China NFT Weekly: A Bad Week For Crypto

Digestible news on the latest developments in Web3, NFT, Blockchain and Metaverse in China and beyond, collected for you weekly by Pandaily.

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




Tencent to close the NFT Huanhe platform

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

  • The news came amid increased regulatory scrutiny of digital assets in China, where tech giants including Tencent and Ant Group signed a pact last month to stop secondary NFT trading.
  • Since launching in August 2021, Huanhe has adjusted its development strategy to avoid regulatory risks. Sales on the platform have been sluggish since June, and the company is poised to pull 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 surrounding 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 has said his country must “seize the opportunities” offered by blockchain technology. (Rejection, Caixin Global)

READ MORE : Chinese tech giants vow to end NFT speculation

Zipmex becomes the latest crypto exchange to block withdrawals

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

  • Founded in 2018, Zipmex has 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 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, we are suspending, in order to preserve the integrity of our platform, until ‘with further notice,'” written by the company on Twitter.week.
  • “Our exposure to Celsius was minimal. As such, we intended to transfer it to our own balance sheet,” the company said in a separate statement on Thursday.
  • Zipmex discussed its options with two companies. Earlier, the company’s Thai chief executive appeared in a since-deleted YouTube video and said Zipmex was negotiating a potential bailout with investors.
  • One of Zipmex’s most notable 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 monetary chief says Crypto and DeFi won’t go away

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

  • Yue hurt himself at a meeting of G20 finance officials and called for more scrutiny of the crypto industry to avoid another crash like that of the algorithmic stablecoin terraUSD (UST) and its companion token, LUNA, according to CoinDesk, citing a report by FinBold .
  • “Despite the Terra-Luna incident, I believe that crypto and DeFi will not disappear – although they may be slowed down – as the technology and business innovation behind these developments will likely be important to our future financial system”, said Yue.
  • 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 signaling that it would continue to explore crypto-technology with caution as it “finds the right balance between maintaining a safe and efficient financial system in Hong Kong and supporting financial innovation.” , followed by a working paper next year indicating that the rise of the stablecoin could hurt the local currency in Hong Kong. (CoinDesk, Reuters)

Hong Kong launches first metaverse churches with avatars and virtual preachers

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

  • The priest said this was done to provide a solution for worshipers bothered by the special administrative region’s Covid rules, as well as those who might find traditional services boring.
  • Lam, although in his 60s, is known for his unconventional preaching methods. Along with launching the Metaverse project to target younger, more tech-savvy devotees, Reverend also created Then Gor (Brother Jesus), a comedy program promoting religion.
  • Lam also said that Covid has shaken the attitudes of older worshippers, who are now more accustomed to attending services online from the comfort of their homes.
  • Online churches have become increasingly popular in recent years, with some churches even accepting crypto as a donation. Globally, one of the most well-known churches is Life.Church, an American project that grew out of a network of physical churches.
  • A church in the metaverse could possibly offer a more direct and visceral way to engage with the Bible, the pastor explained, using the story of Noah building an ark to prepare for a massive flood that no one would know about. thought it was on its way. . “They (young people) won’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 cooperation

India’s Finance Minister Nirmala Sitharaman echoed the Reserve Bank of India’s (RBI) call to ban crypto, but said significant international cooperation was needed for any legislation to pass. 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: “RBI has recommended development of legislation on this sector. RBI is of the view that cryptocurrencies should be banned,” she said.
  • “Cryptocurrencies are by definition borderless and go beyond international cooperation to prevent regulatory arbitrage. Therefore, any regulation or prohibition legislation can only be effective after significant international cooperation on the assessment of risks and benefits and the development of common taxonomy and standards,” she added.
  • The Financial Stability Board (FSB), a body of regulators, financial authorities and concerned bankers from the Group of 20 economies, including India, said earlier this month that it would come up with “robust” global rules”” for cryptocurrencies in October this year . The FSB said that cryptoassets were primarily used 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 was seen as one of the first steps the central bank took to regulate the industry. (CoinDesk, TechCrunch)

Minecraft developer Mojang bans NFTs

Minecraft developer Mojang said on Wednesday it would introduce a ban on blockchain technology and NFTs. 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 for people to purchase.
  • The studio said it might have been possible for players to earn Minecraft NFTs for activities completed in-game or elsewhere, but Mojang disagrees with all of this.
  • The company further stated that creators can continue to use the game as a platform to create and sell NFTs, but the digital assets will not be integrated with Minecraft client and server applications.
  • “To ensure that Minecraft players have a safe and inclusive experience, blockchain technologies must not be integrated into our Minecraft client and server applications or used to create NFTs associated with in-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 determine whether this will enable more secure experiences or other practical and inclusive applications in games,” the company added. “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 feedback on how you can improve this newsletter. Write to us at [email protected]. See you next week !

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