Bybit’s Notcoin listing debacle, China firm’s profits up 1100% after crypto buy: Asia Express

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

Bybit’s open-day Notcoin woes

Cryptocurrency exchange Bybit hasbeenembroiledin controversyover the initial listing of Notcoin (NOT), a play-to-earn game and token integrated as a Telegram Mini App and built on The Open Network.

Essentially, not all users received their airdrop before the market opened, leaving them at a disadvantage to those who had. The trading price was subsequently much lower than some other exchanges.

“Bybit team is working very hard to solve the Notcoin airdrop balance reflection issue,” wrote CEO Ben Zhou in an X post on May 16 in the hours before trading commenced, continuing:

“Our wallet received around 370k on-chain transactions from @thenotcoin; only Bybit airdropis sentthis way; it will normally take quite a long timeto be ableto catch up all balances and reflect. We are trying manual credits for all users before the market opens in 1 hour; please stay tuned. All hands on deck. We are trying as hard as we could to get the notcoin into your account before market opens.”

Zhou further stated that the exchange will formulate a compensation plan for all 320,000 users affected by abnormal Notcoin account balances on the day of a debut. He claimed 70% of eligible users had been credited before the market opened. “Sorry to let you all down. We will make sureto never let it happen again,” the CEO added.

Not all users were happy. 

“Binance and Bitget listed [NOT] at 0.01 while Bybit listed at 0.0007,” one user wrote. “That is why they are talking about compensation to silence people,” they alleged. 

Data from Binance and Bitget showsthat Notcoin explained volatile trading action after its debut with a day low of $0.000779 apiece and a high of $0.035.However, the same asset on Bybit only shows a peakhighof $0.01.

Notcoin's wild trading day on Bybit.
Notcoin’s wild trading day on Bybit.

On May 10, Cointelegraph reported that Bybit announced upcoming Notcoin trading and withdrawals for its users.

Launched in January 2024 without a coin as the name suggests, Notcoin is a free play-to-earn game on Telegram where users can earn rewards in the eponymous Notcoin token by tapping coin icons. The token currently has a fully diluted market cap of $818 million.

Is Hong Kong a crypto hub yet?

In an interview with Hong Kong media, crypto exchange OSL’s chief financial officer Davin Wu said that the city was a “testing ground for digital assets” in China and that “more innovative products” are set to be launched following the debut of spot Bitcoin and Ether ETFs on April 30.

“Today, it is still in a very preliminary stage, just a starting point for this [crypto] industry,” said Wu.

“In the future, there may also be margin trading, or some derivatives, options, futures, etc. linked to digital assets [in Hong Kong].”

Last month, the East Asian city became the first in the world to offer both spot Bitcoin and Ether ETFs. The city also has a Cyberport initiative that attracted 150 Web3 and AI firms to settle in 2023. 

The hype has not been matched by the reality of inflows.

Prior tolaunch, Hong Kong crypto ETFs attracted around $293 million in seed assets under management.Since then net trading outflows for the six spot crypto ETFs have amounted to $29.9 million, under performing on a relative basis the huge haul of U.S. spot Bitcoin ETFs in the months after their release.

But there are still signs of hope for a turnaround.

According to a survey by KPMG Advisory and Aspen Digital, 92% of Hong Kong respondents are interested in digital assets, while 54% are looking to expand digital assets to 5% to 30% of their investment holdings.

“In recent years, some mainstream institutional investors have also joined the ranks of investing in virtual assets, which has enhanced the confidence of family offices and high-net-worth individuals,” the survey authors wrote.

Hong Kong crypto ETFs have underperformed compared to their U.S. counterparts. (Farside)
Hong Kong crypto ETFs have underperformed compared to their U.S. counterparts. (Farside)

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China’s crackdown on crypto MLMs

Chinese police continue to crack down on the use of cryptocurrencies, taking aim at the promoters of dubious or illegal crypto schemes.

Recently, the Political and Legal Affairs Committee of the Anhui Provincial Party Committee said that it would apprehend suspects engaged in any form of multi-level marketing (MLM) activities promoting “blockchain, metaverse, digital asset trading, Bitcoin mining, and forex trading” activities.

“In view ofthe new characteristics and new trends of MLM activities, especially online MLM, we will proactively issue warnings to the society, improve the public’s awareness and ability to prevent MLM, and create a strong social atmosphere to combat MLM,” law enforcement wrote.

Last year, Kunming police busted a $39 million Bitcoin mining MLM scam where markets promised returns of “2% to 30%” to recruiters who lured victims into the alleged Ponzi scheme.

Curiously, Kunming is the city where Zhaojun, the CEO of blockchain bridging protocol Multichain, is allegedly being detained and has not been heard from since last July when the billion-dollar DeFi protocol collapsed as a result of his arrest.

On May 16, Chinese police busted a $1.9 billion underground banking firm where the perpetrators allegedly used the Tether stablecoin in a scheme to exchange the Chinese Yuan for foreign currencies, thereby bypassing the country’s strict forex controls. The Chengdu City Police issued a media report highlighting the details of the underground operations and said it had arrested 193 suspects across 26 provinces.

Chinese police and detained suspects of a crypto scam ring. (Sina)
Chinese police and detained suspects of a crypto scam ring. (Sina)

Chinese gaming firm rakes in 1,100% profit after investing in crypto. 

Chinese online gaming company Boyaa Interactive, with its shares listed in Hong Kong, anticipates that its profits for Q1 2024 will soar by 1,125% compared to just $3.98 million in the same quarter last year due to unrealizedprofitson its Bitcoin and Ethereum investments.

During the same period, its core gaming business onlybrought in increased revenues of10% to 15%, suggesting putting crypto on your balance sheet can be a wise move in some circumstances.

Last December, Cointelegraph reported that Boyaa Interactive purchased $100 million in Bitcoin, Ethereum, USD Coin, and Tether for addition to its corporate treasury. Boyaa stated at the time: 

“The Internet gaming business mainly operated by the Group has a high degree of logical fit with Web3 technology. It attaches great importance to communities and users, covers virtual asset attributes and other characteristics, making Web3 technology easier and more widely used in the Internet gaming industry.”

Since then, the firm’s stock has tripled in value, and Boyaa plans to purchase an additional $100 million in cryptocurrencies to up its stake in its initial investment. In its March update, the company disclosed that it holds 1,110 Bitcoin with an average unit price of approximately $41,790, a total of 14,855 Ether with an average unit price of approximately $2,777, and approximately 8,000,000 units of USDT. 

Boyaa Interactive stock has been surging for much of the year. (Yahoo Finance)
Boyaa Interactive stock has been surging for much of the year. (Yahoo Finance)

Zhiyuan Sun

Zhiyuan Sun is a journalist at Cointelegraph focusing on technology-related news. He has several years of experience writing for major financial media outlets such as The Motley Fool, and Seeking Alpha.


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