Our weekly roundup of news from East Asia curates the industry’s most important developments.

Hong Kong moves bullish

On Feb. 20, the Securities and Futures Commission (SFC) of Hong Kong launched a consultation on its proposed regulatory requirements for digital asset trading platforms.
The SFC requires the licensing by June of all cryptocurrency exchanges operating in Hong Kong or soliciting services from Hong Kong investors.

In addition, the SFC said it would seek feedback on whether licensed platform operators should be allowed to provide services to retail investors and what measures should be implemented to ensure suitability and token inclusion when establishing business relationships with customers.

Currently, retail trading of cryptocurrencies is banned in Hong Kong. The announcement that the special administrative region of China was dipping its toes back into crypto immediately set off bullish reactions from everyday users and executives alike. Brian Armstrong, CEO of the cryptocurrency exchange Coinbase, wrote:

“America risks losing its status as a financial hub long term, with no clear regs on crypto, and a hostile environment from regulators. Congress should act soon to pass clear legislation. Crypto is open to everyone in the world and others are leading. The EU, the UK, and now HK.”

To be fair, he wrote that in response to a tweet suggesting retail trading would be allowed from June 1, which is not the case, but the sentiment remains. At the same time, Cameron Winklevoss, co-founder of the cryptocurrency exchange Gemini, said in a tweet:

“My working thesis atm is that the next bull run is going to start in the East. It will be a humbling reminder that crypto is a global asset class and that the West, really the US, always only ever had two options: embrace it or be left behind. It can’t be stopped. That we know.”

Shortly afterward, cryptocurrency exchanges Gate.io and Huobi Global stated that they would apply for crypto exchange licenses in Hong Kong. Both exchanges said they would comply with the relevant regulations in order to be able to offer services to Hong Kong clients. Crypto users and stakeholders alike have until March 31 to partake in the SFC consultation.

FTX Japan customers withdraw $49M

On Feb. 21, FTX Japan, the Japanese subsidiary of troubled cryptocurrency exchange FTX, resumed withdrawals for its customers after assets were frozen for approximately three months as part of international bankruptcy proceedings.

Customer funds, which were managed separately in compliance with Japanese laws and regulations, were revealed as being worth 5.6 billion Japanese yen ($41.58 million) in digital currencies and 1 billion yen ($7.43 million) in fiat currencies as of Feb. 20.

The company also reported its own net assets to be around 10 billion yen ($74.3 million) in September 2022, which increased to 17.8 billion yen ($132.2 million) in the last update on Nov. 21.

Since reopening withdrawals, over 6.6 billion yen ($49 million) in crypto and fiat has left the exchange. To withdraw, users were required to verify their account balance and transfer their assets to Liquid Japan, another cryptocurrency exchange previously acquired by FTX.

As tabulated by FTX Japan, 3,453 individuals and 94 corporate accounts were eligible to withdraw their balances. There were 1,947 fiat withdrawals and 5,697 total crypto withdrawals. A total of 7,026 accounts were transferred from FTX Japan to Liquid Japan. They were the lucky ones, as due to bankruptcy proceedings the vast majority of FTX customers, including users of FTX US, are still unable to withdraw their assets.

NBA China wants to mint more NFTs

On Feb. 21, the National Basketball Association’s Chinese subsidiary announced a partnership with Alibaba-owned Ant Financial. Among many items, the two entities will carry out comprehensive cooperation regarding NBA video content, program broadcasting, joint membership and the creation of a miniseries.

In addition, both NBA China and Ant Financial wish to further pursue the joint development of nonfungible tokens and to launch “multimedia NFT drops to fans.” Since last year, NBA China has minted a series of Chinese New Year basketball-themed NFTs using the latter’s Ant Chain.

Tencent Cloud’s great leap forward to Web3

Tencent Cloud, the cloud business brand of Chinese internet giant Tencent, announced on Feb. 22 that it would support the development of the Web3 ecosystem and provide technical support to developers to promote its digitalization.

Firstly, Tencent Cloud unveiled a new product, dubbed “Metaverse-in-a-Box,” that the internet giant says will act as a one-stop solution that integrates infrastructure, products, software development kits and low-code solutions to be used primarily in games and media entertainment.

In addition, the firm signed a memorandum of cooperation with Ankr, Avalanche, Scroll and Sui to further those goals. For Ankr, this means the joint deployment of a series of blockchain API services for remote procedure call nodes on Tencent Cloud. As for Avalanche, it will join forces with Tencent Cloud to provide developers with efficient and fast node settings. Finally, Tencent Cloud will assist developers with building practical projects on Scroll and create cloud game development tools with Sui. Tommy Li, vice president of Tencent Cloud, said:

“Tencent Cloud Metaverse-in-a-Box meets the needs of customers and developers for different scenarios, helping them obtain better real-time interactive experience, larger-scale communication and more secure access services, and quickly build online and video virtualized and virtualized metaverse scene applications.”

DeFi token rises 550% after Huawei shill 

In a 30-second video posted by Huawei on Feb. 21, the Chinese telecom conglomerate showcased DeFi protocol Defactor. During the video, co-founder Alejandro Gutierrez said the project is about creating a bridge between traditional finance with DeFi, exploring the tokenization of real-world assets and building partnerships with start-ups and large corporations like.

In the eyes of crypto investors the statements Gutierrez made were anything but ordinary. Immediately after the video was published, Defactor (FACTR) tokens recordeda gain of over 550% in less than three days, trading at $0.14 apiece at the time of publication. Defactor is currently part of Huawei International Scale-Up Program in Ireland.