Digestible news on the latest developments across the fields of Web3, NFTs, blockchain, and metaverse in China and beyond, compiled for you every week by Pandaily.
This week: Tencent halts sales on its NFT platform Huanhe amid regulatory scrutiny, Huobi founder to sell majority stake in the exchange at a $3 billion valuation, China shuts down 12,000 crypto-related social media accounts, and more.
Tencent Halts Sales on Its NFT Platform Huanhe Amid Regulatory Scrutiny
Chinese tech giant Tencent will halt sales of digital collectibles on its NFT market place Huanhe, the Shenzhen-based firm said on Tuesday, as domestic regulatory scrutiny of NFTs mounts. Reuters and CoinDesk first reported the story.
- Customers who own NFTs will still be able to hold, display or request a refund for the digital assets, the company said.
- Officially launched in early August of 2021, Huanhe is one of the biggest NFT platforms in China. The move marks a major retreat by Tencent from the NFT industry, which is facing increasing scrutiny from Chinese regulators.
- “Based on the company’s consideration to focus on its core strategy, Huanhe is making adjustments to its business,” Tencent said in a statement, as quoted by Reuters.
- Last year, China banned cryptocurrency trading and mining, a decision that left questions over the uncategorized NFT market because of its similarities to crypto. Shenzhen-based Tencent, whose businesses include the Weixin/WeChat messaging app as well as mobile news, games and payment systems, was forced to remove all references to NFTs on Huanhe last October after Chinese state entities warned that NFTs were being used for speculation. (Reuters, CoinDesk)
Huobi Founder to Sell Majority Stake at $3 Billion Valuation
Leon Li, the founder of Huobi Global, one of the world’s largest crypto exchanges, is in talks to sell a majority stake in the company in a deal that would value the firm at $3 billion or more. Bloomberg and CoinDesk first reported the story.
- The founder is looking to sell close to 60% of the firm, and has held preliminary talks with Justin Sun, founder of the Tron blockchain network, and FTX, the crypto exchange founded by billionaire Sam Bankman-Fried. However, Sun denied any involvement in the transaction.
- Existing backers including ZhenFund and Sequoia China were informed about Li’s decision during a July shareholders’ meeting, Bloomberg reported, citing sources familiar with the matter.
- A deal could be completed as early as the end of August. The founder is aiming for a valuation of $2-3 billion, meaning that a sale could fetch upwards of $1 billion. The deal would also be one of the biggest ever in the crypto industry.
- While the recent crypto market downturn has led many of the biggest firms in the industry to cut costs and lay off employees, the Huobi deal could be the first instance that one of those firms sells a majority stake.
- Seychelles-based Huobi is one of the world’s largest crypto exchanges, with a daily trading volume of over $1 billion, according to CoinDesk, citing data from CoinGecko.
- Huobi used to be one of the most active Bitcoin trading platforms in the world. However, in recent years, it stopped providing services to Chinese users after Beijing declared crypto-transactions illegal last year. The company has since accelerated its expansion into overseas markets including Turkey and Brazil. (Bloomberg, CoinDesk)
READ MORE: All of our previous stories on Huobi!
Bitcoin Mining Platform Moxian Divests Chinese Subsidiaries to Comply With Local Regulations
Moxian, a Nasdaq-listed company that provides bitcoin mining and related services in the United States, announced on August 15 that its wholly-owned subsidiary has transferred all equity interest of Moxian (Hong Kong) Limited to Liu Jiantao in light of the country’s ongoing crackdown on the gaming industry and increased oversight of data privacy. Pandaily first reported this story.
- Liu is an affiliate of Hao Qinghu, a former Director and Chairman of the company until his resignation from the Board of Directors in March 2022. Hao, who was appointed as a Director of the company in January 2016, had been instrumental in the establishment and operations of Moxian Hong Kong and its wholly-owned subsidiaries in China.
- The divestment of Moxian Hong Kong and its wholly-owned subsidiaries is not considered a significant transaction to the company, given that those entities had been operating at a loss since their inception and their carrying values in the consolidated financial statements in each of the last three fiscal years were not substantial. The mobile payment application business ceased in September 2018, while advertising income has fallen sharply in recent years.
- Since early March 2022, the company has operated bitcoin miners in New York and Georgia in the United States. With this divestment, it no longer conducts operations in China and is currently in the process of relocating its principal executive offices to the US.
- Forrest Deng, the Executive Director and Chief Executive Officer of the company, also expressed his optimism about the crypto industry. “Despite the recent fluctuation in bitcoin prices, we believe the longer-term outlook for crypto currencies remains positive. We will also seek other business development and investment opportunities as and when they arise,” Deng said. (Pandaily)
RELATED: Read the original article HERE!
Crypto Exchange Hotbit Suspends Customer Funds Due to Alleged Criminal Ties of Formal Employee
On Thursday, cryptocurrency exchange Hotbit said it had “suspended trading, deposit, withdrawal and funding functions,” with no timeframe for resumption. Cointelegraph and Blockworks first reported the story. Cointelegraph and Blockworks first reported the story.
- In explaining the decision, the company stated: “a former Hotbit management employee who left in April this year was, unbeknownst to Hotbit, involved in a project in 2021 that law enforcement authorities now think is suspected of violating criminal laws. As a result, a number of Hotbit senior managers have been subpoenaed by law enforcement since the end of July and are assisting in the investigation. Furthermore, law enforcement has frozen some funds of Hotbit, which has prevented Hotbit from running normally.”
- “The assets of all users are safe on Hotbit. Hotbit will resume normal service as soon as the assets are unfrozen. All user’s assets and data on Hotbit are secure and correct. However, we are still actively cooperating with the law enforcement authorities in their investigations and are continuously communicating with them through our lawyers and applying for the release of funds,” the company added.
- Hotbit didn’t mention which jurisdictional agency is investigating its managers, or the total value of the frozen funds, although it appears unlikely to be from the US.
- The company’s “About” page says it is registered in both Estonia and Hong Kong, while it’s based in Shanghai and Taipei. CB Insights lists Hotbit’s headquarters in Hong Kong while Crunchbase reports Beijing. (Cointelegraph, Blockworks)
China Shuts Down 12,000 Crypto-Related Social Media Accounts
China has shut down nearly 12,000 domestic social media accounts this year that promoted crypto investments, deleting 51,000 related posts and 105 websites offering crypto-related information, the Cyberspace Administration of China (CAC) announced on Tuesday. Forkast and SCMP first reported the story.
- Chinese authorities are targeting the promotion and online discussion of crypto, the country’s top internet regulatory body said, as Beijing continues to ramp up its crackdown on the industry.
- The CAC has ordered social media platforms to shut down 12,000 crypto-related accounts, including close to one thousand accounts that had been “guiding” internet users to invest in crypto” in the name of financial innovation and blockchain,” reported SCMP, citing an official statement by the CAC.
- The CAC said it would continue to suppress illegal financial activities related to cryptocurrencies in collaboration with other authorities.
- China was once the world’s biggest crypto mining hub, accounting for between 65% to 75% of the total “hash rate” – or processing power – of the bitcoin network. The country’s share of global bitcoin mining capacity plummeted to zero in July and August 2021, after authorities launched a fresh crackdown on crypto.
- However, recent research from the Cambridge Centre for Alternative Finance shows that Chinese bitcoin mining activity has quickly rebounded. By September 2021, the country made up just over 22% of the total bitcoin mining market.
- Despite continuing its stringent crackdown on crypto, Beijing is pledging support for the development of Web3, a loosely defined vision for a future decentralized World Wide Web built partially around blockchain technology. (Forkast, SCMP)
Paris Hilton Will Hold Parties in The Sandbox Metaverse
American businessperson and entertainment icon Paris Hilton announced this week that her company, 11:11 Media, will be launched in the virtual gaming world that is The Sandbox. CNBC first reported the story.
- In The Sandbox metaverse, Hilton will launch a virtual “land,” where she will interact with fans and sell digital goods. The Sandbox said in an official statement that she “is planning social and community events such as rooftop parties and glamorous social experiences in her virtual Malibu mansion.”
- “Snoop Dogg released his world in there, which is incredible, and I was so excited when I saw that,” Hilton said in an exclusive interview with CNBC. “I’m really excited to bring Paris world all over – we’re going to be working with a couple other platforms.”
- “Right now we’re mostly focusing on the experiences and not the monetization because that’s just not the focus right now,” Hilton said. “But we are going to be doing digital wearables and working with different brands and there’s a lot of exciting projects I can’t announce yet.” (CNBC)
That’s it for this week’s newsletter – thanks for reading! As always, we welcome any feedback on how to make this newsletter better. Write to us at [email protected]. See you again next week!