Alleged Chinese bribery from SBF, Binance clarifies account freeze: Asia Ex Cryptocurrency scrgruppen

SBF allegedly bribes Chinese officials with $150 million to unfreeze accounts, Binance justifies ban on Hamas users Meanwhile, Huobi hacker returns all $8 million in stolen assets.

Our weekly news roundup from East Asia curates the most important developments in the industry.

SBF’s Chinese bribery scandal deepens

According to As of October 11 testimony from Carolyn Ellison, co-founder of FTX-linked hedge fund Alameda Research, fellow disgraced FTX founder Sam Bankman Fried allegedly paid $150 million in bribes to Chinese government officials in 2021, higher than the $40 million that was revealed About him in the beginning.

Two years ago, Alameda Researchs’ $1 billion worth of digital assets on cryptocurrency exchanges OKX and Huobi were frozen by Chinese law enforcement as part of a money laundering investigation, Ellison said during the FTX trial. Senior FTX executives, such as Chief Operating Officer Constance Wang and Alameda trader David Wu, were also involved in the incident. The individuals first tried to contact a Chinese lawyer to unfreeze the funds, but it was unsuccessful.

FTX and Alameda employees then allegedly created accounts on OKX and Huobi using the identification of a Thai prostitute to negotiate the return of the funds. When that didn’t work, Ellison Bankman accused Fried of paying a $150 million bribe to unfreeze the accounts. Bribery was recorded as the main thing in Alameda’s future budgets. According to Ellison’s testimony, the funds were unfrozen immediately after the bribe.

Judge Lewis Kaplan, presiding judge of the US District Court for the Southern District of New York, reminded jurors that Bankman Fried’s alleged bribery of Chinese officials is not within the scope of the ongoing FTX trial. Instead, the second trial on SBF’s bribery charges has been scheduled for March 11, 2024. The FTX trial will continue through October.

Binance explains account freeze

Yi He, co-founder of Binance, clarified on Chinese social media app WeChat earlier this week that only users suspected of violating international sanctions on the exchange will have their accounts frozen.

The statement came after a flurry of inquiries in response to local news reports that the exchange had frozen the accounts of suspected Hamas activists at the request of Israeli law enforcement authorities. Yi explained:

Hamas is a terrorist organization designated by the United Nations. Therefore, any organisation, including banks and trading platforms, will need to cooperate in receiving freeze requests. This is not something Binance can decide on its own.

The Binance CEO commented: I have no political biases, however no trading platform can refuse such law enforcement requests. Palestine has an organized government. Hamas is a local armed group. They kill civilians. that’s the problem. Hamas is not Palestine; The freeze targets Hamas, not Palestine.

In a follow-up post on October 11, Ye He also clarified that Binance will not confiscate or freeze the assets of ordinary users. Rules are made by the powerful. In the face of international regulations, Binance is nobody’s business. She also noted that despite the ongoing war between Russia and Ukraine, the exchange has not frozen the accounts of ordinary Russians.

Cryptocurrency lending has been invalidated by a second Chinese court

A second Chinese court has ruled that cryptocurrency lending contracts in China are not protected by law because the underlying asset is illegal.

like Narrated by By the Nanchang People’s Court on October 10, the plaintiff Mr. Meng lent US$80,000 to the defendant Mr. Gang in April 2021 for the purpose of stablecoin trading. The loan was to be repaid within six months. Mr. Jang subsequently defaulted on the loan, leading to Mr. Meng filing a civil suit. The case was dismissed and appealed.

The president of the court wrote in their decision:

There are legal risks involved in participating in virtual currency investing and trading activities. If any legal person, individual organization or natural person invests in virtual currencies and related derivatives that violate public order and good customs, the relevant civil legal proceedings will be invalid, and they will bear the resulting losses.

The judge also explained that according to various legislations constituting the ban on cryptocurrencies in China, virtual currencies only exist in digital form, are not legal tender, have no legal compensation, such as Bitcoin, Ethereum, Tether, etc., and cannot be used as currency. currency in the market. Commercial activities related to virtual currency are illegal financial activities that harm the national financial system, financial security and public social interests, and are strictly prohibited.

The ruling does not extend to the central bank digital currency, the digital yuan, which the presiding judge said is legal tender in digital form issued by the People’s Bank of China. It is operated by designated operating agencies and redeemed by the public. It is equivalent to banknotes and coins.

Earlier in August, a Chinese man lost $10 million worth of Bitcoin after a borrower defaulted on his Bitcoin lending agreement and a court ruled the contract invalid, citing similar reasons as the Nanchang People’s Court.

Huobi hacker returns all assets

According to According to a statement from Justin Sun, the actual owner of cryptocurrency exchange HTX, formerly known as Huobi, a hacker returned all 5,000 ether ($8 million) stolen during a security incident last month.

We confirmed that the hacker had returned all funds in full, as promised, and also paid the hacker a white hat bounty of 250 ETH. The hacker made the right choice. “We would like to express our gratitude to everyone in the industry for their help,” Sun wrote. On September 25, the Huobis hot wallet was hacked for 5,000 ETH in the first incident discoverer By blockchain analytics firm Cyvers Alerts.

Sun then offered a reward and threatened legal action if the money was not returned. During the incident, the blockchain figure also claimed that the exchange held about $3 billion in user assets. Last month, Huobi rebranded to HTX, surprising the community due to the name’s similarity to the now-defunct FTX cryptocurrency exchange.

Cryptocurrency scrgruppen