With each passing week, East Asia witnesses significant developments that shape the region’s technology and financial landscape. In this article, we will delve into four notable events that occurred recently. These events include the imposition of hefty fines for VPN usage, the airdropping of digital currency to boost local spending, the collapse of a cryptocurrency exchange in a suspected Ponzi scheme, and the launch of an enterprise wallet service by a prominent Chinese tech company. Let’s explore these developments in more detail.

Recently, an unnamed individual in China faced a staggering fine of 1.06 million yuan ($144,907) for utilizing a virtual private network (VPN) to access restricted websites as part of their remote work routine. This person had used a VPN to access platforms like GitHub, Zoom, and Twitter to carry out their consultancy duties. However, the city of Chengde Police deemed the income earned from such activities as “proceeds of crime,” resulting in the substantial penalty. It is worth noting that Chinese law strictly prohibits the use of VPNs to bypass the nation’s “Great Firewall.” This ruling has sent shockwaves throughout China’s IT and Web3 communities, as VPNs are commonly utilized for similar remote-work tasks.

To incentivize food and beverage spending during the upcoming 19th Asian Games, the city of Hangzhou in East China is airdropping 10 million digital yuan, equivalent to $1.37 million. This initiative allows anyone within the municipality, including locals and visitors, to receive the airdrop for use in designated food delivery platforms. Individuals can obtain up to three vouchers, reimbursing merchants in digital yuan for 20% to 30% of the value of their purchased food items. The airdrop is scheduled to renew every five days until the balance is depleted. While the vouchers have a validity period of five days, they can only be utilized through selected food delivery platforms. This move follows a previous airdrop by Hangzhou earlier this year, which aimed to foster the adoption of the central bank digital currency (CBDC).

The collapse of the Hong Kong-based cryptocurrency exchange JPEX has resulted in the detention of 15 individuals and attracted over 2,392 complaints, reporting a collective loss of 1.5 billion Hong Kong dollars ($191.6 million). This case is being investigated as a potential Ponzi scheme, making it one of the most financially devastating events of its kind in Hong Kong’s history. The Hong Kong Police have already seized HK$8 million ($1 million) in cash and frozen bank accounts worth HK$77 million ($10 million), suspecting them to be proceeds from this criminal activity. Before the investigation commenced, the Hong Kong Securities & Futures Commission had issued a warning regarding JPEX, as it was operating as an unlicensed exchange. The downfall of JPEX has underscored the importance of caution and due diligence in the cryptocurrency space.

Despite falling victim to a $70 million wallet hack orchestrated by North Korea’s notorious Lazarus Group, Hong Kong-based cryptocurrency exchange CoinEx has resumed its deposit and withdrawal services for 190 cryptocurrencies. In the wake of the hack, CoinEx updated the deposit addresses of all its assets to render the old addresses invalid. While the incident resulted in the loss of users’ cryptos, CoinEx affirmed that its cold wallets were unaffected, and the financial losses would be borne by the CoinEx User Asset Security Foundation. Notably, several blockchain security firms, including Elliptic, have pointed to North Korea’s Lazarus Group as the perpetrator behind the hack. In their efforts to recover the stolen funds, CoinEx has offered a substantial bounty.

Chinese tech giant Alibaba is venturing into the world of digital wallets through its Cloud subsidiary. The company has partnered with crypto custodian Cobo to develop an enterprise wallet-as-a-service solution, integrating crypto wallets into software using APIs and SDKs. The collaboration aims to set new standards in security, performance, and accessibility for the digital wallet infrastructure in the Web3 era. Cobo, with its custodial wallet and multi-party computation technology, is leveraging its partnerships with over 500 institutions and billions of digital assets under custody to build the Alibaba Cloud wallet. This move comes after Joe Tsai, a crypto-friendly executive, assumed the role of chairman at Alibaba Group.

The rapidly evolving East Asian technology and finance landscape has witnessed significant developments over the past week. From the imposition of VPN fines to digital currency airdrops, the collapse of a cryptocurrency exchange, and the launch of a new wallet service, each event has profound implications for the region and the broader industry. These developments serve as a reminder of the importance of navigating the ever-changing landscape with caution and vigilance.

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