Bitcoin remains weak at $68,500, briefly dipping to $67,279 overnight. The Chinese market is experiencing significant disruptions, as Russian and Brazilian companies use cryptocurrency for payments to China. A Hong Kong crypto exchange license applicant with mainland connections has withdrawn from Hong Kong. The well-known Chinese airdrop studio "Anyi" was robbed of 500 wallets, losing over 3 million yuan. The former largest crypto exchange Mt. Gox moved substantial funds, confirmed as preparations for creditor repayments.
Russian and Brazilian Companies: Using Cryptocurrency for Payments to China
According to Bloomberg, at least two leading Russian metal producers have begun using USDT, a stablecoin issued by Tether, and other cryptocurrencies to settle some cross-border transactions with Chinese customers and suppliers. Executives from these companies stated that settlements are sometimes conducted through Hong Kong.
Since the Russia-Ukraine conflict began, large Russian enterprises have turned to blockchain, highlighting the enduring economic impact of international measures taken to address the war. Russian companies dealing in metals like nickel and steel, as well as commodities like timber, have faced challenges in receiving payments and purchasing equipment and raw materials, even without direct sanctions. Some companies have faced multiple penalties from the US, EU, and their allies.
Even in China, which has not joined international sanctions and has become a major export market for various Russian goods and a supplier of commodities and equipment, financial transactions have become more difficult this year. This is largely due to the US Treasury threatening secondary sanctions on lenders assisting in sanction evasion, tightening compliance measures.
"Using stablecoins, transfers can take just 5-15 seconds and cost only a few cents. If the sender already holds stablecoin assets, such transactions are highly efficient," said Ivan Kozlov, co-founder of Resolv Labs, which offers crypto-related products but does not engage in commodity trading. Tether's USDT stablecoin is pegged to the US dollar, making it more convenient for exporters.
Sebastian Serrano, CEO of Latin America's largest exchange, Ripio, stated that Brazilian companies are already using cryptocurrencies to pay Chinese suppliers. In an interview, Serrano mentioned that Latin American countries use cryptocurrencies in various ways, with Argentine companies using them to combat severe inflation.
Serrano also highlighted the use of cryptocurrencies in remittance transactions between the US and Mexico, adding that he believes the future of cryptocurrencies is closely tied to their use in capital markets. "In the coming years, we will see companies start using cryptocurrencies for financing. Future capital markets will be based on blockchain," he said.
Mainland-Related Crypto Exchanges: Withdraw from Hong Kong License Applications
According to the South China Morning Post (SCMP), stringent regulatory requirements and the inability to serve mainland investors are forcing global cryptocurrency exchanges to withdraw from Hong Kong. A year ago, several major companies opened branches in Hong Kong before new regulations were introduced, but ultimately withdrew their license applications as the new rules aimed to transform Hong Kong into a virtual asset hub.
According to the Hong Kong Securities and Futures Commission (SFC) website, local branches of major crypto exchanges with mainland China connections, such as OKX, Gate.io, KuCoin, Binance, and HTX (formerly Huobi), have withdrawn their applications for Hong Kong's Virtual Asset Trading Platform (VATP) licenses in recent months.
These companies were initially founded in China but now operate globally as some of the largest participants in the crypto industry. They showed interest in Hong Kong's new virtual asset regulatory regime, implemented in June last year, which requires exchanges to obtain licenses in Hong Kong. Companies with existing operations were given a one-year grace period, but those withdrawing applications must now close their Hong Kong businesses.
The SCMP reported that the stringent requirements imposed by the SFC appear to be one reason for these companies' exit. Out of the initial 24 applicant companies, seven have now withdrawn. However, the inability to serve mainland customers may be another primary reason.
Prominent Chinese Airdrop Studio "Anyi" Reports Theft
On Monday, the well-known Chinese airdrop studio "Anyi" reported that 500 wallets using fingerprint browsers were stolen, resulting in losses exceeding 3 million yuan. This incident has raised serious concerns about the security of such browsers. The official cause of the breach was an employee inadvertently downloading a trojan virus.
Chinese crypto media outlet "Wu Blockchain" reported that Anyi Studio claimed the theft of over 500 wallets, valued at more than 3 million yuan, using a particular fingerprint browser.
The so-called "airdrop," formally known as airdrop, refers to the process during blockchain projects or cryptocurrency issuance where project teams or issuers distribute tokens or digital assets to users for free as a means of promotion. The aim is to attract more users to participate in the project, increase the token's visibility and value, and serve as a marketing tool. Users can receive free tokens or digital assets through airdrops, thereby realizing value appreciation.
Former Largest Exchange Mt. Gox Moves Substantial Funds
According to a Cointelegraph screenshot shared on Twitter (now X), Mt. Gox confirmed multiple transactions earlier this week as preparations for creditor repayments ahead of the October 31 deadline.
In a letter, Mt. Gox stated, "Under the rehabilitation plan, the rehabilitation trustee is preparing to repay part of the rehabilitation claims allocated in cryptocurrency. This repayment method means that rehabilitation creditors can choose to receive Bitcoin and Bitcoin Cash (BCH) through specified cryptocurrency exchanges or by selling Bitcoin and BCH proceeds."
Mt. Gox emphasized, "The rehabilitation trustee is currently managing Bitcoin and Bitcoin Cash in a secure manner. As the trustee prepares for the aforementioned repayments, please wait for some time until the repayments are made."
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Hui Xin
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South China Morning Post
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