$308M crypto laundering scheme busted, Hashkey token, Hong Kong CBDC: Asia Express
Visa completes Hong Kong digital forex trial with HSBC and Hang Seng
Hong Kong is one step nearer to a central financial institution digital forex (CBDC) with the discharge of its profitable section 1 leads to collaboration with Visa, HSBC and Hang Seng Bank.
According to a Nov. 1 announcement, Visa stated that it achieved “near real-time” finality with transfers involving tokenized deposits of the digital Hong Kong greenback (e-HKD).
“Tokenized deposits were burned on the sending bank’s ledger, minted on the receiving bank’s ledger, and simultaneously settled interbank via the simulated wholesale CBDC layer,” the funds agency wrote.
“This would provide for settlement in an atomic manner with better streamlining of any operational dependencies imposed by financial institutions and other intermediaries, thus improving liquidity management.”
The cost processor additionally said that its digital HK greenback check pilot was practical 24/7, surpassing the uptime of conventional monetary methods, which usually don’t perform after hours or on weekends. In addition, the agency wrote that “tokenized deposits can be fully transacted while remaining encrypted, without revealing information about identity, balances, or transaction amounts to non-bank users.”
For its subsequent steps, Visa plans to discover using e-HKD in tokenized asset markets and programmable finance to automate actual property transactions. “In this pilot’s Property Payments use case, the payment from a buyer transferring the remaining balance tokens to the property developer may be automated upon reaching the completion date of the contract, minimizing lag time in closure of the process,” the corporate stated. Other areas of analysis curiosity embody the enlargement of retail options and digital cross-border funds.
Despite the promising outcomes, no particular timelines have been given for the complete launch of the Hong Kong digital greenback and even that such a launch will happen. In its Oct. 30 report, the Hong Kong Monetary Authority warned there are nonetheless points to resolve:
“For instance, an rCBDC issued as a programmable money may be more susceptible to cybersecurity risks, as it may present more mediums for external threats to inject malicious code.”
With the silent nod from Beijing’s central authorities, Hong Kong has been striving to turn out to be a Web3 hub for blockchain within the Asia-Pacific Region. However, such efforts had been overshadowed by the collapse of the JPEX crypto alternate, leading to losses exceeding $150 million for Hong Kong traders. Since the incident unfolded, belief in cryptocurrency amongst native residents has fallen drastically.
Hashkey’s regulated alternate token
Hashkey, one of many first crypto exchanges to obtain a regulatory license in Hong Kong, will introduce an alternate token in 2024.
According to the recent white paper, the “HashKey EcoPoints” (HSK) token will likely be minted on Ethereum with a complete provide of 1 billion. Out of this quantity, 65% is reserved for customers, 30% for Hashkey workers, and 5% for its ecosystem treasury.
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The token will likely be distributed as incentivizes to ecosystem customers and distributors and won’t be “sold via private or public sales for fundraising purposes.” As for utility, the corporate states that the token could possibly be used to settle buying and selling charges, together with early entry to future token subscriptions and product upgrades on its alternate providers.
The alternate additionally pledges to purchase again HSK tokens with as much as 20% of earnings generated from associated Hashkey providers. “HashKey implements an offsetting issuance mechanism (burning) to protect HSK holders from the dilutionary impact of rewards-based increases in HSK circulating supply,” the agency wrote. However, regulatory approval remains to be required for the token design plan:
“The contents of this whitepaper have not been reviewed by any regulatory authority in Singapore or Hong Kong. You are advised to exercise caution in relation to the information in this whitepaper and any transaction that you intend to carry out involving HSK.”
In August, Hashkey, alongside crypto alternate OSL, obtained one of many first regulatory licenses for retail crypto buying and selling in Hong Kong. Its buying and selling quantity initially stagnated however has since gained traction. Only choose cash and tokens — resembling Bitcoin, Ethereum, Tether and Avalanche — are authorized to be listed on the alternate.
$308M syndicate manipulated crypto markets to launder cash: Police
Nineteen Chinese nationals have been sentenced for his or her function in a $308 million money-laundering scheme involving cryptocurrencies that operated from November 2020 and April 2021.
According to an Oct. 31 report by the Chongqing Tongliang District People’s Court, Mr. Jiang and Mr. Deng, the principal conductors of the cash laundering syndicate, collectively laundered a complete of $308 million price of Bitcoin and Tether for proceeds of crime associated to on-line playing and wire fraud.
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Police say that to keep away from platform monitoring and Know Your Customer necessities, the accused people orchestrated a complicated scheme of utilizing peer-to-peer transactions, the place cash had been bought at “unusual prices relative to spot markets” for the stablecoin Tether after which transferred to exchanges for money.
“By fabricating pretexts such as withdrawing project funds and migrant workers’ wages, they organized gang members to withdraw cash from bank counters in Chongqing, Sichuan, Shanghai and other provinces and cities. The amount of cash withdrawals ranged from hundreds of thousands to several million yuan each time. After withdrawing the cash, the cash is packaged in trolley cases, backpacks, etc., and transported by plane.”
The 19 people, together with Mr. Jiang and Mr. Deng, had been sentenced to 6 months to 6 years in jail. “In recent years, the phenomenon of criminals committing illegal and criminal activities through telecommunications networks has become increasingly rampant, posing a huge threat to the legitimate rights and interests of the general public,” the presiding decide wrote.
Due to such an increase in wire fraud involving cryptocurrencies, China’s Central Government has cracked down harshly on crypto-related actions within the nation, though there have been some signs of relaxation as of late. Nevertheless, such enforcement actions have typically resulted in collateral damage for overseas traders utilizing Chinese-based crypto providers with out legal intent.
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Zhiyuan Sun
Zhiyuan Sun is a journalist at Cointelegraph specializing in technology-related information. He has a number of years of expertise writing for main monetary media shops resembling The Motley Fool, Nasdaq.com and Seeking Alpha.
