Chinese boomers joining crypto tapper cults, WazirX fallout worsens: Asia Express

Our weekly roundup of news from Asia curates the industry’s most important developments.

Chinese elderly clicker game cults are homewreckers

The Chinese online community has been complaining that their parents are becoming obsessed with cult-like cryptocurrency “mining” groups that are scamming the nation’s elderly, local finance outlet Blue Whale Finance reports.

The so-called mining apps related to the schemes are simple, even for the technically illiterate. They require participants to rapidly tap phone screens to accumulate points, as well as complete daily tasks like watching videos and ads.

Crowded street in Shanghai China

This concept is similar to viral Telegram-based clicker games like Notcoin and Hamster Kombat, though these games have rewarded users with airdrops, or at least promise to do so.

That’s not the case in China’s elderly tapping cults. Scammers often ask victims to pay fees and invite acquaintances into the group. Some apps even acquire users’ documents by asking them to go through Know Your Customerverification.

One source reportedly told the local news outfit that their grandmother invested a portion of her retirement savings after initially earning 20,000 yuan (around $2,800) in the scheme, but hasn’t been able to withdraw anything since then.

The outlet cited one former member of such groups to claim that participants are brainwashed and negative opinions are met with hostile responses or community bans.

These behaviors are brought home to families, and children’s warnings against the groups lead to arguments.

“My aunts were just like what was written in this article,” one reader commented.

“They insisted that the scam was real. They still believed it even when the scammer asked her to pay a 10% handling fee.”

It gets even worse for WazirX

An asset freeze for the cryptocurrency exchange WazirX is now on the table following a legal petition filed with the National Company Law Tribunal, India’s tribunal that oversees corporate disputes.

The petition, filed on Aug. 3, requests the NCLT to investigate possible mismanagement or fraud in WazirX following the $235 million hack suffered on July 18.

Varun Rawal, the petitioners’ lawyer, tells Magazine that his clients hope an investigation can shed light on how the suspicious transactions on WazirX wallets occurred and why the trading window was open until July 21.

WazirX announced on Aug. 8 that it would reverse all trades made on the platform after withdrawals were frozen on July 18 after the hack.

Under the nation’s Companies Act, any person can request the NCLT to open an investigation if there are reasonable grounds to suspect fraudulent activities or malpractice.

Depending on how the tribunal’s investigation goes, the petition can ultimately lead to freezing the company’s assets. It may issue fines and prison sentences for executives.

North Korea’s state-backed hacking group Lazarus has been accused of conducting the cyberattack against the Indian exchange.

WazirX last week faced heavy backlash for proposing a “socialized loss” strategy that aims to spread the damage among its customers. The exchange has since said it is considering all options to respond to the hack.

Japan calms rate hike fears, markets rebound as Metaplanet drools

Global stock and cryptocurrency markets rebounded following reassurances from Bank of Japan Deputy Governor Shinichi Uchida that the central bank will not raise borrowing rates amid market turbulence. This followed the BOJ’s recent interest rate hike, only its second in 17 years, which caused market turmoil and sent Bitcoin plummeting below $50,000 for the first time since February.

Before Uchida’s statement, the central bank initially hinted at further rate hikes, driving the Japanese yen’s value higher against the dollar. This increased the cost of yen-denominated loans, commonly referred to as yen carry trades.

In such trades, investors typically borrow low-interest yen to convert into higher-yielding currencies like the US dollar, which can be reinvested for better returns. It is believed that major cryptocurrency firms heavily involved in the yen carry trades are now confronting margin calls on their yen loans.

Industry experts speculate that Chicago-based Jump Trading and its cryptocurrency division, a major market maker in the industry, are facing substantial losses. The company has liquidated most of its risk assets for stablecoins and is rumored to be closing its crypto business. However, there’s no solid evidence to back that assessment up.

Conversely, some firms are capitalizing on the market downturn. Tokyo-based Metaplanet — often likened to “Asia’s MicroStrategy” — announced a new shareholder loan of 1 billion yen ($6.8 million) to acquire more Bitcoin. The company held 246 Bitcoin on July 22.

Meanwhile, the regulatory landscape for opening up institutional funds to crypto remains cold in Japan.

Financial Services Agency Commissioner Hideki Ito said his agency is taking a cautious stance in approving cryptocurrency exchange-traded funds, echoing Singapore’s approach and contrasting with Hong Kong’s more aggressive expansion of crypto ETFs.

Do Kwon’s South Korea extradition hits another road bump

The Supreme Court panel of Montenegro has postponed the extradition of Kwon Do-hyung (better known as Do Kwon) to South Korea, according to Montenegrin news outlet Vijesti.

Now, Kwon’s extradition will have to wait for the Supreme Court’s ruling on the protection of legality, which is a process that reviews whether a judicial decision was made on legal grounds and in accordance with the law.

Jail seen from behind bars

Kwon’s stay in Montenegro has just been extended. (Matthew Ansley/Unsplash)

This decision comes despite an earlier court statement indicating that there was no motion to challenge the appellate court’s decision, which upheld the high court’s ruling to extradite Kwon to South Korea rather than the United States.

On Aug. 2, Montenegro’s Supreme State Prosecutor’s Office appealed against the decision to extradite the former Terraform Labs CEO to South Korea by the appellate court.

The South Korean national has been in custody since March 2023, when he was caught attempting to fly from Montenegro to Dubai with a fake passport.

In April 2024, a US court ruled that Terraform Labs and Kwon were liable for the fraud scheme that deleted $40 billion from the Terra blockchain ecosystem. Terraform Labs agreed to a $4.47 billion settlement in June.