China NFT Weekly: A Bad Week for Crypto

Digestible news about the latest developments in Web3, NFT, Blockchain and Metaverse in China and beyond, curated 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.


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Tencent closes NFT Huanhe platform

Tencent is firing an undisclosed number of employees from its NFT buying and collecting platform Huanhe 幻核, with the ultimate intention of closing the company, according to people familiar with the matter. Caixin Global and Forkast first reported the story.

  • The news came amid tightened regulatory oversight of digital assets in China, with tech giants including Tencent and Ant Group signing a pact last month to halt secondary NFT trading.
  • Since its launch in August 2021, Huanhe has adapted its development strategy to avoid regulatory risks. Sales on the platform have slowed down since June and the company plans to roll out an international version of the NFT platform.
  • Meanwhile, Jingtan, an NFT platform operated by fintech giant Ant Group, has not issued any layoff announcements, 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 as blockchain technology became 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” presented by blockchain technology. (Forkast, Caixin Global)

READ MORE: Chinese tech giants pledge to end NFT speculation

Zipmex becomes the latest crypto exchange to block withdrawals

Singapore-based crypto exchange Zipmex has halted withdrawals and has become the latest company caught on the back of a series of standard errors 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 token trading below 40 cents, more than 90% down from its peak, the platform is facing serious financial difficulties due to trades with struggling cryptocurrency 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 key trading partners, in order to preserve the integrity of our platform, we would suspend withdrawals until ‘further notice,’ the company wrote on Twitter. the week.
  • “Our exposure to Celsius was minimal. As such, we planned to put it on our own balance sheet,” the company said in a separate statement on Thursday.
  • Zipmex would discuss the options with two companies. Earlier, the company’s Thai CEO appeared in a since-deleted YouTube video saying Zipmex was negotiating a possible 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 Monetary Head Says Crypto And DeFi Won’t Go Away

Eddie Yue, CEO of the Hong Kong Monetary Authority (HKMA), said a closer examination of stablecoins could help mitigate DeFi’s risks, but the technology, which aims to eliminate the need for intermediaries to borrow and invest. will continue to play an important role in the financial system. Reuters and CoinDesk first reported the story.

  • At a meeting of G20 financial officials, Yue called for greater scrutiny of the crypto industry to prevent another crash like the algorithmic stablecoin terraUSD (UST) and its companion token, LUNA, according to CoinDesk, citing a report from FinBold.
  • “Despite the Terra-Luna incident, I believe that crypto and DeFi will not disappear – although they may be slowed down – because the technology and business innovation behind these developments are likely to be important to our future financial system,” Yue said.
  • 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, HKMA released a statement indicating that it would continue to explore crypto technology with caution as it “strikes 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. say the stablecoin surge could potentially hurt Hong Kong’s local currency. (CoinDesk, Reuters)

Hong Kong launches first metaverse churches with avatars and virtual preachers

In February, Pastor Enoch Lam Yee-lok, Pastor from Hong Kong, launched Me Church, a church in the metaverse where people can virtually attend as avatars. SCMP reported the story first.

  • The pastor said this was done to provide a solution for worshipers who are inconvenienced by the Covid rules of the Special Administrative Region, as well as those who may find traditional services boring.
  • Lam, though in his sixties, is known for his unconventional preaching methods. In addition to launching the Metaverse project to target younger, more tech-savvy devotees, the Reverend also created So Gor (Brother Jesus), a comedy show to promote religion.
  • Lam also said Covid has shaken the attitude of older believers, who are now more used 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. One of the best-known churches worldwide is Life.Church, an American project that grew out of a network of physical churches.
  • A church in the metaverse could potentially provide a more direct and profound way to interact with the Bible, the pastor explained, using the story of Noah, who built an ark to prepare for a massive flood that no one would to expect. . “They (young people) won’t just sit and listen to you,” he said. “They’ll want to jump in and build Noah’s ark themselves.” (SCMP)

India’s finance minister backs central bank’s crypto ban and seeks international cooperation

Indian Finance Minister Nirmala Sitharaman reiterated the Reserve Bank of India’s (RBI) stance to ban crypto, but said significant international cooperation was needed to pass legislation. CoinDesk and TechCrunch reported the story first.

  • In a written statement in response to questions from Thirumaavalavan Thol, a Member of Parliament, the Finance Minister said: “RBI has recommended the development of legislation in this sector. RBI believes that cryptocurrencies should be banned,” she said.
  • “Cryptocurrencies are by definition borderless and require international cooperation to avoid regulatory arbitrage. Therefore, any regulatory or prohibitive legislation can only be effective after significant international cooperation in assessing risks and benefits and developing common taxonomy and standards,” she added.
  • The Financial Stability Board (FSB), a body of regulators, treasury officials and central bankers from the Group of 20 economies, including India, said earlier this month it would come up with “robust” global rules for cryptocurrencies in October this year. The FSB said crypto assets were primarily used for “speculative purposes” and not operated in an “unregulated space.”
  • Earlier this year, India switched 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 sector. (CoinDesk, TechCrunch)

Minecraft Developer Mojang Bans NFTs

Minecraft developer Mojang said on Wednesday it would ban 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 skinpacks and world files for people to buy.
  • The studio said it was possible for players to earn Minecraft NFTs for activities completed in-game or elsewhere, but Mojang disagrees.
  • The company further stated that creators may continue to use the game as a platform to create and sell NFTs, but the digital assets will not integrate with Minecraft client and server applications.
  • To ensure Minecraft players have a safe and inclusive experience, blockchain technologies should 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 whether this will enable more secure experiences or other practical and inclusive applications in games,” the company added. ready. “However, we currently have no plans to implement blockchain technology in Minecraft.” (Protocol, Yahoo Finance)

That’s it for this week’s newsletter – thanks for reading! As always, we welcome any feedback on how we can improve this newsletter. Write to us [email protected]. See you next week !

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