China NFT Weekly: A Bad Week For Crypto

Digestible news on the latest developments in Web3, NFT, Blockchain and Metaverse in China and beyond, compiled for you every week on Pandaily.

This week: Tencent Huanhe’s NFT market to close, Zipmex becomes latest crypto exchange to halt withdrawals, Hong Kong’s currency chief says crypto and DeFi won’t go away, and more.




Tencent to close the NFT Huanhe platform

Tencent has laid off an undisclosed number of employees from its NFT shopping and collection platform Huanhe 幻核, with the ultimate goal of shutting down the business, according to people familiar with the matter. Caixin Global and Forkast first reported the story.

  • The news comes amid heightened regulatory scrutiny of digital assets in China, with tech giants including Tencent and Ant Group signing a pact last month to stop secondary NFT trading.
  • Since its launch in August 2021, Huanhe has adjusted its development strategy to avoid regulatory risks. Sales on the platform have been slow since June, and the company is set to take on an international version of the NFT platform.
  • Meanwhile, Jingtan, an NFT platform operated by fintech giant Ant Group, has not issued any takedown notices, sources told Caixin.
  • Chinese regulators and state media have repeatedly warned the public about the risks associated with secondary trading and speculation in digital assets, but the rules around NFTs remain unclear.
  • Last September, Beijing issued a blanket ban on all crypto-related trading and mining, while making blockchain technology a strategic priority.
    • The blockchain-based service network, or BSN, is part of the country’s efforts to build capacity in the sector.
    • Chinese President Xi Jinping said his country should “seize the opportunities” presented by blockchain technology. (Forcast, Caixin Global)

READ MORE: Chinese tech giants vow to end NFT speculation

Zipmex has become the latest crypto exchange to block withdrawals

Singapore-based crypto exchange Zipmex has halted withdrawals, becoming the latest whistleblower firm in a series of wrongdoings sweeping the digital asset industry. The Washington Post and Bloomberg first reported the story.

  • Founded in 2018, Zipmex lists two million users and operates in Singapore, Thailand, Australia, and Indonesia. With its native jet trading below 40 cents, down more than 90% from its peak, the platform is facing serious financial difficulties as a result of transactions with struggling crypto lenders such as of Babel Finance and Celsius Network. .
  • “Due to a combination of circumstances beyond our control, including volatile market conditions and the resulting financial difficulties for our major trading partners, in order to maintain the integrity of our platform, we have suspended the withdrawals until ‘at further notice’, wrote. through the company on Twitter. the week.
  • “Our exposure to Celsius is small. As such, we intend to charge it to our own balance,” the company said in a separate statement Thursday.
  • Zipmex discussed its options with both companies. Earlier, the company’s Thai chief executive appeared in a since-deleted YouTube video, saying Zipmex was negotiating a potential bailout with investors.
  • One of Zipmex’s most popular services, ZipUp+, which offers up to 10% returns on crypto deposits, is currently on hiatus. (Washington Post, Bloomberg)

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Hong Kong’s money chief says Crypto and DeFi are not going away

The CEO of the Hong Kong Monetary Authority (HKMA) Eddie Yue said that closer scrutiny of stablecoins will help reduce the risks of DeFi, but the technology, which aims to remove the need for intermediary financiers to lend and invest, given that it plays an important role in the financial system. Reuters and CoinDesk first reported the story.

  • Disparaging himself at a meeting of G20 finance officials, Yue called for more scrutiny of the crypto industry to avoid another crash like the algorithmic stablecoin terraUSD (UST) and its companion token, LUNA , according to CoinDesk, citing a FinBold report.
  • “Despite the Terra-Luna incident, I believe that crypto and DeFi will not disappear – although they may be prevented – because the technology and business innovation behind these developments will likely be important to our financial future. system” , Yue said.
  • The CEO further argued that stablecoins and crypto exchanges are gateways to DeFi projects, and therefore easier to regulate than the products themselves.
  • In January, the HKMA released a statement announcing that it would continue to explore crypto technology with caution because it “strikes the right balance between maintaining a safe and efficient financial system.” in Hong Kong and support financial innovation.” , followed by a working paper next year showing that the rise of the stablecoin will harm Hong Kong’s local currency. (CoinDesk, Reuters)

Hong Kong launches first metaverse churches with avatars and virtual preachers

In February, Hong Kong Baptist pastor Reverend Enoch Lam Yee-lok launched Me Church, a church in the metaverse where people can attend virtually as avatars. SCMP first reported the story.

  • The Reverend said this was done to provide a solution to worshipers who are not comfortable with the Covid rules of the Special Administrative Region, as well as to people who may be bored with traditional services.
  • Lam, although 60 years old, is known for his unconventional preaching methods. Along with launching the Metaverse Project to target the younger, more tech-savvy, Reverend also created So Gor (Brother Jesus), a comedy show to promote religion.
  • Lam also said that Covid has shaken the attitudes of older worshippers, who are especially now used to attending services online from the comfort of their homes.
  • Online churches have become more popular in recent years, with some churches even accepting crypto as donations. Around the world, one of the most famous churches is Life.Church, an American project that grew out of a network of physical churches.
  • A church in the metaverse could potentially offer a more direct and visceral way to engage with the Bible, the reverend explained, using the story of Noah, who joined the ark to prepare for a great flood that no one would know about. . “They (young people) don’t just sit and listen to you,” he said. “They want to jump in and build Noah’s Ark themselves.” (SCMP)

India’s Finance Minister Backs Central Bank’s Crypto Ban, Seeks International Collaboration

India’s Finance Minister Nirmala Sitharaman reiterated the call for the Reserve Bank of India (RBI) to ban crypto, but said significant international collaboration is needed to pass any legislation. CoinDesk and TechCrunch first reported the story.

  • In a written statement in response to questions raised by Thirumaavalavan Thol, a Member of Parliament, the Finance Minister said, “The RBI has recommended the development of legislation in this sector. The RBI is of the view that the cryptocurrencies should be banned,” he said.
  • “Cryptocurrencies are by definition borderless and beyond international collaboration to prevent regulatory arbitrage. Therefore, any regulatory or restrictive legislation can only be effective after significant international collaboration to evaluate the risks and benefits and in the evolution of common taxonomy and standards,” he added.
  • The Financial Stability Board (FSB), a body of regulators, treasury officials and concerned bankers from the Group of 20 economies, including India, said earlier this month that it would come with “strong ” global rules “” for cryptocurrencies in October of this year. . The FSB said that crypto assets were used primarily for “speculative purposes” and did not operate in an “unregulated space.”
  • Earlier this year, India moved to tax transactions and profits related to crypto trading. This is seen as one of the first steps taken by the central bank to regulate the industry. (CoinDesk, TechCrunch)

Minecraft developer Mojang has banned NFTs

Minecraft developer Mojang said on Wednesday that it will implement a ban on blockchain and NFT technology. The Protocol and Yahoo Finance first reported the story.

  • Minecraft has a marketplace where people can sell their creations for others to use. Mojang noted that some companies have recently started offering NFTs associated with Minecraft skin packs and world files that people can purchase.
  • The studio said it would be possible for players to earn Minecraft NFTs for activities completed in the game or elsewhere, but Mojang disagreed with all of that.
  • The company further stated that creators can continue to use the game as a platform to create and sell NFTs, but digital assets will not be included in Minecraft’s client and server applications.
  • “To ensure that Minecraft players have a safe and inclusive experience, blockchain technologies are not allowed to be integrated into our Minecraft client and server applications, or used to create NFT-related of any game content, including worlds. , skins, personality items, or other mods,” Mojang wrote in the post.
  • “We will also pay close attention to how blockchain technology evolves over time to ensure that the above principles are maintained and to determine if this will lead to more secure experiences or other practical and inclusive games applications.”, added the company. “However, we have no plans to implement blockchain technology in Minecraft at this time.” (Protocol, Yahoo Finance)

That’s it for this week’s newsletter – thanks for reading! As always, we welcome any feedback on how to improve this newsletter. Write to us at [email protected]. See you next week!

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