Mt Gox hasn’t ditched Bitcoin yet, but Hong Kong has launched a cryptocurrency exchange: Asia Express

Our weekly news roundup from East Asia selects the most important developments in the industry.

Mt. Gox Will Not Sell Bitcoin Immediately

Mark Karpeles, the former CEO of defunct Japanese cryptocurrency exchange Mt. Gox, said that for now the company will not dump its Bitcoin stake to repay creditors. He said, “As far as I know, everything is fine at Mount Gox. Trustees are moving coins to other wallets to prepare for distributions that are likely to occur this year. A Bitcoin sale is not imminent,” Karpeles wrote.

Neil Roarty, an analyst at investment platform Stocklytics, said in a statement to Cointelegraph that Mt. Gox said a potential flash sale could shake up the current supply and demand dynamics.

“The scale of the previously dormant 100,000+ Bitcoins that Mt.Gox’s custodians can immediately release to the market could be shaken.”

“There are fewer than 20 million Bitcoins in existence today, but about a third of them have not been traded in more than five years. More parts are believed to be lost forever. It could be anywhere from 2 to 6 million bitcoins. “Suddenly 100,000 seems like more than a drop in the ocean,” he added.

Mt. Gox was the world’s largest Bitcoin exchange when it filed for bankruptcy in 2014 after discovering that 850,000 of its customers’ Bitcoin (BTC) had been stolen after years of subtle siphoning. The exchange has since withdrawn approximately 200,000 BTC.

The funds were held in trust for creditors and 162,106 BTC ($11.38 billion) were held in multiple wallet addresses tracked by Token Unlock. Creditors are scheduled to be repaid at the end of this year after a 10-year bankruptcy process.

Hong Kong regulators expel all unlicensed exchanges by June 1

Hong Kong’s Securities and Futures Commission (SFC) plans to require all unlicensed virtual asset trading platforms (VATPs) to be kicked out of Hong Kong starting next month.

“All VATPs operating in Hong Kong must be licensed by the SFC or be VATP applicants “deemed licensed” under AMLO.”

“Operating a VATP in Hong Kong in contravention of the Anti-Money Laundering and Countering the Financing of Terrorism Ordinance (AMLO) is a criminal offense and the SFC will take all appropriate action against violations of the law,” it states.

During the one-year registration grace period, more than 22 cryptocurrency exchanges, including Gate.io and OKX, applied for licenses to maintain a presence in the region. However, many of these exchanges ultimately decided to withdraw applications just before the deadline.

Despite the VATP licensing regime being active since last June, the only cryptocurrency exchanges approved by Hong Kong regulators are Hashkey and OSL Group. Among numerous requirements, exchange applicants must submit audited financial reports, use a verified custodian for user deposits, and be insured. Some exchanges have closed in the past due to regulatory pressure.

Hong Kong is a “big contributor” to China’s digital economy

Despite China’s ongoing ban on Bitcoin, Professor Chen Chun of the State-run Chinese Academy of Engineering’s School of Computer Science and Technology praised Hong Kong as a “sandbox” for Web3 development and the development of mainland China’s digital economy.

“Hong Kong should leverage the technological characteristics of Web 3.0 and clarify spatial boundaries to increase clarity and advance productivity improvement and risk prevention,” Chen said. effort:

“Based on the immutability of blockchain, we can expand non-platform participant rights, including preventing multiple uses of data, allowing the data itself to generate higher value, and building a fair, equitable, and trustworthy information network. .”

Chun also raised the importance of creating a digital currency that can cope with the complexity of the Web3 network, recommending that Hong Kong regulators should target an initial money supply of $260 million to $260 million for the central bank digital currency.

Last February, Hong Kong allocated $383 million to the Cyberport initiative, which aims to attract Web3, blockchain and AI companies to the East Asian city. Hong Kong’s Finance Minister Paul Chan also announced that Hong Kong’s AI supercomputing center will begin operations this year. By early 2026, it is expected to have 3,000 petaflops of computing power, capable of processing nearly 10 billion images per hour.

Huobi co-founder’s investment company recovers 108% of deposits following FTX collapse

Sinohope, a Hong Kong cryptocurrency investment firm founded by Leon Li, co-founder of cryptocurrency exchange Huobi Global (now HTX), has recovered more than 100% of deposits locked up in bankrupt cryptocurrency exchange FTX. .

Sinohope, through its subsidiary Hbit Limited, sold $18 million worth of FTX digital asset claims to Delaware-based debt investment firm Ceratosaurus Investors LLC for $19.5 million, recouping 108% of the initial deposit.

Currently, FTX charges are trading between $1.29 and $1.43 per dollar, largely due to the significant increase in digital asset prices since November 2022, when FTX declared bankruptcy.

This move is, by all accounts, a happy ending to Sinohope’s woes. As a result of the FTX infection, Leon Li had to personally extend a $14 million personal credit line to provide relief to affected customers. On December 13, 2023, the company said it expected a loss of HK$280 million ($35.86 million) in the first nine months of the year, including HK$86 million ($11 million) in fixed corporate deposits.

Binance is known to have sold Gopax creditor claims at a greatly discounted price.

Binance, a cryptocurrency exchange that purchased most of the shares of Gopax, one of the top five cryptocurrency exchanges in Korea based on market share last year, is seeking compensation for Gopax users against Genesis Global, a cryptocurrency investment company that went bankrupt in August 2023. It is reported that the asset claims were sold for less than half of their fair value.

According to a report in the Korea Economic Daily, Gopax initially owed 70 billion won to users who staked cryptocurrency assets on GoFi, the exchange’s staking service, with Genesis acting as a custodian. However, after paying 35 billion won to users through the sale of creditor claims, the remaining balance of 35 billion won increased to more than 100 billion won due to the increase in the value of cryptocurrency assets after Genesis. Bankruptcy was declared in 2022.

Last March, the Korea Times reported that Gopax is currently in a state of ‘complete capital erosion’ due to increased debt. Earlier this month, Genesis secured $3 billion approval from a U.S. Bankruptcy Court to return cash and cryptocurrency to its remaining creditors.

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Jyuyuan Line

Zhiyuan Sun is a journalist at Cointelegraph specializing in technology news. He has years of experience writing for major financial outlets such as The Motley Fool, Nasdaq.com, and Seeking Alpha.