Yuan stablecoin team detained, new Bitcoin prices on WeChat, and HK crypto regulations

Alleged arrests of the Yuan stablecoin crew

On May 31 a news source PANewsLab stated that the offshore stablecoin issuer CNHC’s developers had either lost touch or had been detained by law enforcement. At CNHC’s Shanghai division, a picture of what looks to be an empty office block bears the following message:

“Law enforcement has seized the property of the building; vandalism is forbidden.”

In March, KuCoin Ventures, Circle, and IDG Capital led the $10 million Series A fundraising effort for CNHC. When the funds were first announced, the team said that they would be used for “expansion in the Asia Pacific Region” and that they were in the process of relocating their head office from the Cayman Islands to Hong Kong.

The alleged action looks to be a part of a more extensive campaign by Chinese officials against cryptocurrencies. On May 24, Asia Express reported that the Singaporean inter-blockchain communications technology Multichain’s tokens had fallen 30% as a result of a postponed backend upgrade and rumors that Chinese police had detained its primary engineers.

Multichain claims to be up and running, but on June 1, it said that it is still “unable to contact CEO Zhaojun and obtain the necessary server access for maintenance,” and as a result, the protocol will need to stop a number of affected cross-chain services.

Hong Kong introduces retail cryptocurrency licensing

The implementation of Bitcoin exchange regulations in Hong Kong has gone according to plan, despite restrictions and censorship in the Chinese mainland. The Hong Kong Virtual Asset Consortium was established on May 31 to adopt the top 30 cryptocurrencies by market size for listing and to perform quarterly audits of registered digital asset exchanges to check for adherence to licensing requirements that became effective on June 1.

On a different front, a study report from multichain wallet service BitKeep claims that well-known cryptocurrency projects like Avalanche, Conflux, EOS, and Fantom have all joined Hong Kong’s Web3Hub ecosystem fund, which was revealed in April. The fund, which has a $10 million budget, is intended to encourage Web3 initiatives to establish branches or main offices in the Chinese special administrative zone. The Financial Secretary of the Hong Kong SAR and manager of the fund is Paul Chan Mo-Po.

In spite of the increased popularity, BitKeep researchers emphasized that HK restrictions are still severe at the moment:

“The new regulations very clearly set limits on the kinds of tokens that can be traded and the kinds of services that exchanges can offer. Cryptocurrencies are subject to stringent laws set forth by the Securities and Futures Commission (SFC), which emphasize that only non-security tokens may be traded, that the token must have been in existence for at least a year, and that it must have been listed on two cryptocurrency indices.”

Exchanges are also not allowed to conduct derivative transactions, such as perpetual cryptocurrency contracts, nor are they allowed to offer loan or deposit services or wealth management products. “However, the regulator recognises the importance of derivatives trading in the encrypted market and will conduct additional research and consideration,” stated researchers.

WeChat enables BTC price quotes

WeChat, the biggest social media platform in China with over a billion users, has indexed Bitcoin price quotes in the search queries as of June 1. Given that China has essentially outlawed all cryptocurrency-related activity since 2021, including exchanges, mining, and the on-ramping of fiat currency to crypto, the action is important.

However, if history is any indication, the WeChat BTC search query will only stick around for a short time. Similar things were previously permitted by platforms with billions of users, like China Central Television and the Chinese TikTok version of Douyin, but the government quickly took them down.

All Nippon Airways introduces the NFT marketplace

The largest airline in Japan, All Nippon Airways (ANA), which had revenue of almost $12.2 billion in the previous fiscal year, debuted “ANA GranWhale,” an NFT marketplace with an aviation theme, on May 30. Writers of code said:

“As a technique for representing ownership of digital products, NFTs have primarily been applied in industries like art and music. The ANA Group will utilize NFT in the aviation sector this time.”

Aerial photographer Luke Ozawa’s first-ever digital image in his NFT career will be displayed at ANA GranWhale as its initial step, with an asking price of 100,000 yen ($719). A 3-D model NFT conversion of the first unique paint Boeing 787 airplane launched by ANA will be shown in the second installment, which will begin on June 7. 

As part of ANA’s plan to construct a Web3 virtual travel platform, the NFT marketplace’s development got underway last August.

“Through the ‘GranWhale NFT marketplace’, we hope to increase the value of customers’ experiences both locally and abroad as we commercialize NFTs as specialized products from diverse regions of Japan.”

Fed motivates Astar Network to restructure tokenomics

The founder of the Japanese blockchain Astar (ASTR) Network, Sota Watanabe, declared his wish to update the tokenomics of the protocol on May 28. He claimed that even the US government was aiming for an inflation rate of 2%, down from the present rate of 8.4%, and that this prompted him to think that the protocol needed an update.

Watanabe suggested mimicking the Federal Reserve’s decision-making processes every quarter or every six months and adjusting the blockchain’s token inflation rate based on a number of variables, further drawing inspiration from the Federal Reserve in his article:

“Decentralizing one of the FED’s functions can be difficult, but it can also be an intriguing experiment.”

According to the cryptocurrency executive, he desired to either fix the total quantity of ASTR and reduce the inflation rate over time, similar to how Bitcoin does, or automatically determine the inflation rate based on network activity, similar to Ethereum, or combine both approaches.

Astar, a multichain decentralized application proposal, just released the second iteration of its smart contracts, facilitating the creation of new cross-chain apps using both the WASM and EVM virtual machines on its mainnet.

The Travel Rule and BitFlyer

According to a recent notice, the Japanese cryptocurrency exchange bitFlyer will begin observing the new Travel Rule of the nation’s Financial Services Agency on June 1. According to the Travel Rule, a crypto asset exchange operator who is delivering crypto assets at a user’s request must give precise information to the exchange operator who is receiving the transfer on both the sender and the recipient.

Furthermore, additional limitations are placed on crypto transfers to any of the 21 nations, including Japan, Switzerland, Canada, the Bahamas, Hong Kong, and the United States, using the Coinbase-led Travel Rule Universal Solution Technology (TRUST).

Customers of BitFlyer are only able to transmit Bitcoin, Ethereum, and a limited number of ERC-20 tokens to any of the 21 TRUST nations. Transfers to addresses associated with any of the other non-TRUST countries are exempt from these regulations. As reported by bitFlyer:

“The goal of the trip rule is to both prevent unauthorized use of the systems and trace use by terrorists and other criminals.” 

Also, the PBOC’s potential intervention to stem the volatility of yuan could accelerate gains in the dollar index and add to crypto market’s woes (Bitcoin as well is in the game), according to the market observers.