China NFT Weekly: A Bad Week for Crypto

China NFT Weekly: A Bad Week for Crypto

(Source: Knowlab) Digestible news on the latest developments across the fields of Web3, NFTs, blockchain, and metaverse in China and beyond, compiled for you every week by Pandaily.

This week: Tencent’s NFT marketplace Huanhe to close down, Zipmex becomes latest crypto exchange to halt withdrawals, Hong Kong monetary chief said crypto and DeFi won’t disappear, and more. Tencent to Shut Down NFT Platform Huanhe

Tencent is laying off an undisclosed number of employees from its NFT purchasing and collection platform Huanhe 幻核, with the ultimate intention of discontinuing the venture, according to sources familiar with the situation. Caixin Global and Forkast first reported the story. The news came amid intensified regulatory scrutiny over digital assets in China, with tech giants including Tencent and Ant Group signing a pact last month to stop NFT secondary trading.

Since its launch in August 2021, Huanhe has been adjusting its development strategy to avoid regulatory risks. Sales on the platform have slowed since June, and the company is set to roll out an international version of the NFT platform.

Meanwhile, Jingtan, an NFT platform run by fintech giant Ant Group, has not issued any notices of layoffs, sources told Caixin.

Chinese regulatory authorities and state media have repeatedly warned the public about risks associated with secondary trading and speculation of digital assets, but rules around NFTs remain blurry.

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 boost its capabilities in the sector.

Chinese President Xi Jinping has declared that his country needs to “seize the opportunities” presented by blockchain technology. ( Forkast , Caixin Global )

READ MORE: Chinese Tech Giants Vow to End NFT Speculation Zipmex Becomes Latest Crypto Exchange to Block Withdrawals

Singapore-based crypto exchange Zipmex halted withdrawals, becoming the latest company caught in the fallout from a series of defaults that are spreading throughout the digital assets 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 token trading below 40 cents, down over 90 percent from its peak, the platform is encountering severe financial difficulties stemming from dealings with troubled crypto lenders such as Babel Finance and Celsius Network.

“Due to a combination of circumstances beyond our control including volatile market conditions, and the resulting financial difficulties of our key business partners, to maintain the integrity of our platform, we would be pausing withdrawals until further notice,” the company wrote on Twitter last week.

“Our exposure to Celsius was minimal. As such, we were intending to write this off against our own balance sheet,” the company said in another statement on Thursday.

Zipmex is reportedly discussing its options with two firms. Earlier, the company’s Thailand chief executive appeared in a since-deleted YouTube video, saying that Zipmex is negotiating a potential bailout with investors.

One of Zipmex’s most notable services, ZipUp+, which offers as much as 10 percent returns on crypto deposits, is currently paused. ( The Washington Post , Bloomberg )

Hong Kong Monetary Chief Says Crypto and DeFi Won’t Disappear

Hong Kong Monetary Authority (HKMA) CEO Eddie Yue said that more scrutiny of stablecoins could help to reduce risks from DeFi, but the technology, which seeks to remove the need for financial intermediaries from lending and investing, will continue to play an important role in the financial system. Reuters and CoinDesk first reported the story. Speaking during a meeting of G20 financial officials, Yue called for greater scrutiny over the crypto industry to prevent another crash like that of algorithmic stablecoin terraUSD (UST) and its companion token, LUNA, according to CoinDesk, citing a report by FinBold.

“Despite the Terra-Luna incident, I think crypto and DeFi won’t disappear – though they might be held back – because the technology and the business innovation behind these developments are likely to be important for our future financial system,” Yue said.

The CEO further argued that stablecoins and crypto exchanges are gateways to DeFi projects, and hence easier to regulate them than the products themselves.

In January, HKMA issued a statement signalling it would continue to explore crypto technology with caution by “striking the striking the right balance between maintaining a safe and efficient financial system in Hong Kong and supporting financial innovation,” followed by a discussion paper next year saying the rise of stablecoin could potentially harm Hong […]

source China NFT Weekly: A Bad Week for Crypto

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