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UN Agency Employs Blockchain to Protect Migrant Workers in Hong Kong From Illegal Fees

The International Organization for Migration (IOM)—the United Nations Migration Agency—has announced the launch of a blockchain-based tool designed to prevent migrant domestic workers in Hong Kong from exploitation. The tool was developed in collaboration with Diginex, a blockchain technology company specializing in financial services.

On Dec. 16, in a release published on their page, Diginex announced the new tool called IRIS-SAFER, which is an acronym for the International Recruitment Integrity System (IRIS)- Self-Assessment for Ethical Recruitment (SAFER). It is being developed predominantly to be utilized by the approximately 1,500 Hong Kong-based migrant domestic worker recruitment agencies as well as select associated agencies in worker-sending countries.

Agencies will be assessed on their current level of adherence to global ethical recruitment principles as set forth by the IRIS Standard and will do so as a part of their participation in broader training on ethical recruitment.

According to the Hong Kong Census and Statistics Department, there are almost 390,000 migrant domestic workers in Hong Kong, which is almost 10% of the working population. Almost all (98%) of these domestic workers are women. Alarmingly, a new survey indicates that more than half (56%) of domestic migrant workers were charged illegal fees by agencies.

Mr. Mark Blick, Head of Government Solutions at Diginex, said, “In Hong Kong, foreign domestic workers are some of the most economically vulnerable people in our society and pay approximately HK$700,000,000 each year in placement/recruitment fees. Being headquartered in Hong Kong, we believe it is vital to support the communities in which we operate, so this partnership and project is close to our hearts.”

The use of blockchain technology – essentially a set of immutable, secure, data records – will strengthen data management and enforce data integrity, which allows for a higher level of transparency and visibility.

Following the successful rollout of this tool in Hong Kong Diginex and IOM plan to roll out IRIS-SAFER to recruitment agencies in other jurisdictions globally.

Image Via Shutterstock

Hong Kong Police Crackdowns Crypto Investment Scam, involving $11M HKD

Hong Kong police announced Friday the authority has dismantled a cryptocurrency investment scam involving at least 11 million Hong Kong dollars. At least 19 people are under arrest.

According to the local authority, the group deceived victims’ money by enticing the public to invest in cryptocurrencies as early as last year. On August 18 and 19, the police arrested at least 19 suspects, including eleven men and eight women, consisting of the scam group in charge, information technology personnel and facilitators.

Suspects aged 18 to 31 years old are accused and involved in the charges of “conspiracy to defraud.”

Local media reported the scam group deceived the confidence of victims by displaying yachts, luxury cars, and cash on various social media platforms to pretend to be rich people, followed by asking victims to deposit their money by investing in cryptocurrencies mainly into Tether (USDT). As a result, victims are deceived by transferring their money on a fake cryptocurrency platform and fail to get the money back.

The police said the fraud involved in the first quarter of this year alone reached 11 million. More than 170 people were defrauded, and the largest amount of temporary losses involved was 760,000 HK dollars.

The investigation is undergoing. The authority said victims come from various regions, including mainland China, UK and Taiwan; those confiscated items included nine computers, 128 smartphones, $1.4 million hong kong dollars in cash, cryptocurrency worth about 50,000 HKD, and a sports car related to the case.

Virtual Assets Investment Opens Opportunity to H.K. Residents, While Adrian Cheng Invests in Sandbox

As residents in Hong Kong struggle to purchase physical property due to high housing prices, The Sandbox’s virtual assets could be a lucrative investment opportunity for many.

The Hong Kong-based billionaire and property tycoon Adrian Cheng Chi-kong, son of Henry Cheng Kar-shun, has announced his addition of virtual real estate to his portfolio of investments via The Sandbox has led the way for giant investors and the general public to establish a foothold in this new world.

Adrian Cheng, who also is the CEO and executive vice-chairman of New World Development, said:

“I’m excited to enter the metaverse through The Sandbox. Providing platforms for the next generation to be empowered to create, innovate and feel part of something that’s paving the way for the future is critical to progress; The digital world is constantly evolving and we need to stay at the forefront of these changes by continuously exploring and developing the metaverse.”

The Sandbox is a leading decentralised gaming virtual world and subsidiary of Animoca Brands, where users can buy virtual real-estate, called LAND NFTs (non-fungible tokens), in the open metaverse.

Metaverse also become a trending issue recently. It refers to a shared virtual world where users can socialise, play games, live as an avatar and try out the latest fashion from their couch. Users buy these virtual items using cryptocurrency that are backed by NFTs or other digital assets.

In the Sandbox, investors can also buy properties and develop their assets much like in the real world where users can buy their games and items from. The Sandbox has also been fueling the recent growth of virtual real-estate demand having partnered with major IPs and brands.

Speaking through a statement from Cheng’s office, Adrian’s LAND will be one of the biggest plots in The Sandbox. His plot will also form part of the ‘Mega City’ virtual world, which will include Adrian’s Innovation Hub, where successful start-ups that he personally supported from the Greater Bay Area (GBA) in China Guangdong Province, will have a space to sell their products via the GBA Pavilion.

GBA start-ups to be featured in Adrian’s Innovation Hub include Aesir, Casetify, Lalamove, DayDayCook, Prenetics, Raspect, Rice Robotics, Rooftop Republic, Undone and V Cycle.

The statement also said that the GBA Pavilion will inspire and encourage entrepreneurs and the featured companies will offer entertainment, exclusive NFTs and immersive experiences.

Yat Siu, co-founder and executive chairman of Animoca Brands, commented: “Adrian is one of the most influential leaders in business, real estate, arts and culture in Hong Kong and the region, and we are thrilled that he is joining The Sandbox to bring his unique perspective and to help add and shape new transformative experiences to the open metaverse.”

An alternative way to invest in property

Costly housing price has become a challenging issue among the local Hong Kong residents, compared to other major countries and regions worldwide. Although prices slipped 0.4 per cent to 396.3 in September, according to an index by the Rating and Valuation Department, for many residents investing in property is still sky-high. Owning property has been described as a mission impossible. In light of that situation, virtual assets have propped up for many to explore.

In this new opportunity, Hong Kong residents can create immersive 3D worlds and game experiences and safely store, trade, and monetize their creations in The Sandbox Metaverse’s decentralized and intuitive platform.

Currently, around a third of Hong Kong residents have invested in, or used, cryptocurrency as a medium of exchange, the second-highest engagement with the new asset class among developed markets surveyed by credit card company Visa, according to local media South China Morning Post reported.

CSOP to List First Metaverse Concept ETF on HKEX

CSOP Asset Management Limited (CSOP) is set to launch Hong Kong’s first Metaverse exchange-traded fund (ETF) next Monday, February 21, according to the company’s disclosure document.

The CSOP Metaverse Concept ETF with a stock ticker 3034. On Monday, H.K. will be expected to list on the Hong Kong Stock Exchange (HKEX).

The Metaverse ETF will mainly invest in the New York Stock Exchange, or the Nasdaq listed or traded on U.S. over-the-counter markets firms that are involved in the Metaverse business with listing price at around HK$7.8 per unit, trading lot of 100 shares and annual management fee of 0.99%.

The portfolio’s top 10 holdings cover various tech companies, including tech giants Meta, Apple, Sony Group, Tencent Holdings, and Roblox, and chipmakers Nvidia and Qualcomm, according to CSOP. The company’s document disclosed that the Metaverse ETF has already received around US$9 million in initial investment.

At present, only six metaverse-related ETFs have been issued, two in the U.S. and four in South Korea.

CSOP said it provides opportunities to global investors in the most cutting-edge area efficiently and transparently as the fund focuses on four key areas — metaverse infrastructure, construction technology, applications and content.

Melody He, Deputy CEO, said that the company is “optimistic about future thematic investments, adding CSOP Metaverse Concept ETF will fulfil investors’ investment needs.”

“The Metaverse represents the beginning of a brand new era, in which a parallel new world will be created. As the latest and one of the most important members of the CSOP thematic ETF series, CSOP Metaverse Concept ETF is our bold attempt at something new and futuristic, providing our investors with state-of-the-art investment opportunities,”

Currently, Metaverse has become a trending topic in the technology sector as it is being speculated to become the next version of the Internet. The trend has led to heavy investments from technology giants into the Metaverse industry.

In its current version, Metaverse is being referred to as shared three-dimensional (“3D”) virtual worlds that enable highly immersive virtual collaborations and interactions between large volumes of concurrent users.

CSOP, founded in 2008, is an offshore asset manager set up by a regulated asset management company in China and is also popularly known as an ETF leader in Asia.

CSOP manages both public and private funds as well as provides investment advisory services to Asian and global investors. As of December 31 2021, CSOP has more than US$11 billion in assets under management.

Morgan Stanley predicts the value of the Metaverse could reach a market value of US$8 trillion in China alone.

HK-based Ucollex Raises $10M in Funding, Led by Animoca Brands

Hong Kong-based non-fungible token (NFT) platform Ucollex closed a $10 million Series A funding round led by Animoca Brands and the MCP IPX One Fund from Japanese investment firm MCP Asset Management.

However, the company’s valuation has not been revealed.

The NFT platform focuses on art and pop culture collectables such as artist interviews, 3D art, and virtual experiences without requiring buyers to own a digital wallet.

Among Uncollex’s major success stories, it partnered with crypto exchange Binance to support the first NFT launch from luxury fashion brand Jimmy Choo last autumn.

According to Ucollex board member Roberto Grande, the latest capital will be invested in scaling operations, including platform and blockchain tech development, while also focusing on driving marketing efforts related to significant intellectual property (IP) partnerships.

Ucollex CEO Robert Tran said that ‘Collectortainment’ will be the company’s key offering “as we look to bridge the existing global fandom for pop culture collectables into the new paradigm of blockchain ownership and utility.”

Tran added that anime, toy, and pop culture illustrators will be Ucollex’s major focus for 2022 as “we believe these digital collectables are shaping the new consumer spending in a very impactful way.”

Animoca Brands co-founder and Executive Chairman Yat Siu said that “we are pleased to lead this investment, which we believe will make it easier for intellectual properties to participate in the open metaverse.”

Hong Kong-based Animoca Brands has invested in over 150 NFT-related firms and decentralized products, including Dapper Labs and Sky Mavis.

According to January 19, 2022, report by Blockchain.News, Animoca Brands raised $358.88 million from investors led by Liberty City Ventures.

The report added that with the firm now valued at $5 billion, the startup had notably doubled its value from October when it was worth $2.2 billion atop a $65 million funding.

HK Outlines Regulatory System for Virtual Asset Sector

The Hong Kong government is working to establish a regulatory system for the virtual asset industry, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu wrote in his blog.

In a letter to the virtual asset industry forerunners, Hui said that key measures include a licensing regime for the virtual asset service providers, contemplating the regulation of payment-related stablecoins. In addition, to provide traditional financial institutions with guidelines on offering virtual asset-related services to clients.

The government and financial regulators rolled out these measures to build a systematic development and operation of the virtual asset sector and tackle money laundering risks, he said. Also, these measures aim to “build up market confidence, and hence provide a pathway to its sustainable development.”

Following the new requirement introduced by the Financial Action Task Force, licensing regime for virtual asset service providers will be established as a regulatory measure, he said. Therefore, virtual asset exchanges will have to apply for a licence from the Securities and Futures Commission (SFC) before providing services in the city under the proposed licensing regime.

Both securities-type virtual assets and non-securities virtual assets such as Bitcoin are subject to the licensing regime.

Hui noted that these regulatory actions are being taken to create a fair balance in requirements and obligations between virtual assets and traditional financial institutions in areas such as anti-money laundering and counter-terrorist financing as well as investor protection.

Due to the technology-driven nature of virtual asset trading, requirements to address potential risks such as system failures and cyber security will also be imposed, he added.

Stablecoins regulatory regime in HK

According to Hui, plans are still under construction to introduce a regulatory regime for stablecoins.

“We are also contemplating the need to introduce another regulatory regime for ‘stablecoins’ as the nature of this particular type of virtual asset makes it more likely to be used for payment purposes, and hence may pose risks different from those associated with other virtual assets, such as whether there is a robust mechanism for supporting its value or the impact on real economic activities in case of disruption of its payment function.”

The blog also highlighted that financial regulators had issued guidelines and regulatory advice on virtual asset-related matters.

A circular issued by the SFC and the Hong Kong Monetary Authority in January 2022 has set out regulatory guidelines for traditional financial intermediaries and banks to follow when distributing virtual asset-related products, providing virtual asset dealing services, and providing virtual asset advisory services to clients.

Hong Kong Experienced Crypto Break Out Year in 2021: Gemini Report

Hong Kong experienced a break out year for crypto investing in 2021 and currently, the city has a 24% adoption rate in crypto investors, according to a report by global cryptocurrency exchange Gemini.

The Global State of Crypto Report surveyed almost 30,000 adults across 20 countries and territories. The findings reported that more than half of crypto owners in Hong Kong, or 51%, started investing in crypto last year.

The Gemini report stated, “In 2021, (the) cryptocurrency reached a tipping point, evolving from what many considered a niche investment into a global, established asset class.”

While 37% or more than one-third of crypto owners in Hong Kong are women, the percentage is higher than in the United States (32%) and the United Kingdom (35%); however, 51% or more than half of crypto owners in Indonesia are women.

Including Hong Kong, these 20 economies that were surveyed were nations with developed and developing economies levels, and several Asia Pacific region (APAC) markets are leaders in cryptocurrency adoption.

Indonesia’s overall adoption rank was highest, with more than two in five (41%) in the country holding cryptocurrency despite warnings from the Financial Services Authority (OJK) on the market volatility of crypto and a decision by Majelis Ulama Indonesia (MUI) that cryptocurrency was not permissible under Islamic law.

For the primary driver of adopting crypto in APAC, the report mentioned that inflation is one of the key reasons to deal with, such as in Indonesia.

Although crypto adoption in Hong Kong has remained positive, there have been barriers to these investments.

According to the report, fear of losing funds through bad investments and security are top barriers to crypto adoption in the APAC. While in Hong Kong, 41% of investors were worried about price volatility, and 54% stated concerns about security as a barrier.

In addition, Hong Kong also shares similar concerns with Singapore regarding crypto being used as investments by retail investors. Without a clear clarity or positioning of crypto, that might not help both places to develop crypto business, despite both sides “have expressed a willingness to deliberate over-regulation and to provide greater clarity for crypto business,” according to the report.

In terms of crypto as means of diversifying assets, 46% or nearly half of the crypto owners in Hong Kong held the viewpoint.

According to the report, 79% of crypto investors globally accept crypto as a buy and hold long-term investment, and the APAC saw 82%. Among the APAC nations, 76% of investors in Hong Kong have their crypto investments for the long term.

The clarity in Hong Kong’s crypto regulation is yet to be provided for businesses as the city has been cautious about cryptocurrency being used as investments by retail investors. However, the report stated that the openness to cryptocurrency shown by regulators in Hong Kong predicts a higher rate of cryptocurrency adoption than in Europe.

HK's Ex-Financial Secretary Joins Digital Wealth Manager StashAway as Advisor

Hong Kong’s former financial secretary has become an advisor of a Singapore-based digital wealth firm and has planned to give away a portion of his soon-to-be issued non-fungible tokens (NFTs) to attract new clients, according to a report by Bloomberg.

John Tsang, who spent more than three decades in Hong Kong’s civil service, said that following his departure from the government, he became interested in working with young people and firms with technology platforms that have the potential to “disrupt” a particular industry.

StashAway – Tsang’s new employer – was founded in 2016 and has more than $1 billion in assets under management and is backed by investors including Sequoia Capital.

In Hong Kong, StashAway has been in operation for only a year but is in talks with local regulators on offering crypto-related products to professional and retail investors.

Currently, there are bout 15 people working for StashAway in Hong Kong. The company has plans to hire more wealth advisers and for customer service.

While in Singapore, StashAway users can already buy crypto as an add-on product to traditional portfolios.

The 70-year-old former financial officer once ran election for the Chief Executive of Hong Kong in 2017 but was defeated by current Chief Executive Carrie Lam.

Tsang also announced the launch of his NFT project on April 4 as part of his effort to contribute to Hong Kong’s startups.

He said that the NFT project was created in collaboration with Japanese illustrator Yosuke Yamauchi and the two have launched a collection of 3,000 “Choi Yeah” (“God of Fortune”) NFTs.

He said, “The world has changed so much in the past few years. Troubles of varying nature in our communities are causes for concern for all of us as we unwittingly enter the new Web 3.0 universe! This ‘Choi Yeah NFT’ project will dedicate 10% of the secondary trading transaction proceeds to support Hong Kong tech startups.”

Tsang will gift some of the NFTs from the collection to new StashAway clients, Bloomberg reported. However, in order to win the NFTs, clients will have to make an investment of at least HK$50,000 in their first deposit.

Apart from his current position, Tsang is also a senior adviser at virtual insurance firm Bowtie.

According to Bloomberg, many wealthy investors have shown interest in the crypto sector.

Citing a report from Campden Wealth, Bloomberg said that 35% of family offices in Asia-Pacific plan on increasing their allocation to cryptocurrency in the coming year – which is higher than the global average of 28%.

It added that the Hong Kong Monetary Authority is working on releasing a new regulatory regime for crypto assets by July.

“We’ve had a lot of requests about it, especially because a lot of our investors are younger,” Stephanie Leung, a former Goldman Sachs Group Inc. trader who heads the firm’s Hong Kong operations, told Bloomberg. “If you look at the older cohorts, they are also interested because of the returns.”

Image source: HKSAR government

Hong Kong's MaiCapital Wins SFC Approval to Fully Manage Virtual Asset Portfolios

Hong Kong-based MaiCapital Limited announced Tuesday that it has secured approval from the local Securities and Futures Commission (SFC) to fully manage virtual assets portfolios.

In its announcement, MaiCapital said the approval allows the SFC-licensed blockchain and virtual assets manager the authority to manage portfolios that may comprise up to 100% of virtual assets.

Prior to securing the approval, MaiCapital operated with the SFC’s Type 4 and Type 9 licenses since 2018. The licenses allowed the company to advise on securities and grant permission to act as an asset manager respectively- through which MaiCapital has been operating two actively managed blockchain-themed hedge funds which have achieved more than 20 times growth in total AUM since 2019.

Along with the approval, MaiCapital was also able to secure Walthking Investment as an investor and shareholder of the MaiCapital group.

Looking ahead, MaiCapital plans to widen its services of virtual asset fund products and regulated crypto services to investors globally, while also aiming to grow its intentional business to over US$200 million.

“With the extended approval from SFC, MaiCapital is on an even greater trajectory to bring more innovative investment products and services to professional and institutional investors. Wealthking firmly believes in the development potential of Blockchain technology plus digital economy and has invested heavily in these areas for the past few years,” Liu Zhiwei, Chairman of Wealthking, said.

“The next step will be to optimally utilize our strengths to help MaiCapital reach greater heights.”

MaiCapital claims that its Blockchain Opportunity Fund is the first virtual asset-themed fund managed by an SFC-licensed manager to garner more than 3 years of track record.

The company has also said that it only partners with regulated exchanges and custodians in the management of its blockchain-themed funds.

“MaiCapital has always prided itself in its ability to invest in the nascent cryptocurrency asset class with the highest compliance standards and an unyielding focus to protect the interests of investors,” said MaiCapital’s CEO, Benedict Ho.

FinTech Association of Hong Kong Supports HKMA's Risk-Based Approach to Regulate Stablecoins

The FinTech Association of Hong Kong (FTAHK) has published a response to the Hong Kong Monetary Authority’s (HKMA) January discussion paper on crypto assets and stablecoins.

The FTAHK said that it is in principle supportive of the HKMA’s proposed risk-based approach to regulating payment-related stablecoins.

In January, Blockchain.News reported that in order to make its stance known about stablecoins, the HKMA published a discussion paper in which it solicited the public’s contributions to its proposed regulatory approach to digital currencies and stablecoins in particular.

The report added, as per the published paper, the HKMA acknowledged the steady growth in the market capitalization of stablecoins which is pegged close to $150 billion, up significantly from less than $20 billion back in January 2020.

In response, the FTAHK has made recommendations to the HKMA.

It suggested the HKMA adopt a “substance (or function) over form” approach when considering whether such stablecoins should be regulated under existing or equivalent licensing regimes.

The FTAHK has also recommended that the HKMA’s proposed regime regulates “primary activities” rather than “secondary activities”.

The “primary activities” include the issuance, creation, or destruction of payment-related stablecoins, or activities that are linked to the management of stabilization activities in relation to stablecoin value.

The FTAHK has also suggested that the HKMA continue working with global and local crypto-related regulators and standard-setting bodies to create a coordinated regulatory regime consistent with global standards.

It said that creating a coordinated regulatory regime will help avoid overlap and confusion and to prevent regulatory arbitrage while protecting stablecoin users and financial stability.

FTAHK has over 1,100 members representing 300 plus firms and is the largest FinTech association in Hong Kong.

While in October 2021, the HKMA had published a Technical Whitepaper to discuss the possibility of the digital Hong Kong Dollars (e-HKD) issue as part of its efforts to come up with an initial view regarding the prospects of its proposed Central Bank Digital Currency (CBDC) by the middle of 2022.

Blockchain.News reported that the Whitepaper is part of the central bank institution’s projected “Fintech 2025” strategy, highlighting one strategic direction to strengthen research work on CBDC with a view to future-proofing Hong Kong in terms of CBDC readiness.