‘Hong Kong FTX’ victims win lawsuit, banker slams stablecoin: Asia Express

Victim wins first civil suit against Hong Kong FTX

A Hong Kong court ruled in favor of two investors who filed a civil suit against Dubai-based cryptocurrency exchange JPEX and its affiliate Web 3.0 Technology Support.

Following the judge’s ruling, 1.85 million Hong Kong dollars (approximately $238,000) will be recovered on behalf of the plaintiff.

“What this latest ruling shows is that victims of cryptocurrency-related cases have recourse for justice and set a precedent for all victims in a similar position who are eager to get their cryptocurrency back, but may be at a loss as to which option to take. We have no other choice but to wait for the results of the criminal investigation,” Joshua Chu, co-chairman of the Hong Kong Web3 Association and a lawyer representing the plaintiffs, told the magazine.

‘They can take action themselves and in any case police will need to obtain a court order from the victim to vest frozen assets.’

Chu said victims of cryptocurrency fraud in Hong Kong are having difficulty recovering their funds due to limited precedent and lack of specialized legal expertise.

These difficulties are further complicated by the six-year statute of limitations for civil lawsuits, which may give bad actors hope that they can just wait out the deadline.

Chu and his clients are currently seeking enforcement action to recover funds held in police custody. Local authorities froze about $29 million in connection with the case in April.

The JPEX scandal first emerged in September 2023, when Hong Kong’s Securities and Futures Commission (SFC) warned that the exchange was unlicensed.

The scandal has been likened to Hong Kong’s version of the FTX collapse due to mismanagement, lack of transparency, massive investor losses and high-profile endorsements.

It was a setback for the local industry, with withdrawals frozen and subsequent arrests occurring while the city government holds regulatory discussions to establish a regional digital asset hub in Hong Kong.

The SFC has been very cautious in issuing licenses and only three exchanges have been approved to date.

Gemini continues its APAC expansion with Singapore’s in-principle approval.

Gemini announced that it has received preliminary approval for a Principal Payment Institution (MPI) license in Singapore.

The MPI license allows companies to provide cross-border remittance and digital payment token services.

There are currently 28 “digital payment token” companies in Singapore that have been issued MPI licenses by the Monetary Authority of Singapore, Singapore’s central bank.

While the license allows for business transactions, Gemini has already set up a Singapore office as its so-called APAC hub and an India office for engineering and operations.

The APAC region is expected to continue to approve more cryptocurrency exchanges in the region, especially in Hong Kong, Singapore’s regional rival.

So far, Hong Kong has issued only three licenses, but approvals are expected to increase.

Speaking at Hong Kong FinTech Week on October 28, Hong Kong Finance Minister Paul Chan said more licenses were expected to be issued “in the coming months.”

The increase in licensed cryptocurrency service providers provides Hong Kong investors with more proven platforms to trade. This is an important lesson highlighted in the JPEX case.

Central bank gathering turns into stablecoin bash

Reserve Bank of India Governor Shaktikanta Das has criticized stablecoins for their integration with Central Bank Digital Currency (CBDC) and the Unified Payments Interface (UPI), India’s payment system that sees 500 million transactions a day.

“I actually have very strong reservations about these stablecoins and all that,” Das said at the G30 39th Annual International Banking Seminar.

Das took part in a panel discussion with Bank for International Settlements General Manager Agustín Carstens and Bank of England Governor Andrew Bailey, with the three taking turns questioning the purpose of stablecoins and arguing that they cannot be stable.

“Currency, fiat currency, must be issued by the central bank on behalf of the sovereign. Stablecoins are private currencies. “The bigger question is whether we are comfortable allowing private funds to dominate the payment system, or whether we are comfortable having a central bank currency, a fiat currency, that dominates the entire ecosystem around transactions and payments.” Das said.

Das then admitted he was “very uncomfortable” with stablecoins and private sector funds, saying he saw no benefit to them.

Last week, local media reported, citing anonymous insiders, that India was considering banning private sector currencies such as Bitcoin and Ethereum. One of the insiders said CBDCs can do everything cryptocurrencies can do while providing additional benefits.

The RBI had previously attempted to restrict cryptocurrencies in the country by banning local banks from servicing the sector, but the ban was later overturned by the Supreme Court.

Das said the central bank was in “no great hurry” to announce a nationwide rollout.

India’s digital rupee pilot began in late 2022 and has been testing various use cases such as offline payments and programmable features across 5 million users, according to the RBI.

China, the first major economy to develop CBDCs, has been testing digital currencies in some areas since April 2020.

Cryptocurrency fraudster arrested for purchasing luxury condo with stolen funds

Thai authorities have busted a group of international fraudsters who duped a local woman of 21 million baht ($620,000) to buy a luxury condo in Bangkok, according to local media.

Five suspects were arrested.

The victim was a local investor, Ms. Mallika” was attracted to a Facebook page promoting stock and cryptocurrency investments.

After coming into contact with the scammers, she communicated via LINE messenger, where she was manipulated into making incremental cryptocurrency transfers under the guise of increasing her investment portfolio.

Investigators found that the gang operates with defined roles. Cambodian national “Mr. Moon’ and Myanmar national ‘Mr. Ko” coordinated fund transfers for Burmese intermediaries who transferred the money through various accounts.

The funds eventually went to “Ms. Mountain’ and ‘Miss. Mr. Thuay, from Myanmar, used the illegal proceeds to purchase a luxury condo in Bangkok’s Rama 9 district, which is developing into a business hub in the capital Bangkok.

Authorities reportedly believe the property was scheduled to be flipped immediately.

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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. He spends his free time cooking and experimenting with new recipes.