Asia Express – Cointelegraph Magazine
Our weekly roundup of news from East Asia curates the industry’s most important developments.
Blowing up a Singaporean crypto hedge fund worth an estimated $10 billion at the top was by all accounts a life-changing event for co-founders Kyle Davies and Zhu Su. It seems that the trauma of the incident had been so severe that the two leaders embarked on a series of spiritual journeys from mid-2022 to transcend the effects of Three Arrow Capital’s (3AC) bankruptcy.
The journey seems to have been fruitful. From escaping persecution of creditors, to make philosophical observations after witnessing deaths of German tourists, to discover Allah’s grace through Islam, to revive their passion for life through the culinary arts, to find company in Japanese NFT avatars, perhaps Davies and Su have finally found the answer to overcoming life’s difficulties: If you don’t get it the first time, keep trying until you succeed.
After reportedly soliciting $25 million from investors in January, the former 3AC founders launched the OPNX exchange on April 5. The exchange is designed to trade bankruptcy claims from fallen crypto entities, such as their own bankrupt hedge fund. It is unclear how the highly personal and private nature of bankruptcy claims could allow them to be traded on a public exchange without prior approval from bankruptcy estates or courts.
Still, Davies and Su decided to go ahead with the idea anyway. On the first day of trading, the total trading volume on OPNX in the previous 24 hours was reportedly $1.26. The report drew swift condemnation from OPNX, which clarified that the exchange’s 24-hour trading volume was actually $13.64, or 982% more than stated.
On the second day, Zhu Su claimed that the exchange facilitated $373 in trading volume after a media blitz drew much attention to the lackluster results. But with great power comes great responsibility. Despite improving the exchange’s trading volume by 2,634% in one day, OPNX’s traction was partially derailed by Twitter suspending its official account for violating its terms of service.
Su has the site created a Chinese Telegram channel for official OPNX communications. Meanwhile, the two were friendly reminded by critics once again that despite their continued entrepreneurship, creditors are still demanding an estimated $3.5 billion from their defunct hedge fund.
Huobi’s liquidation controversy
In a letter sent to Chinese news aggregator Odaily.news, cryptocurrency exchange Huobi Global appears to have presented its side of the story regarding a flash crash that affected its native Huobi Token (HT) on March 10.
On the date of the incident, HT plunged to as low as $0.31 apiece from a high of $4.85 before later recovering most of its losses. It is currently trading at $3.58 at the time of publication.
According to Huobi, the incident was caused by “industry-wide macro events” related to the recent failure of US technology banks. “Under such price pressure, repeated selling by large investors, and lack of liquidity with the HT token, led to margin liquidations, and in turn caused many leveraged investors to suffer losses,” Huobi wrote.
The incident led to large losses among users who pledged HT as collateral for loans or who simply held the token with leverage. Amid guidance from self-proclaimed “advisor” and de facto owner of Huobi, Justin Sun, Huobi rolled out a compensation program for users affected by HT flash crash, claiming that “more than 98% of affected users have negotiated to a satisfactory solution with the platform and received compensation.”
However, one user, @lantian666, who claims to have lost nearly $4 million during the incident, claims that his losses have yet to be fully compensated by Huobi. In the Odaily letter, Huobi acknowledged that one user lost an estimated $2.9 million after the flash crash caused liquidations. lantian posted a series of screenshots and claims that Huobi’s customer service had only agreed to waive part of the liquidation fees, which is nowhere near his loss of trading positions.
The sun has tired that Huobi will “bear all influence-through position losses on the platform as a result of this market volatility of HT.” Huobi has stated that it seeks to “reach a consensus as soon as possible with the remaining users who still have doubts about the current solution and negotiate a more satisfactory solution.” However, the exchange also wrote that it did not want such compensation to “encourage users to engage in high-risk transactions.”
Justin Sun’s troubled acquisition
According to allegedly leaked screenshots of employees on April 4, Huobi Global plans to cut the number of employees by another 200, and the exchange is apparently not yet profitable. Last November, blockchain personality and Tron founder Justin Sun reportedly bought 100% of a co-founder’s stake in the exchange through his entity About Capital.
There have been problems since – but the stock exchange had problems before as well. Early this year, Huobi reportedly reduced its employee benefits and laid off as much as 20% of employees. The exchange’s market share had fallen from an estimated 5.4% in the first quarter of 2022 to 2.2% in the last quarter. On April 5, Sun denied that he was in talks to sell his Huobi stake to Binance.
Huobi was one of the largest cryptocurrency exchanges in the world, holding a 19% market share in 2020 before China’s crypto exchange ban went into effect and it had to say goodbye to much of its user base. Sun apparently has a plan to circumvent the ban as part of the turnaround. The proposed scheme involves leveraging Huobi’s digital identity partnership with the Caribbean island of Dominica. Mainland Chinese users can sign up for Dominica’s digital citizenship, then allegedly use their new “citizenship documents” to create a Huobi account.
Sun is currently facing a lawsuit from the US Securities and Exchange Commission over allegations of market manipulation related to the Tron and BitTorrent tokens. Recent reports also suggest that Sun was stripped of his status as Grenada’s ambassador to the World Trade Organization in June 2022, stripping him of the fancy title of “His Excellency” and access to a diplomatic passport that gives him theoretical immunity from prosecution.
Microsoft’s new blockchain partnership
According to a recent announcement, Singaporean game studio Metagame Industries has joined Microsoft for the Startups Founders Hub through the ID@Azure program. The partnership with Microsoft will explore the use of AI and cloud computing in Web 3.0 game development.
Metagame Industries will receive Azure credits, OpenAI Services, technical support and business development resources as part of the deal. “We are excited to work with Microsoft’s tools and technology to create innovative and immersive gaming experiences,” said Joe Zu, CEO of Metagame Industries.
The firm is the developer behind Abyss World, a third-person dark fantasy action role-playing game set to launch on Mysten Labs’ Sui blockchain in Q4 2023. Abyss World will feature an in-game NFT factory that enables the minting of digitized weapons and heroes via monster drops.
Token rewards will also be available to players who complete special tasks in the PvE section, climb the game leaderboard, and win PVP arena seasons. Developers also plan to implement an Abyss World Decentralized Autonomous Organization (DAO) to regulate game tasks such as new systems and the introduction of new character sets.
Asia Express previously reported that Microsoft has partnered with decentralized blockchain infrastructure provider Ankr on Microsoft Azure. Rashmi Misra, Microsoft’s general manager of artificial intelligence and emerging technologies, commented that the partnership with Ankr will allow projects to access “blockchain data in a reliable, scalable and secure way.” The tech conglomerate is also testing a Web 3.0 wallet integration for its native Microsoft Edge browser.
