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Asic examines collapsed bitcoin company Blockchain Global after Guardian investigation

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Australia’s corporate regulator will examine details of the collapsed bitcoin company Blockchain Global after a Guardian Australia investigation revealed links between two of its directors and a series of failed crypto investment schemes.

Blockchain Global collapsed in 2021 owing creditors $58m, with the liquidator referring its directors – Allan Guo, Sam Lee and Ryan Xu – to the Australian Securities and Investment Commission for potential breaches of the Corporations Act. This included possible breaches of director’s duties, breaches of trust and unreasonable director-related transactions.

Asic initially advised liquidators Pitcher Partners that it did not intend to take action after it received the first report on the company’s activities in March 2022.

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But after a Guardian Australia investigation into the HyperVerse crypto investment scheme, which has links to Lee and Xu, Asic has begun an examination of the liquidator’s report. A final version was filed to Asic in October.

An Asic spokesperson told Guardian Australia: “Asic confirms that it is assessing reports from the liquidator in relation to BGL.”

Guardian Australia has revealed widespread losses to the HyperVerse investment scheme, which escaped regulator attention in Australia despite being flagged by authorities overseas – by one as a possible “scam” and another as a “suspected pyramid scheme”.

Court documents filed in January in the US against Bitcoin Rodney, a senior US promoter of HyperFund and HyperVerse, allege the scheme operated with a network or promoters making “fraudulent promotional presentations” to investors and potential investors. He has been charged with operating and conspiring to operate an unlicensed money transmitting business.

An affidavit filed by the US internal revenue service alleges that early investors were “paid with funds collected from more recent investors”, and the company’s claimed revenue-generating bitcoin mining operations did not exist. There is no mention of Xu or Lee in the court documents filed by authorities in that case.

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Lee has denied being behind HyperVerse, saying his involvement was limited to technology provision and the funds management side of the organisation. Both Lee and Xu appeared in the HyperVerse global launch event in 2021, alongside a fake chief executive officer called Stephen Reece Lewis. Xu and Lee also both featured prominently in promotional material for the schemes that preceded HyperVerse, known as HyperFund and HyperCapital.

Reece Lewis has since been revealed by the Guardian to be the British man Stephen Harrison, who said he was hired for a short period via a talent agent to play a “corporate presenter” and that he had no role in the actual business.

Lee relocated to Dubai in 2021, while the whereabouts of Xu is unknown. Guo is not involved in the Hyper group schemes.

The US-based crypto analysis firm Chainalysis estimates losses to HyperVerse in 2022 amounted to US$1.3bn (A$1.97bn).

The move by Asic to examine the Blockchain Global collapse comes as the liquidator also reveals a possible link in the company’s records to the operation of HCash, which was a cryptocurrency linked to the Hyper investment schemes.

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“The liquidators have identified two debt transactions totalling $500,000 in Blockchain Global’s main bank account [linked to HCash]. These transactions both occur on 5 August 2019,” Pitcher Partner’s liquidator Andrew Yeo told Guardian Australia.

“It is not clear whether the funds were used for this intended purpose.”

Rewards that were accumulated through the earlier Hyper schemes were converted to HCash before they could be converted to other cryptocurrencies.

According to a “HyperTech group organisational chart”, HCash was one of three Australian companies behind the Hyper investment schemes, in alliance with Blockchain Global, Collinstar Capital and the HCash Foundation.

According to the HyperTech group’s promotional material, Collinstar Capital, Blockchain Global and HCash were a “multi billion dollar group of companies”.

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The HCash official Telegram group confirmed its association with HyperTech and HyperCapital in 2019, saying it was “allied with the HyperTech group”.

Asic documents show that HCash Tech Pty Ltd was owned by Xu and Jianbo “Jacob” Cheng and was established in 2017. An application for it to be deregistered was made in May 2023.

Collinstar Capital was owned by Xu until mid 2022, after which it was taken over by Cheng.

Asic documents reveal shares of the company’s 40 founders were transferred from Xu to Cheng for $5.50, while 200,000 noncumulative preference shares were transferred at no cost, with a value of $125,000 listed as unpaid.

Cheng did not respond to questions from Guardian Australia.

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Lee did not respond to questions from Guardian Australia before the publication of a previous article about his involvement in the establishment and operation of HyperFund and HyperVerse. He has previously denied the schemes are a scam.

In a WhatsApp message after the article was published he alleged it included “misstatements” about his role in running the Hyper schemes but did not respond when asked what they were. He also claimed that “people on the internet continues [sic] to make things up”.

Lee has also not responded to questions from Guardian Australia about the liquidators’ findings in relation to Blockchain Global.

 

Source: The Guardian

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Blockchain

Digital Currency Initiative Launches in Taiwan by Collaborating with Prestigious University

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In an innovative effort to revolutionize digital financial education, a prominent digital currency provider has teamed up with a renowned university in Taiwan. This strategic collaboration aims to equip students with advanced knowledge and practical experience, preparing them for the future of finance.

Empowering Future Financial Professional

The partnership focuses on immersing students in the complex world of digital assets, blockchain technology, and cutting-edge financial instruments. Industry experts will offer invaluable insights and mentorship, enhancing students’ understanding and skills in this rapidly evolving field.

Curriculum Highlights:

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  • Blockchain Principles: Foundational knowledge of blockchain technology.
  • Critical Thinking: Developing analytical skills for problem-solving in digital finance.
  • Risk Assessment: Strategies for identifying and managing financial risks.
  • Legal Compliance: Understanding the regulatory landscape and compliance requirements.
  • Career Insights: Exploring potential career paths in the digital finance industry.

Commitment to Digital Economy Growth

This initiative underscores a commitment to fostering the digital economy’s growth by highlighting the stability of digital assets against traditional currencies. The newly introduced digital token combines traditional asset stability with blockchain security, offering a robust financial instrument for the future.

The digital currency provider has a long-standing history of promoting blockchain education and advocating for financial inclusivity. By facilitating cross-border transactions and investing in emerging markets, the organization continues to play a crucial role in shaping digital finance’s future.

Advancing Financial Literacy and Inclusivity

This collaborative effort represents a significant step towards democratizing financial literacy and empowering individuals worldwide to engage with the evolving digital currency landscape.

Additional Facts:

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  • Taiwan’s Blockchain Hub: Taiwan actively promotes itself as a hub for blockchain and digital currency innovation through various initiatives.
  • Research and Development: The partnership is expected to spur increased R&D activities in digital assets, benefiting both academia and industry.
  • Regulatory Exploration: Taiwan’s government is interested in exploring regulatory frameworks for digital currencies and blockchain technology, creating a supportive environment for such collaborations.

Key Questions Addressed

  1. Impact on Adoption: How will the collaboration between the digital currency provider and the university impact the adoption of digital currencies in Taiwan?
  2. Skills and Knowledge: What specific skills and knowledge will students gain from the curriculum focusing on blockchain technology and digital assets?
  3. Regulatory Compliance: How does the initiative address potential regulatory challenges and compliance issues in the digital currency space?

Advantages and Disadvantages

Advantages:

  • Enhanced Education: Offering students unique educational opportunities in digital finance and blockchain technology.
  • Industry-Academia Bridge: Providing hands-on experience and mentorship to bridge the gap between academia and industry.
  • Economic Growth: Contributing to the growth and development of the digital economy in Taiwan and beyond.

Disadvantages:

  • Curriculum Updates: Potential challenges in keeping the curriculum up-to-date with the rapidly evolving digital currency landscape.
  • Practical Exposure: Ensuring students receive practical, real-world experience to complement theoretical knowledge.
  • Regulatory Balance: Balancing the promotion of digital currencies with the need for regulatory compliance and risk management.

The collaboration between the digital currency provider and the Taiwanese university marks a significant milestone in digital financial education. By integrating industry expertise with academic rigor, this partnership aims to nurture the next generation of financial professionals and foster the growth of the digital economy.

Source: smartphonemagazine.com

The post Digital Currency Initiative Launches in Taiwan by Collaborating with Prestigious University appeared first on HIPTHER Alerts.

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Binance Appeals Against $4.3M Penalty Imposed by Canada Regulator

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In a recent court appeal, Binance argued that it does not specifically target Canadian customers, claiming its activity in Canada is merely a byproduct of its international operations, according to a June 19 report by the Canadian Press. The exchange revealed that although it had previously attempted to establish a Canadian presence, these plans were abandoned. By May 2023, Binance had fully exited the Canadian market, citing new regulations on stablecoins and investor restrictions that made continued operations unfeasible. Despite its departure, Binance acknowledged the sentimental value of Canada, being the home country of its founder.

In May, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) imposed a $4.3 million fine on Binance for non-compliance with anti-money laundering (AML) and terrorist financing rules. FINTRAC claimed that between June 2021 and July 2023, Binance failed to report over 5,000 transactions of $10,000 or more. Additionally, despite having multiple opportunities, Binance failed to register as a money services business within the deadlines set by the regulator.

Beyond its issues in Canada, Binance is facing a multitude of legal challenges globally. In April, a class-action lawsuit was filed against the exchange in Canada, accusing it of violating securities laws. The plaintiffs allege that Binance sold crypto derivative products to everyday investors without proper registration, breaching Ontario’s Securities Act and federal regulations. This lawsuit, representing tens of thousands of Canadian investors, seeks compensation and the reversal of unauthorized trades.

Globally, Binance has also faced significant financial penalties. In November, the exchange settled with US authorities, agreeing to a $4 billion fine for violations of anti-money laundering and sanctions laws. Similarly, the Indian Financial Intelligence Unit imposed a $2.24 million fine, the largest ever against a crypto entity in the country, for failing to comply with AML regulations.

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Binance’s regulatory and legal troubles illustrate the significant challenges faced by cryptocurrency exchanges operating across multiple jurisdictions. While the exchange continues to navigate these complexities, its ability to comply with global regulatory standards and address legal disputes will be critical to its long-term viability and reputation in the market.

Source: cryptonews.com

The post Binance Appeals Against $4.3M Penalty Imposed by Canada Regulator appeared first on HIPTHER Alerts.

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Binance.US Dealt Another Blow: North Dakota Revokes License

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Following the lead of states like Florida, Alaska, Oregon, Maine, and North Carolina, North Dakota has moved to block Binance.US from regaining its money transmitter license. This decision by the North Dakota Department of Financial Institutions (DFI) is grounded in a November 2023 guilty plea by Binance founder Changpeng Zhao on anti-money laundering charges, further questioning the exchange’s suitability for operation.

Protecting Public Interest

DFI Commissioner Lise Kruse emphasized the need to protect the public interest in her statement: “The Commissioner finds the Respondent does not continue to meet the qualifications or satisfy requirements that may apply to an applicant for a new money transmitter license.” This decision adds North Dakota to the growing list of states placing Binance.US in regulatory “penalty boxes.”

Global Troubles and US Regulatory Concerns

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The regulatory issues faced by Binance.US in the United States reflect broader global challenges. For instance, a recent regulatory conflict in Nigeria, which resulted in the detention of a Binance executive, raises additional concerns for US regulators, complicating Binance.US’s situation further.

Impact and Outlook for Binance.US

Currently, Binance.US is unable to onboard new users in several regions and is entirely inaccessible in over 10 states. The exchange has until July 17, 2024, to challenge North Dakota’s decision. However, the outlook remains uncertain, given the mounting restrictions and regulatory pressures.

The relatively short prison sentence for Zhao might suggest a potential course correction within Binance. By prioritizing user safety and adhering strictly to US regulations, Binance.US could potentially regain some lost ground. The exchange’s future hinges on its ability to address regulatory compliance issues effectively.

The Broader Implications

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This regulatory crackdown highlights the evolving landscape of cryptocurrency regulation. While the innovative potential of cryptocurrencies is significant, exchanges must operate within established regulatory frameworks to maintain trust and stability in the market. Binance.US’s struggle will be closely watched by the entire cryptocurrency industry, serving as a cautionary tale for exchanges that prioritize growth over compliance.

Source: bitcoinist.com

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