NFTs with Chinese Characteristics
Blockchain & Crypto Asia # 28
This is Coco again. In this issue, I focus on NFTs and exchanges.
Tencent winding down its NFT marketplace
Hong Kong SFC’s plan to regulate NFTs
Singapore High Court’s injunction over an NFT ownership rights dispute
Kia’s NFT campaign for its new model
Fundraising and expansion activities by Huobi, Kucoin, FTX
Sequoia India and SE Asia’s Podcast featuring Indian crypto exchange CoinSwitch
South Korea’s blockchain week
NFTs
In China, Tencent is winding down its NFT marketplace HUANHE launched only a year ago, partly because of the bear market, and partly because of the Chinese government’s prohibition of trading NFTs in the secondary market, making them less attractive to purchasers. Concerned about the potential risks of NFTs growing into another speculative asset that may lead to the instability of the financial market, the Chinese government wants companies to focus on the utility of NFTs, such as using NFTs to protect IP rights or using them in the Metaverse.
To distance themselves from cryptocurrencies which are banned in China, companies rebrand NFTs as “digital collectibles” which customers purchase with fiat currency - RMB. Very often, these NFTs are minted and distributed on permissioned blockchains, as in the case of Tencent. Such questions arise as how to validate the ownership rights, or how to transfer a person’s ownership of NFTs that were minted and purchased through Tencent’s private blockchain when HUANGHE is shut down. Read more.
In Hong Kong, the Securities and Futures Commission sent out a press release stating that some NFT activities have crossed the boundary between collectibles and financial assets. SFC called out two examples of fractionalized or fungible NFTs structured in a form similar to “securities” and interests in a “collective investment scheme” (CIS). Parties conducting such activities require a license. Read more.
In Singapore, The Singapore High Court ordered a worldwide injunction prohibiting the transfer of a Bored Ape NFT ownership which originally belongs to a Singapore citizen. In a dispute with his lender over the repayment of a loan collateralized with his Bored Ape NFT, this Singaporean sued his lender, who transferred the token to his own wallet and listed it on OpenSea for sale. It may be the first case where a court acknowledges a person’s ownership rights in an NFT. Read more.
NFTs are not regulated in Singapore yet. One of the biggest misconceptions that laypersons may have is that acquiring ownership of an NFT comes along with acquiring the IP rights to the underlying digital artwork or asset. Read more.
South Korea’s car company Kia is using NFTs in the marketing campaigns of its new model Kia Soul. Read more. Italian car manufacturer Alfa Romeo is introducing the world’s first NFT-certified vehicle Alfo Romeo Tonale.
Exchanges
Huobi was granted MVP Provisional Approval from Dubai’s VARA. In Thailand, Huobi had to shut down permanently with its operating license revoked by Thailand’s SEC for failing to comply with governing regulations. Thailand has 8 licensed crypto exchanges by February. Meanwhile, Huobi is applying for an exchange license in Hong Kong.
Here is Sequoia India and SE Asia’s Podcast interviewing crypto exchange CoinSwitch’s founder.
FTX is in talks to acquire South Korea’s second-largest exchange BitThumb. Some industry experts in South Korea are not optimistic about the transaction. Koreans don’t like to have a business bought out by a foreign entity. They think it is more likely to have FTX as an investor in BitThumb.
KuCoin received a $10 million strategic investment from SIG at an unknown valuation. Two months ago in May, KuCoin raised $150 million led by Jump Crypto through a pre-Series B round, bringing its total investments to $170 million with Round A combined, at a total valuation of $10 billion.
Event in Asia
Korea Blockchain Week 2022 starting August 8
In the innovative blockchain/crypto & digital asset ecosystem, Asia is the other side of the coin. Blockchain & Crypto Asia, which covers exclusively blockchain and crypto & digital asset developments in Asia, including regulation, investments, and company highlights, helps you stay on top of what is going on in the Far East. The content is selective and curated and serves as information only, not investment advice.
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