A ‘crypto Spring? Asias Digitalasset Champions Hold Out Hope For A Rebound

Asian crypto companies that survived last year's industry crash are carefully planning their recovery in the so-called "crypto winter."
Many digital currencies seek to maintain regulation. some experts have warned that "crypto is not the future".

For the Asian digital battery giants, the dilemma is clearly more complex. how to restore trust in cryptocurrencies and how to convince investors of a new financial mandate as non-financial token (NFT) prices fall. Corrupt system, not like before.

Yusho Liu, co-founder of Singapore-based Cryptocurrency Exchange, the city's leading trading platform, says the game is far from a digital currency, even as bitcoin loses value after losing FTX, the world's third-largest cryptocurrency exchange . . It had more than 1 million users.

"We recognize that confidence in the crypto space is waning, but our outlook for 2023 is optimistic," Liu said in Asia this week.

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Liu offers a tale of optimism for what is expected to be a $7 billion company with more than 380,000 customers and about 150 employees.

But he is not alone. As the world watches the collapse of cryptocurrencies, the surviving companies are carefully planning their recovery.

A recent exhibition at Singapore's Gilman Barracks, a collection of international art galleries in the southern part of the island nation, sought to prove the value of NFTs.

Proof of concept, the exhibition spans a sprawling two-room space and brings together some of the world's most influential names in the digital and crypto industries.

"The underlying value of NFTs has been tested recently," said Liu, whose company sponsored the event

Hong Kong's cryptocurrency reversal inspires optimism for a turbulent 2022.

But the exhibit is "proof of how a crypto project can benefit the space and the public," he said.

Organizers expect the 10-day exhibition, which attracted thousands of visitors, to be Singapore's most influential digital media and crypto art exhibition this year.

But not everyone is excited after a year of scandals and indifference from exchanges and investors big and small to many cryptocurrency-based fintech startups.

Cryptocurrency is not the future. Technology is the future. The digital world is the future.

Antonio Fatas, professor of economics at INSD

“Crypto is not the future. The future is technology. The future of the digital world," says Antonio Fatas, professor of economics at the INSEAD business school.

Bitcoin, the leading cryptocurrency, has partially recovered its value since the switch to FTX, trading at $22,000 last week, but is still below the 2021 peak of $68,000.

However, many observers continue to warn those involved in the notoriously volatile digital asset that the worst is yet to come, with many businesses and exchanges likely to collapse in the coming months, extending the long and bitter crypto winter .

Genesis, a cryptocurrency lender with operations in New York, London and Singapore, filed for bankruptcy in the US last week in a "mega" case involving more than 100,000 borrowers.

The drop in FTX continues to spread, affecting the Hong Kong and US stock exchanges.

It follows crypto hedge fund Three Arrows Capital, which shut down last year when crypto lender Hodlenote was placed into receivership by a Singapore court. City-state-based cryptocurrency exchange Crypto.com also cut its global workforce by 20 percent in January.

Other parts of the region also experienced declines. In Thailand, crypto exchange Zipmex suspended all trading and withdrawals on its platform last year, and local regulators recently launched an investigation into possible rule violations.

The country's oldest lender, Siam Commercial Bank, which is partly owned by Thailand's king, has abandoned plans to acquire another cryptocurrency exchange, Bitcube.

Trust the offer

The past year has brought constant challenges to the cryptocurrency space.

It started with the collapse of the TerraUSD stablecoin in the summer, followed by the collapse of the FTX exchange in November, which coincided with a massive investigation in America and allegations of fraud by leading client Sam Bankman-Fried of $8 billion. .

As a result, the value of the cryptocurrency decreased. Moreover, the scandal highlights the dangers of the industry.

"This is a wake-up call," said Phatas, a professor of economics in Singapore. Questions have been raised about how Bankmann-Fried, a leader considered a guru in cryptocurrency circles, was able to use the alleged scam tactics to grow the company and cast doubt on other celebrity-based ventures.

Former FTX CEO Sam Bankman-Fried, who is charged with fraud in connection with the collapse of the bankrupt cryptocurrency exchange, appeared in court in New York earlier this month. Photo: Reuters

© South China Morning Post Former FTX CEO Sam Bankman-Fried appeared in a New York court earlier this month on fraud charges related to the collapse of the bankrupt cryptocurrency exchange. Photo: Reuters

"If he trusted, why should we trust his team?" asked Fatus.

Indeed, as the list of crypto-related casualties grows, some retail investors have begun to distance themselves as skeptics grow louder.

What about the coming months? Fattas believed that the recent events will not be the end of the crypto industry, mainly because "there are enough crypto enthusiasts out there who do not accept failure," but said it seems less likely than before.

What the Bitcoin carnage reveals about the cryptocurrency market

"Bitcoin fell like money and payments. Now cryptocurrencies are not seen as a common investment asset," he said, expecting "a lot more" to fall this year.

National University of Singapore (NUS) business professor Lawrence Lowe called the past year "very interesting" and said 2023 would instead be "an important watershed year" likely to be accelerated by litigation, legislation and licensing. .

He said the downward trend will continue, although he expects the market to be lower this year.

Falling point of cryptocurrency.

However, the current crypto challenges may give companies an opportunity to reinvent themselves and authorities to take measures to prevent a similar crisis from happening again.

Some companies see the coming year as a turning point and talk about Asia as a prosperous region with great potential for cryptocurrency development.

CoinHacor chief Liu said investors are moving away from riskier digital assets, citing "rising macroeconomic headwinds and some bad players" in the space.

He believes that Asia has become a hub for cryptocurrencies and other digital assets, and that companies in the region will continue to thrive.

Bitmex, one of the first cryptocurrency derivatives exchanges, was founded in Hong Kong in 2014. Photo: Manual

"Over the past decade, Asia has become a major driver of growth in the crypto space, and many successful and innovative projects have been developed in Asia," he said, referring to Bitmex, one of the first cryptocurrency derivatives -exchanges established in 2014 in Hong. Cong. . . For example: "As a long-standing crypto institution in Asia, Coinhako aims to navigate market cycles."

Coinhako currently has around 150 employees in Singapore and Vietnam and hired more than 70 people last year. The company plans to expand its presence in the area.

Singapore-based cryptocurrency exchange OKX has begun hiring and expanding globally despite the downturn . A spokesman said the exchange was "a great place to test the times".

But some companies have expressed concern that the crisis could have long-term consequences.

Cryptocurrency company Amber aims to cut costs to survive. Source:

Annabelle Huang, managing partner of Cryptocurrency Corporation, said: “Current market conditions are among the most difficult for Amber Group. The group reportedly cut several hundred jobs in December.

Even if the industry eventually recovers, he said, there won't be "profits and revenues" like before.

"The time has come to demystify this industry so that only serious players who are truly committed can win and make the future of crypto-finance a reality," Huang added. “It's not just a bright spot. This is the light at the end of the tunnel."

After last year's crypto winter, I believe that crypto spring is finally here.

Eddie Hui, CEO of Metacorp

For RockX, a cryptocurrency company that specializes in "staking," a way to earn rewards for owning certain digital assets, the loss to the industry was "absolutely immeasurable." Founder Chen Zhuling says he's holding back the industry, and now doubts are growing about the legitimacy of cryptocurrencies.

However, the company has tripled in size over the past year to around 40 employees across Asia.

"[FTX's impact] will definitely cast a shadow over the crypto industry, something we all need to address together," said Eddie Hui, CEO of digital asset platform Metacomp.

"I think last year's crypto winter will eventually lead to a crypto spring where the most resilient players can thrive," he said.

Analysts expect the economic downturn to give companies a chance to survive.

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James Gordon, partner in digital and financial services at Oliver Wyman, said: “Ultimately, the focus will shift as funding, talent and attention are directed to stronger business models. "Those who cannot adapt die, and those who can thrive."

Industry should focus on creating services and products rather than encouraging speculative investment and risk, he said.

The resilience of Asian companies to further shocks depends on their supply chain.

Those that provide infrastructure and services such as cross-border payment facilities are well positioned to weather the downturn, Gordon said, while others looking to cash in on speculative investments could suffer.

Regulatory income

The collapse of FTX in November left governments and regulators around the world scrambling to figure out how to manage the rapidly changing space.

"Crypto investing is the equivalent of a casino and should be regulated as such," says INSIDE economics professor Fatas.

According to Gordon, digital assets have brought with them a wave of risks that are new and often poorly understood by investors.

"How serious those risks are depends on how quickly the ecosystem matures, how regulators take and develop measures to protect participants, and how oversight and enforcement are implemented." "The negative paradigm is that the ecosystem repeats the mistakes of traditional markets and innovation is too protective, leading to a complex risk landscape and new crises."

It is time for Asian governments to send a signal… they cannot afford to ignore digital assets in the future

Lawrence Lowe, NUS Business Professor

Experts say that the main topic of 2023 will be jurisprudence.

First, the collapse of FTX put a lot of pressure on governments and regulators, among others.

"You can't wait for another FTX to come," said NUS Professor Loh.

Governments in Asia are taking various measures regarding digital assets.

A Bitcoin ATM powered by Coinhero appeared in Hong Kong last month. image: Bloomberg

China has completely banned cryptocurrency and digital token mining. India's central bank has also pushed for a complete ban on cryptocurrencies, but is yet to pass a law.

Tighter restrictions are expected after last year's crash in Singapore, already positioned as a global hub for cryptocurrencies. But his boss approached the matter by talking to industry players.

In October, the city-state's central bank proposed new rules to protect retail investors from cryptocurrency volatility and issued advisory documents warning citizens that its speculative nature could cause huge losses.

But regulators need to engage the industry and "not throw the baby out with the bathwater," Lowe said.

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“It is time for Asia to send a signal to the government. If you get your policies and regulations right, you can use digital assets as part of your broader financial (offering),” he said. "You cannot ignore digital assets in the future."

For Terence, a 35-year-old Singaporean who lost most of his S$33,000 (US$25,000) life savings, last year's cryptocurrency crash was an ordeal.

"Right now I'm naive about crypto," the marketing director said, naming just one.

But in a sign of the continued appeal of making money from assets with no intrinsic value, he continued to trade cryptocurrencies in search of margin when prices fluctuated. "Cryptocurrency is here to stay," he said.