital firms, Hashkey Capital, Dragonfly, and Foresight Ventures, are still active in the mainland China region. Notable projects tracing their origins from China include Conflux, Alchemy Pay, Animoca Brands, and CertiK.
Hong Kong’s rising Web3 power
On Apr. 12, more than 10,000 crypto enthusiasts and 300 guest speakers gathered in Hong Kong for the special administrative region’s annual Web3 Festival. During its debut, Lee Ka-Chiu, chief executive of Hong Kong, pledged to allocate 700 million Hong Kong dollars ($89.17 million) from this year’s budget to accelerate the development of digital assets and Web3 technologies in the region. Chan Mo-Po, the financial secretary of Hong Kong, also commented:
“Web3 is in its infancy, and the current common applications include cryptocurrency, decentralized exchanges, digital identity verification, DeFi, blockchain games, and even NFT but it is conceivable that in the future there will be many more new applications and opportunities. From a historical point of view, the development of Web3 will grow rapidly again after going through the shock stage.”
Justin Sun’s dream rendezvous with socialite overshadowed by legal woes
For Justin Sun, founder of Tron and de facto owner of cryptocurrency exchange Huobi Global, the 2023 Hong Kong Web3 Festival appears to be the pinnacle of his blockchain career. First off, before his arrival, Sun claims to have successfully turned around Huobi’s operations after years of stagnation, posting an impressive profit of $30 million in Q1 2023.
Then, with an aura of awe, the blockchain personality dispelled rumors that he was arrested in Hong Kong on arrival. In 2019, Sun allegedly hired a smuggler to help him bypass mainland China’s border controls and escape the country. This has been linked to exit restrictions due to his involvement in the initial coin offering (ICO) of Tron, which took place days before China banned ICOs. Sun has been out of mainland China ever since. Interestingly, no extradition agreement exists between China and Hong Kong, after a bill for such measure was quashed by a pro-democracy student uprising in 2019. The protests, in turn, were quashed by China’s central government.
Thanks to the sacrifice of the students, Sun was able to land in Hong Kong safely and meet face-to-face with Nina, an iPollo community ambassador whom Sun wants to feature in a Huobi beauty pageant and “[personally] guarantee as a final contestant in the Top 20.” Unfortunately, not everyone appears to be dazzled by Sun’s attempt at flirtation. As Sun’s euphoria reached its peak whilst partying onboard a Binance yacht, the U.S. Securities and Exchange Commission issued a subpoena for Sun on Apr. 12, kindly reminding him of his obligation to appear in court on charges of fraud and securities law violations.
“If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer or motion with the court.”
The SEC complaint, filed on Mar. 26, alleges Sun and his companies, Tron and BitTorrent, “fraudulently” manipulated the secondary market for Tron tokens through “extensive wash trading,” conducting more than 600,000 such trades, and also paid numerous American celebrities to promote TRX and BitTorrent (BTT) tokens with zero disclosure.
Sun has since stated that the SEC complaint “lacks merit” and that the regulatory body is “still in its infancy and is in need of further development” with regards to digital assets. The lawsuit is ongoing. Around the same day of the subpoena, Binance.US announced that it would be delisting TRX from its platform.