Our weekly roundup of East Asia news features a selection of the most important developments in the industry.
SBF’s China bribery scandal worsens
according to As of October 11, Caroline Ellison, co-founder of FTX-related hedge fund Alameda Research, testified that her colleague — disgraced FTX founder Sam Bankman-Fried — allegedly paid $150 million in bribes to Chinese government officials in 2021 , higher than the $40 million disclosed. initial.
Ellison said during the FTX trial that two years ago, Chinese law enforcement froze Alameda Research’s $1 billion worth of digital assets on cryptocurrency exchanges OKX and Huobi as part of a money laundering investigation. Senior FTX executives including Chief Operating Officer Constance Wang and Alameda trader David Wa were also involved in the incident. The men first tried to contact Chinese lawyers to unfreeze the funds, but without success.
FTX and Alameda staff then allegedly used the identities of Thai prostitutes to create accounts on OKX and Huobi to negotiate the return of funds. When that didn’t work, Ellison accused Bankman-Fried of paying a $150 million bribe to unfreeze the account. The bribe was recorded as a “matter” on future Alameda balance sheets. The funds were unfrozen immediately after the bribes, according to Allison’s testimony.
Presiding Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York reminded jurors that Bankman-Fried’s alleged bribery of Chinese officials does not fall within the scope of the ongoing FTX trial. Instead, a second trial on SBF bribery charges has been scheduled for March 11, 2024. The FTX trial will continue in October.
Binance clarifies account freeze
Binance co-founder He Yi clarified on Chinese social media app WeChat earlier this week that only user accounts suspected of violating international sanctions will be frozen on the exchange.
The statement comes after a series of investigations by local news reports that the exchange froze the accounts of suspected Hamas militants at the request of Israeli law enforcement. He Yi explained:
“Hamas is a United Nations-designated terrorist organization. Therefore, any organization, including banks and trading platforms, will need to cooperate when receiving a freeze request. This is not something that Binance can decide on its own.”
The Binance executive commented: “I have no political bias, but no exchange can refuse such a law enforcement request. Palestine has an organized government. Hamas is a radical group there. They kill civilians; that is That’s the problem. Hamas is not Palestine, it’s Palestine. The freeze is against Hamas, not Palestine.”
In a follow-up post on October 11, He Yi further clarified, “Binance will not confiscate or freeze the assets of ordinary users. Rules are made by the strong; in the face of international supervision, Binance is a nobody.” She also pointed out that although The war between Russia and Ukraine continues, but the exchange is not freezing the accounts of ordinary Russians.
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Second Chinese court invalidates cryptocurrency lending
A second Chinese court has ruled that cryptocurrency lending contracts in China are not protected by law because the underlying assets are illegal.
as narrative On October 10, the Nanchang Municipal People’s Court heard that the plaintiff, Mr. Ming, lent 80,000 USDT to the defendant, Mr. Gang, in April 2021 for stable currency transactions. The loan must be repaid within six months. Mr. Gang subsequently defaulted on the loan, leading to Mr. Ming filing a civil lawsuit. The lawsuit and its appeal were dismissed.
The presiding judge wrote in his verdict:
“There are legal risks involved in participating in virtual currency investment and trading activities. If any legal person, unincorporated organization, or natural person invests in virtual currency and related derivatives that violates public order and good customs, the relevant civil legal proceedings will be invalid, and the resulting losses will be borne by them.”
The judge further explained that according to various legislation on China’s cryptocurrency ban, “virtual currencies only exist in digital form, are not legal tender, and do not have legal compensation, such as Bitcoin, Ethereum, Tether, etc., and cannot be used” as a market currency on. Virtual currency-related business activities are illegal financial activities that endanger national financial order, financial security and social and public interests, and are strictly prohibited.
The ruling does not involve the digital RMB central bank digital currency. The presiding judge said that “digital RMB is a digital form of legal tender issued by the People’s Bank of China.” It is operated by a designated operating agency and exchanged by the public. It is equivalent to banknotes and coins. “
Earlier in August, a Chinese man lost $10 million worth of Bitcoin after a borrower defaulted on his Bitcoin lending agreement, and the court ruled that the contract was invalid, citing similar reasons as the Nanchang People’s Court.
Huobi hacker returns all assets
according to Hackers have returned all 5,000 ether ($8 million) stolen in last month’s security incident, according to a statement from Justin Sun, the actual owner of cryptocurrency exchange HTX (formerly known as Huobi).
“We have confirmed that the hacker has returned all funds in full as promised, and we have also paid the hacker a white hat bonus of 250 ETH. The hacker made the right choice. We are grateful to everyone in the industry for their help.” Sun wrote. On September 25, Huobi hot wallet was stolen by hackers for the first time with 5,000 ETH. detected Provided by blockchain analytics company Cyvers Alerts.
Sun subsequently offered a bounty and threatened legal action if the funds were not returned. In the incident, the blockchain figure also claimed that the exchange held approximately $3 billion in user assets. Last month, Huobi changed its name to HTX, drawing attention from the community due to the name’s similarity to the now-defunct cryptocurrency exchange FTX.
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Zhiyuan Sun
Sun Zhiyuan is a reporter at Cointelegraph, focusing on technology-related news. He has many years of experience writing for major financial media including The Motley Fool, Nasdaq.com and Seeking Alpha.
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