Our weekly roundup of news from East Asia curates the industry’s most important developments.
- SBF’s Chinese bribe scandal worsens
- Binance clarifies account freeze
- Crypto lending invalidated by second Chinese court
- Huobi hacker returns all assets
SBF’s Chinese bribe scandal worsens
According to October 11 testimony from Caroline Ellison, co-founder of FTX-linked hedge fund Alameda Research, 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 initially.
Ellison said during the FTX trial that two years prior, $1 billion worth of Alameda Research’s digital assets on crypto exchanges OKX and Huobi were frozen by Chinese law enforcement as part of a money-laundering investigation. Senior FTX executives, such as chief operations officer Constance Wang and Alameda trader David Wa, were also involved in the incident.
Then, FTX and Alameda staff allegedly created accounts on OKX and Huobi using the identification of a Thai prostitute to negotiate the return of funds.
Presiding Judge Lewis Kaplan of the United States District Court for the Southern District of New York reminded the jurors that Bankman-Fried’s alleged bribery of Chinese officials is not within the scope of the ongoing FTX trial. Instead, a second trial relating to SBF’s bribery charges has been scheduled for March 11, 2024.
Binance clarifies account freeze
Yi He, a co-founder of Binance, clarified on the Chinese social media app WeChat earlier this week that only accounts of users suspected of violating international sanctions will be frozen on the exchange. The statement came after a wave of inquiries in response to local news reports that the exchange froze accounts of suspected Hamas militants per Israeli law enforcement’s request.
The Binance executive commented: “I have no political biases, yet no trading platform can refuse such law enforcement requests. Palestine has an organized government. Hamas is a local militant group. They kill civilians; that’s the problem. Hamas is not Palestine; the freeze is targeted towards Hamas, not Palestine.”
Crypto lending invalidated by second Chinese court
Crypto lending contracts in China are not protected by law because the underlying asset is illegal, a second Chinese court has ruled. As narrated by the Nanchang People’s Court on October 10, a civil lawsuit involving a defaulted loan for stablecoin trading was dismissed by the court.
The ruling does not extend to the digital yuan central bank digital currency, which the presiding judge said “is a legal currency in digital form issued by the People’s Bank of China. It is operated by designated operating agencies and redeemed by the public. It is equivalent to banknotes and coins.”
Huobi hacker returns all assets
According to a statement by Justin Sun, the de-facto owner of cryptocurrency exchange HTX (formerly known as Huobi), a hacker has returned all of the 5,000 Ether ($8 million) stolen during a security incident last month. Sun wrote: “We have confirmed that the hacker has fully returned all funds, as promised. We would like to express our gratitude to everyone in the industry for their help.”
Last month, Huobi rebranded as HTX, raising community eyebrows due to the similarity of the name to the now-defunct crypto exchange FTX.
By Zhiyuan Sun