Our weekly roundup of news from East Asia curates the industry’s most important developments.Blowing up a Singaporean crypto hedge fund
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.
On the second day, Zhu Su claimed that the exchange facilitated $373 in trading volume after a media blitz brought much attention to the lackluster results. However, with great power comes great responsibility. Despite improving the exchange’s trading volume by 2,634% in one day, OPNX’s traction was partly derailed by Twitter suspending its official account due to terms of use violations.
Su has since created a Chinese Telegram channel for official OPNX communications. Meanwhile, the two were kindly reminded by critics once again that despite their continued entrepreneurship, creditors are still claiming an estimated $3.5 billion from their defunct hedge fund.
Huobi’s liquidation controversy
In a letter submitted to Chinese news aggregator Odaily.news, cryptocurrency exchange Huobi Global appears to have presented its side of the story regarding a flash crash that affected its native Huobi Token (HT) on March 10.
On the date of the incident, HT plunged to as low as $0.31 apiece from a high of $4.85 before subsequently recovering most of its losses. It currently trades at $3.58 at the time of publication.
According to Huobi, the incident was caused by “industry-wide macro events” relating to the recent failure of American tech banks. “Under such downward pricing pressures, repeated selling by big investors, and lack of liquidity with the HT token, led to margin liquidations, and in turn caused many leveraged investors to suffer losses,” Huobi wrote.
The event led to big losses among users who pledged HT as collateral for loans or were simply holding the token with leverage. Amid the guidance of self-proclaimed “adviser” and de facto owner of Huobi, Justin Sun, Huobi rolled out a compensation program for users affected by the HT flash crash, claiming that “more than 98% of affected users have negotiated a satisfactory solution with the platform and received compensation.”
However, one user, Lantian666, says he lost nearly $4 million during the incident and that his losses are yet to be fully compensated by Huobi. In the Odaily letter, Huobi acknowledged that one user lost an estimated $2.9 million after the flash crash caused liquidations. Lantian666 posted a series of screenshots and claims that Huobi’s customer service had only agreed to waive a portion of liquidation fees, which are nowhere close to his loss on trading positions.
cointelegraph.com