Summary:
- Law enforcement in China arrested the Trust Reserve team behind a Yuan-backed stablecoin and another token backed by the Hong Kong Dollar.
- Authorities wrote a “judicial seizure” notice at the teams’ office in Shanghai, PANews reported after visiting the building.
- The news follows unverified rumors that Multichain’s team was also arrested in China shortly after a so-called “force majeure” froze thousands of transactions on the cross-chain protocol.
Reports from PANews said that police in China arrested team members from Trust Reserve, the entity formerly known as the CNHC Group that issues two fiat-pegged stablecoin backed by China’s Yuan (CNH) and the Hong Kong Dollar (HKD).
Trust Reserve Shares Same Faith As Multichain
Authorities wrote a “judicial seizure” notice at the Trust Reserve office in Shanghai, PANews reported after visiting the building on May 29. Law enforcement reportedly informed the families of the arrested team members as well. Trust Reserve closed a $10 million series A+ funding round led by Kucoin Ventures in March.
The news follows unverified rumors that Multichain’s team was also arrested in China shortly after a so-called “force majeure” froze thousands of transactions on the protocol. Liquidity providers like the Fantom Foundations and other stakeholders like Justin Sun pulled out millions from Multichain citing uncertainty about the protocol’s bridge infrastructure and silence from the team.
Hong Kong Open To Crypto, Beijing Remains Cautious
While crypto trading, mining, and digital asset transactions remain banned in China, Beijing’s government is seemingly ready to consider web3 innovation. The capital city recently released a white paper to promote decentralized development.
Over in Hong Kong, authorities are laying the groundwork for a crypto ecosystem as the region introduced a licensing regime. Huobi HK already applied for a virtual asset exchange license and will offer crypto spot trading support. Other digital asset service providers like OKX are also interested in a similar license per reports.
Hong Kong is also collaborating with the central bank and policymakers in the UAE as both regions move to capture crypto’s attention amidst a lack of regulatory clarity in the U.S.
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