Our weekly roundup of news from East Asia curates the industry’s most important developments.
Cryptocurrency exchange Binance claims that it grew its user count by 30% year over year to 170 million.
According to Binance’s 2023 Annual Report published on December 28, its expansion efforts appear to be unaffected by its recent $4.3 billion settlement with the U.S. Department of Justice over money laundering charges.
The report states that during the year, the company increased its on-ramp features, with 431 tokens listed, 112 fiat currencies supported, and over 970 payment methods available to its clients. The firm also expanded its compliance budget from $158 million in 2022 to $213 million in 2023, a 35% growth.
Despite a surge in client numbers, multiple outlets (including Binance itself) reported the exchange’s spot market share fell from 55% at the start of the year to as low as 30.1% by December (according to CCData).
Its new compliance focused CEO, Richard Teng, has assured users that the exchange “is totally different” than when it focused on a pure growth strategy during its early years. Currently, the exchange is focused on building its infrastructure from the United Arab Emirates as well as France, and operates in 18 global jurisdictions.
The CCData report also shows OKX growing its share from 4% to 8%, and Bybit increasing from 1% to 6%.
Crypto exchange market share Dec 5 chart (CCData)
Meanwhile, crypto exchange Bitget emerged from largely unheard of a couple of years ago to a spot market share of 4% by November 2023 (according to CoinGecko), with higher rankings in the derivatives category. In its 2023 Annual Review, Gracy Chen, managing director of Bitget, said that the exchange now has a combined 20 million users across its subsidiaries, largely due to its $30 million investment into multi-chain wallet BitKeep and its subsequent rebranding to Bitget Wallet. In September, the exchange rolled out a $100 million Web3 fund dedicated to regional exchanges, data analytics firms, and media outlets operating within the ecosystem.
On the other hand, OG exchange HTX, formerly Huobi Global, has seen ailing fortunes for much of 2023. A report by CoinGecko suggests that the exchange’s spot market share fell to 8% compared to an all-time high of 22% in 2020, although it still ranks among the top three. At the beginning of 2023, an alleged employee revolt over pay and working conditions was crushed by senior management. Shortly after its rebranding in September, HTX suffered a double-whammy where its ecosystem and network of related companies were hacked four times in two months. Justin Sun, the de facto owner of the HTX exchange, has pledged to reimburse users for all losses.
An allegedly fake screenshot of police approving the seizure of cryptocurrencies is causing a stir within the Web3 community in China.
In a clarification statement posted by the City of Fuzhou Public Security Bureau, police said that the circulating screenshot, which alleged that law enforcement officials approved the seizure of 38,000 Ether (ETH) and thousands of Bitcoin owned by foreign individuals custodied on a Chinese Web3 protocol, was untrue.
“After verification, the relevant content was false information,” the Fuzhou Internet Police wrote. “We remind netizens not to make, believe, or spread rumors. The public security organs will severely crack down on internet rumors in accordance with the law and maintain a clean internet environment.
The initial panic sparked by the screenshot was likely fueled by its allusion to reality. In July 2023, Chinese cross-chain protocol Multichain was shut down after its CEO, Zhaojun He, was arrested by police and has not been heard from since. At the time, over $1 billion worth of digital assets from both Chinese and foreign users had been secured on the protocol and remain unretrievable. For much of last year, Chinese police have been cracking down on prominent Web3 executives in the country and confiscating protocol assets without due process.
A man alleged to be Multichain co-founder and CEO Zhao Jun (Telegram)
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Hong Kong brokerage Victory Securities has already surpassed $10 million in monthly trading revenue after securing a virtual asset licensing regime (VASP) from the Securities and Futures Commission in Q4 2023. On December 30, Kennix Chan, executive director of Victory Securities, told local news outlets that in addition to the revenue milestone, several of the company’s crypto divisions were “already profitable.” Currently, only Ethereum and Bitcoin are available for trading on licensed Hong Kong exchanges, with 80% of the trading volume on Victory Securities stemming from Bitcoin.
Last June, Hong Kong initiated its mandatory VASP licensing regime for all exchanges in the region, with OSL, Hashkey, Victory Securities, and Interactive Brokers being among the first entities to receive regulatory approval. Simultaneous to the regulatory efforts, Hong Kong also saw a series of financial scandals surrounding unlicensed exchanges such as JPEX and Hounax. Nevertheless, city officials said that the VASP licensing regime would proceed undeterred despite the presence of potential bad actors.
Hong Kong cityscape (Pexels)
On January 3, the price of Bitcoin fell by more than 10% to $40,800 apiece before recovering most of its losses. The price action coincided with the release of a report by Matrixport analysts claiming that the U.S. Securities and Exchange Commission would not approve a spot Bitcoin ETF in January. Matrixport analyst Markus Thielen wrote:
“The current five-person voting Commissioners leadership critical for the ETF approval of the SEC is dominated by Democrats. SEC Chair Gensler is not embracing crypto in the U.S., and it might even be a very long shot to expect that he would vote to approve Bitcoin Spot ETFs.”
In response to a social media storm, Jihan Wu, founder of Matrixport and Bitcoin mining firm Bitdeer, stated the firm “does not receive insider information from U.S. regulators.”
“Matrixport’s analysts base their reports on publicly available information. It’s unrealistic to believe that a Matrixport report could trigger a trillion $ size market to crash. If someone attributes a flash crash to our report, I suggest examining the analysts’ expertise more closely.”
Wu also said that the widespread dissemination of the report “was not planned by Matrixport and is beyond our control.” Founded in 2019 in Singapore, Matrixport publishes digital asset investment research for its clients. The firm is closely related to the NASDAQ-listed Bitdeer, which provides cloud hash rate services for Bitcoin miners.Prior to creating Matrixport and Bitdeer, Wu co-founded Bitcoin application-specific integrated circuit (ASIC) manufacturer Bitmain in 2013.
Bitcoin traders on the day the Bitcoin ETF is approved.
