China’s Baby Boomers Join Crypto Miner Cult, WazirX Fallout Deepens: Asia Express

We round up the weekly news from across Asia, highlighting the most important industry trends.

Chinese Senior Citizen Clicker Game Cult Is A Home Wrecker.

Chinese online communities are complaining that parents are being caught up in cryptocurrency “mining” groups that resemble religious groups scamming the country’s elderly, local financial media outlet Blue Whale Finance (蓝鲸财经) reported.

The so-called mining apps associated with the scheme are simple even for the tech-illiterate: participants must quickly tap their phone screens and complete routine tasks such as watching videos and ads to collect points.

The concept is similar to viral Telegram-based clicker games like Notcoin and Hamster Kombat, but these games reward users with airdrops, or at least promise to do so.

This is not the case with China’s elderly eavesdropping cults. Scammers often ask victims to pay a fee and invite their friends to join the group. Some apps even require users to go through KYC verification to collect their documents.

A source told local news agencies that the grandmother initially invested some of her retirement savings into the scheme after earning 20,000 yuan (about $2,800), but has not withdrawn anything since.

The outlet quoted a former member of the group as saying that participants are brainwashed and face hostility or ostracism from their communities if they express negative opinions.

This behavior also manifests in the home, and arguments often arise when children are warned about these groups.

“My aunts were exactly like what was written in this article,” one reader commented.

“They insisted the scam was real. They still believed it even when the scammer asked her to pay a 10% processing fee.”

For WazirX, the situation is even worse.

The freezing of cryptocurrency exchange WazirX’s assets has come under discussion after a legal petition was filed with the National Company Law Tribunal (NCLT), the tribunal that oversees corporate disputes in India.

The petition, filed on August 3, asks the NCLT to investigate WazirX for any mismanagement or fraud following the $235 million hack that occurred on July 18.

The petitioner’s lawyer, Varun Rawal, told the magazine that the petitioner wants the investigation to shed light on how the suspicious transactions took place in the WazirX wallet and why the trading window was open until July 21.

WazirX announced on August 8 that it would cancel all transactions made on its platform after withdrawals were frozen on July 18 following the hack.

According to the National Companies Act, any person who has reasonable grounds to suspect fraud or wrongdoing can request the NCLT to investigate.

Depending on how the court’s investigation proceeds, the petition could ultimately result in the freezing of company assets. Executives could also be subject to fines and imprisonment.

North Korea’s state-sponsored hacking group Lazarus is accused of carrying out cyberattacks on Indian exchanges.

WazirX faced a huge backlash last week for suggesting a “socialized loss” strategy aimed at spreading the damage among its customers. The exchange has since said it is considering all options to counter the hack.

Japan, Rate Hike Fears Calm, Markets Rebound as Metaplanet Stagnation

Global stocks and crypto markets rebounded after Bank of Japan (BOJ) Deputy Governor Shinichi Uchida reaffirmed that the central bank will not raise borrowing rates amid market turmoil. This comes after the BOJ raised interest rates for the second time in 17 years, causing market turmoil and sending bitcoin crashing below $50,000 for the first time since February.

Before Uchida’s statement, the central bank initially hinted at further rate hikes, which caused the Japanese yen to appreciate against the dollar. This increased the cost of yen-denominated loans, a phenomenon known as the yen carry trade.

In these transactions, investors typically borrow low-interest yen and convert it into a high-yielding currency like the US dollar, which they can then reinvest for better returns. It is believed that major crypto companies heavily involved in yen carry trading are now facing margin calls on their yen loans.

Industry experts speculate that Chicago-based Jump Trading and the industry’s leading market maker, the cryptocurrency sector, is facing significant losses. The company has liquidated most of its risky assets into stablecoins and there are rumors that it is shutting down its cryptocurrency business. However, there is no hard evidence to support this assessment.

Conversely, some companies are taking advantage of the market downturn. Tokyo-based Metaplanet (often likened to the “MicroStrategy of Asia”) announced a new shareholder loan of 1 billion yen ($6.8 million) to acquire more bitcoins. The company held 246 bitcoins on July 22.

Meanwhile, in Japan, the regulatory environment for opening up cryptocurrencies to institutional funds remains lukewarm.

Hideki Ito, commissioner of the Financial Services Agency, said the agency is taking a cautious approach to approving cryptocurrency exchange-traded funds (ETFs), following Singapore’s approach and in contrast to Hong Kong’s more aggressive stance on expanding crypto ETFs.

Kwon Do’s Korea India faces another challenge

According to Montenegrin news outlet Bizeti, the Montenegrin Supreme Court has postponed the extradition of Kwon Do-hyung (aka Do-kwon) to South Korea.

Kwon’s extradition now must await the Supreme Court’s ruling on the protection of legality, a process that reviews whether judicial decisions are legal and made in accordance with the law.

The decision came despite an earlier court statement saying there would be no motion to challenge the appellate court’s ruling that upheld a high court ruling ordering Kwon to be extradited to South Korea rather than the United States.

On August 2, the Supreme Court of Montenegro appealed the Court of Appeal’s decision to extradite former Terraform Labs CEO Kwon Do-hyung (real name Do-kwon) to South Korea.

The South Korean has been in custody since March 2023 when he attempted to fly from Montenegro to Dubai using a forged passport.

In April 2024, a U.S. court ruled that Terraform Labs and Kwon were responsible for a fraudulent scheme that erased $40 billion from the Terra blockchain ecosystem. Terraform Labs agreed to a $4.47 billion settlement in June.

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Yoon Yohan

Yohan Yoon is a multimedia journalist covering blockchain since 2017. He has contributed as an editor to Forkast, a cryptocurrency media outlet, and has covered Asian technology stories as an assistant reporter for Bloomberg BNA and Forbes. In his free time, he enjoys cooking and experimenting with new recipes.