A Chinese worker has been fined 1.06 million Yuan ($144,907) for using a virtual private network (VPN) to access restricted websites while working remotely for a foreign employer. The individual, who remains unnamed, used the VPN to access GitHub, participate in customer support activities, conduct teleconferences, and post on Twitter. The City of Chengde Police deemed the income earned with the aid of the VPN as “proceeds of crime” and issued the penalty, equivalent to three years of the individual’s salary. Chinese law prohibits the use of VPNs to bypass the country’s “Great Firewall,” which blocks popular sites such as Google, Wikipedia, and Facebook. This ruling has raised concerns among the IT and Web3 communities in China, as VPNs are often used for similar remote work tasks.
In other news, the City of Hangzhou is airdropping 10 million digital yuan central bank digital currency (e-CNY) worth $1.37 million to incentivize food and beverage spending during the 19th Asian Games. The e-CNY airdrop can be redeemed through select food delivery platforms and offers reimbursement for up to 30% of the value of food items after purchase. The airdrop will renew every five days until the balance is emptied. Earlier this year, the City of Hangzhou launched a similar initiative, airdropping 4 million e-CNY worth $590,000, to promote the adoption of the central bank digital currency.
Hong Kong police have detained 15 individuals in connection with the collapse of cryptocurrency exchange JPEX, which is believed to be involved in the largest alleged Ponzi scheme in the city’s history. The Hong Kong Police received over 2,392 complaints, claiming a total loss of 1.5 billion Hong Kong dollars ($191.6 million) in the apparent scheme. As part of the investigation, police have seized 8 million HKD ($1 million) in cash and frozen bank accounts worth 77 million HKD ($10 million) suspected of being proceeds of crime. The Hong Kong Securities & Futures Commission (SFC) had previously warned about JPEX being an unlicensed exchange within its jurisdiction.
Hong Kong-based crypto exchange CoinEx has announced that it will resume services after falling victim to a $70 million wallet hack orchestrated by North Korea’s Lazarus Group. CoinEx claims to have resumed deposits and withdrawals on 190 cryptocurrencies and plans to gradually restore services for the remaining 500+ cryptos. The exchange updated the deposit addresses of all crypto assets as part of its new wallet system. Despite the hack, CoinEx stated that its cold wallets were not affected, and the CoinEx User Asset Security Foundation will bear the financial losses from the incident. Several security firms, including Elliptic, have attributed the hack to the Lazarus Group.
Chinese tech conglomerate Alibaba is planning to launch its own digital wallet service in partnership with crypto custodian Cobo. Alibaba’s Cloud subsidiary will integrate Cobo’s custodial wallet and multi-party computation technology into its enterprise wallet-as-a-service solution. This collaboration aims to set new standards in security, performance, and accessibility for the digital wallet infrastructure in the Web3 ecosystem. Cobo claims to hold partnerships with over 500 institutions and custody billions of digital assets through its wallet solutions. In June, Joe Tsai replaced Daniel Zhang as the chairman of Alibaba Group, signaling the company’s growing interest in the blockchain and crypto space.
Overall, these developments highlight the evolving landscape of digital technology and cryptocurrencies in East Asia. From the enforcement of strict VPN regulations to the promotion of central bank digital currencies and the challenges faced by crypto exchanges, East Asian countries are navigating the opportunities and risks associated with these emerging technologies. As companies like Alibaba continue to explore blockchain and crypto-related initiatives, the region is likely to remain at the forefront of technological innovations.
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