Our weekly roundup of news from East Asia curates the industry’s most important developments.
Blowing up a Singaporean crypto hedge fund worth an estimated $10 billion at its peak was, by all means, a life-changing event for its co-founders Kyle Davies and Zhu Su. It appears that the trauma from the incident had been so severe that the two executives embarked on a series of spiritual journeys starting mid-2022 to transcend the effects of Three Arrows Capital’s (3AC) bankruptcy.
The voyage appears to have been fruitful. From escaping the pursuit of creditors, to making philosophical observations after witnessing the deaths of German tourists, to discovering the grace of Allah through Islam, to reigniting their passion for life through the culinary arts, to finding companionship in Japanese NFT avatars, Davies and Su may have finally found the answer to overcoming life’s hardships: If you don’t get it right the first time, keep trying until you succeed.
After reportedly soliciting $25 million from investors in January, the former 3AC co-founders launched the OPNX exchange on April 5. The exchange is designed to trade bankruptcy claims of fallen crypto entities, such as their own bankrupt hedge fund. It is unclear how the highly personalized and private nature of bankruptcy claims can allow them to be traded on a public exchange without prior approval from bankruptcy trustees or courts.
Nevertheless, Davies and Su decided to press forward with the idea anyway. On the first day of trading, the total trading volume on OPNX in the previous 24 hours was reportedly $1.26. The report drew swift condemnations from OPNX, which clarified that the exchange’s 24-hour trading volume was actually $13.64, or 982% more than stated.
Sun has stated that Huobi will “bear all leverage-through position losses on the platform resulted from this market volatility event of HT.” Huobi has stated that it seeks to “reach a consensus as soon as possible with the remaining users who still have doubts about the current solution and negotiate a more satisfactory solution.” However, the exchange also wrote it did not want such compensation to “encourage users to engage in high-risk leveraged transactions.”
Justin Sun’s troubled acquisition
According to purportedly leaked employee screenshots on April 4, Huobi Global plans to cut its staff count by a further 200, and the exchange is apparently not yet profitable. Last November, Sun reportedly acquired 100% of a co-founders’ stake in the exchange through his entity About Capital.
There have been issues ever since — but the exchange had issues before as well. Early this year, Huobi reportedly slashed its employee benefits and laid off as much as 20% of its staff. The exchange’s market share had fallen from an estimated 5.4% in the first quarter of 2022 to 2.2% in the final quarter. On April 5, Sundeniedthat he was in talks to sell his Huobi stake to Binance.
Huobi was one of the largest cryptocurrency exchanges in the world, holding 19% market share in 2020 before China’s crypto exchange ban took effect, and it had to say goodbye to much of its user base. Sun apparently has a plan to get around the ban as part of its turnaround. The proposed scheme involves leveraging Huobi’s digital identity partnership with the Caribbean island of Dominica. Mainland Chinese users can register for Dominica’s digital citizenship, then reportedly use their new “citizenship documents” to create a Huobi account.
Sun is currently facing a lawsuit from the United States Securities and Exchange Commission over allegations of market manipulation related to the Tron and BitTorrent tokens. Recent reports also indicate that Sun was stripped of his status as Grenada’s ambassador to the World Trade Organization last June, depriving him of the fancy title “his excellency” and access to a diplomatic passport that grants him theoretical immunity against prosecution.
Microsoft’s new blockchain partnerships
According to a recent announcement, Singaporean gaming studio Metagame Industries has joined the Microsoft for Startups Founders Hub through the ID@Azure Program. The partnership with Microsoft will explore the use of AI and cloud computing in Web3 game development.
Metagame Industries will receive Azure credits, OpenAI Services, technical support and business development resources as part of the agreement. “We’re excited to work with Microsoft’s tools and technology to create innovative and immersive gaming experiences,” said Joe Zu, CEO of Metagame Industries.