Rise of MicroStrategy clones, Asia dominates crypto adoption: Asia Express 2024 review

With the end of the year in sight, Asia Express looks back at some of the most significant developments for Bitcoin and cryptocurrency in the region in 2024.

MicroStrategy’s Bitcoin blueprint 

MicroStrategy has become the poster child for Bitcoin, snapping up 439,000 BTC, according to BitcoinTreasuries.NET — around 2% of the entire supply.

The title of “MicroStrategy of Asia” now appears to have passed to Japanese firm Metaplanet.

The company holds 1,142 BTC after adding 123 coins to its collection on Nov. 19. CEO Simon Gerovich claims Metaplanet is one of Asia’s largest corporate Bitcoin holders.

The MicroStrategy standard. (Simon Gerovich)

But if we are going on raw numbers, then Hong Kong-based gaming company Boyaa Interactive has quietly accumulated even more than the Japanese investor. In late November, Boyaa announced that it converted $49 million of its Ether holdings (14,200 ETH at the time) to 515 BTC, raising its stash to 3,183 BTC. Maybe it’s the real Asian MicroStrategy?

Other firms are getting into the act as well. SOS, a China-based blockchain and data services firm listed on Nasdaq, has pledged to purchase $50 million worth of Bitcoin, while publicly listed Indian firm Jetking Infotrain adopted a Bitcoin reserve strategy starting with 12 BTC.

Even governments are diving into the Bitcoin game. In September, Arkham Intelligence said that Bhutan, through its investment arm Druk Holdings, had amassed twice as much Bitcoin as El Salvador.

Though the Himalayan kingdom has cashed in on some of its Bitcoin since Arkham’s report, it still holds 11,688 BTC as of Dec. 19. Bhutanese officials reportedly confirmed that the country has been mining Bitcoin since 2019.

Key Asian economies hesitant about Bitcoin ETFs

The year started out with a bang as the United States Securities and Exchange Commission approved 11 spot Bitcoin ETFs in January.

The US is often seen as a regulatory trendsetter as the largest market in the world, with the US dollar functioning as the dominant global reserve currency. Though it wasn’t the first nation to list spot Bitcoin ETFs in its market, it certainly sparked a tidal wave of interest.

In late April, Hong Kong, whose own dollar is pegged to the US greenback, became the first Asian jurisdiction to launch spot Bitcoin and Ether ETFs.

So far, Hong Kong’s ETFs have underperformed expectations.

Initial rumors ahead of the approvals drew a lot of hype about the ETFs potentially opening up crypto to investors in mainland China, where crypto trading is banned. Chinese investors can invest in the Hong Kong market through the Stock Connect program, which acts as a bridge between the two economies. However, mainland investors have been barred from investing in Hong Kong’s crypto ETFs unless they are Hong Kong residents.

The US Bitcoin ETFs attracted billions of dollars in inflows during their first week, setting a high bar that their Hong Kong counterparts failed to match. The Hong Kong Bitcoin ETFs saw $262 million in inflows during their first week, with $14 million in transactions occurring after the listing and the majority taking place beforehand. As of this week, the ETFs have a total of $437 million in net assets.

Bloomberg ETF expert’s reality check on Hong Kong Bitcoin ETF debut expectations. (Eric Balchunas)

Meanwhile, Singapore Exchange CEO Loh Boon Chye said the local ecosystem is “not ready” for such products.

South Korea has emerged as a key crypto market, with the Korean won dominating global crypto trading pairs. However, its market remains retail-driven due to local rules requiring traders to use real-name bank accounts at licensed financial institutions. Corporations are excluded from opening such accounts, effectively fencing them out of the crypto market.

South Korea’s financial regulator began discussions in October about potentially allowing corporations to open crypto accounts.

The war on pig butchers

Pig butchering scams, named after the tactic of fattening up victims through forged relationships before scamming them, have evolved with new tools like AI-powered face-changing technology. According to University of Texas finance professor John Griffin, these scams have stolen over $75 billion globally.

In 2024, investigations into massive scam centers across Southeast Asia saw Cambodia emerging as a major hub. Security researchers at Elliptic identified the online marketplace Huione Guarantee as a key money-laundering hotspot for illicit actors. Crypto forensics firm Chainalysis found that since 2021, Huione Guarantee has processed over $49 billion in crypto transactions.

Elliptic alleges that a Huione Pay representative assisted a Huione Guarantee user inquiring about laundering scam proceeds. (Elliptic)

Huione Guarantee is owned by the Huione Group, which also operates Huione Pay, a foreign exchange business. Elliptic tied Hun To, cousin of Cambodian Prime Minister Hun Manet, to Huione Pay’s directorship. In 2012, Hun To was reportedly suspected of money laundering and drug trafficking by Australian authorities but denied all allegations.

In September, the US sanctioned Senator Ly Yong Phat for alleged involvement in human trafficking and forced labor tied to crypto scams.

Investigative journalist Mech Dara alleged Phat’s resorts were hubs for such operations, where trafficked individuals were forced into scamming first-world victims. Dara was arrested by Cambodian authorities on charges of “incitement to cause public disorder” as human rights groups condemned the arrest as an attack on press freedom.

The Philippines also saw some high-profile cases, including former Mayor Alice Guo, who was implicated in an international scam network. Authorities raided a property she co-founded, reportedly rescuing hundreds of trafficked workers forced into crypto scams. Guo is now under Senate investigation for ties to offshore gaming operators, scams and suspected links to Chinese criminal syndicates.

India and Indonesia lead the charge as Asia dominates crypto adoption

Nine of the top 20 nations in Chainalysis’ 2024 Global Crypto Adoption Index are in Asia, with India securing the top spot.

Thai and Filipino investors mostly rely on centralized exchanges, while other top Southeast Asian countries’ DeFi and DEX activities are higher than global averages. (Chainalysis)

Despite strong adoption in India, crypto remains unloved by the government. The country enforces one of the world’s strictest tax regimes for crypto investors, including a 1% tax deducted at source on all transactions, which dampens trading volume for local exchanges.

Nine offshore exchanges were kicked out of the country at the end of 2023 after the information ministry blocked their URLs. This included Binance, which resumed functionality in 2024. Fears of a potential crypto ban have resurfaced, as the central bank is reportedly considering outlawing crypto in favor of its CBDC.

Indonesia, which ranked third behind Nigeria, led the region in cryptocurrency value received from July 2023 to June 2024, amassing $157.1 billion.

Singapore and Hong Kong are among the top 20 players in the adoption index and are racing to establish themselves as regional crypto hubs. Singapore, praised for its regulatory framework, approved licenses for major exchanges such as Gemini, OKX and Upbit in 2024, adding to a roster that includes major crypto firms like Coinbase and Ripple.

Hong Kong has been slower in issuing licenses but plans to approve 11 by year-end, according to Securities and Futures Commission CEO Julia Leung. The city is also considering slashing crypto taxes for the ultra-wealthy.

Asian private wealth is increasingly drawn to crypto, with 94% of wealthy investors either investing in or planning to invest in Bitcoin or other digital assets, according to Aspen Digital.

Lazarus strikes again… and again

In 2024, North Korea’s state-backed hacking group intensified its hacking and phishing onslaught, targeting major cryptocurrency firms to allegedly fund the nation’s weapons of mass destruction program.

The group was linked to some of the year’s largest crypto heists, including a $305 million breach at Japan’s DMM Bitcoin and the $235 million hack of India’s WazirX. Lazarus is also a prime suspect in additional exploits, such as the $20.5 million hack against Indonesia’s Indodax and the $45 million hack of Singapore-based BingX.

Beyond direct hacks, North Korean cybercriminals have infiltrated crypto firms as employees, siphoning salaries to generate an estimated $250 million to $600 million annually, according to United Nations estimates. Additionally, the US Federal Bureau of Investigation warned of state-sponsored actors conducting social engineering campaigns, including fake job offers and impersonations, to gain access to corporate networks.

Sapphire Sleet as recruiters on LinkedIn. (Microsoft)

Tech giant Microsoft also flagged a North Korean state-sponsored group known as “Sapphire Sleet,” active since 2020, that exploits crypto firms by posing as venture capitalists. The group lures targets into video meetings, leading them to download malware disguised as connectivity software.