Chinese Region Hainan to Invest 1 Billion Yuan to Foster Blockchain Development

China’s interest in the blockchain technology continues to grow and the Hainan Free Hainan Free Trade Zone (FTZ) committed to invest 1 billion Yuan to stimulate local businesses.

According to local news outlet Xinhua Net, Hainan’s dedicated economic pilot zone has pledged to foster businesses in the blockchain industry by incentivizing talent and promoting the technology’s implementation in sectors like housing, healthcare, tourism and trade.

Hainan is the first blockchain pilot zone and will be based in the Hainam Resort Software Community. According to Wang Jing, the head of the department, this is also the first pilot to be approved by the local government.

The fostering measures include a fund worth 1 billion yuan, approximately $142 million. The announcement sees Hainan fall in line with various other Chinese provinces which have confirmed financial support for blockchain in recent weeks and months.

In general, the Hainan Free Trade Zone is a pilot economic area established by President Xi Jinping in 2018. The plan set out to make the island a free trade zone by 2020 and eventually turn into a free port by 2025.

Blockchain continues to be a hot topic in China and for Chinese officials with endorsement of technology application. However, the Chinese government remains vigilant on trading activities, iterating their stance that trading needs to be monitored and sanctioned.

In a comprehensive plan to utilize blockchain technology and big data, the government aims to facilitate the development of secure and trusted data sharing and digital governance.

The Hainan zone has seen an influx of blockchain companies, including two major cryptocurrency exchanges in Huobi and OkEX. In total there are over 100 blockchain businesses that joined the Hainan Resort Software Community.

Among the latest funds to come from the local industry was a $140 million injection from OK Group, the parent company of trading platform OKCoin. Prior to that, the government of Guangzhou also said it would inject 1 billion Yuan into the industry.

DX.Exchange Platform Shuts Down Less Than A Year From Launch

DX.Exchange, a Nasdaq-powered cryptocurrency and tokenized securities trading platform, has announced its closure just 9 months after its launch in January. According to the announcement, the company cited financial hardships as the main reason for its decision.

On November 3rd, the Estonia-based platform announced via a blog post about its imminent shutdown. However, the blog post notes that the shutdown is only temporary, as the remaining members are looking for an acquisition or a merger to continue running.

The blog post reads the following:

“We must inform the community that the board of directors of DX.Exchange has decided to temporarily close the exchange as we pursue a merger or outright sell of the company. […] The costs of providing the required level of security, support and technology is not economically feasible on our own.”

Upon the announcement, the exchange suspended trading on the platform as well as blocked all deposits. In addition to that, all open orders had been canceled at 12:00 GMT on Sunday. The exchange further asked users to withdraw their funds by November 15th in order to allow a merger/sale to proceed.

For the withdrawal process, the exchange requires that users email its support team with a copy of their government ID used for the initial signup, the wallet address and the amount for each asset they are withdrawing, as well as a selfie with a paper with the date and the words DX Exchange. Users are required to use the same email they set up the account with.

Meanwhile, if a merger or acquisition does not happen soon enough, then the exchange will stop operations permanently, according to the announcement. However, the exchange remains hopeful as it wants to achieve “success for its shareholders and compete in this challenging market.”

With the shutdown announcement, it remains unclear what will happen to the platform’s staff, which ranges between 51-200 employees, according to LinkedIn. The firm has yet to comment on the matter.

DX.Exchange launched its platform in January of this year, and offered trading in cryptocurrencies as well as tokenized securities such as stocks of Tesla and Apple and exchange-traded funds or ETFs like Invesco QQQ and SPDR S&P 500.

Noteworthy, DX.Exchange was the first cryptocurrency trading platform to be built with Nasdaq trading technology in combination with the exchange’s in-house tech, making it a potential powerhouse.

Grayscale Investments Registers Tripled Inflows in Q3 Led by Institutional Investors

Digital asset management Grayscale Investments, which offers investors access to Bitcoin and other cryptocurrencies in the form of shares, has published on Tuesday its third quarter inflows for 2019, marking a record of over $254 million in total investment into its products.

Accordingly, Grayscale provided details on the inflows in its Digital Asset Investment Report for Q3 2019 for the time period from July 1st 2019 to September 30th 2019.

The New York-based investment firm stated in the report that Q3 inflows amounted to $254.9 million, which is triple the $85 million it posted the previous quarter.  As such, inflows over the past year hit a record $412.M. In total, the firm manages over $2 billion on behalf of institutional investors, wealthy individuals, and hedge funds.

The report further shows that 84% of the new funds came from hedge funds and other institutional investors. Notably, total investments into Grayscale products from January 1st 2019 through September 30th 2019 reached $382.3 million, while the figure over the past 12 months is $412.3 million. Compared to previous quarters, the assets managed in the funds, excluding its flagship GBTC product, grew in total by $107M in the third quarter.

Currently, the digital investment giant operates a total of 10 funds tied to the cryptocurrency market, including ones tied to ZCash, Ethereum Classic (ETC), and its Grayscale Digital Large Cap Fund, which on Monday received clearance from FINRA to trade openly in the over-the-counter (OTC) market. Seemingly, this enables the first publicly quoted security based on a selection of digital currencies in the U.S.

Furthermore, the report shows that 67% of third quarter investments went into the company’s Bitcoin Trust shares, while virtually all the rest went to shares of other cryptocurrencies, Ethereum and Ethereum Classic.  As reported in July, Grayscale Bitcoin trust outperformed indices in the first half of 2019, up almost 300% on the year at the time.

Grayscale’s managing director Michael Sonnenshein attributed recent asset growth to the company’s #DropGold campaign, which launched in May and called on U.S. investors to abandon precious metals and join the Bitcoin movement. He further noted that the asset growth was being driven by traditional funds as well as investors, who decided to make digital currencies part of their portfolio mix.

“Most of our institutional investors are actually not crypto hedge funds,” he said. “It really runs the gamut — we have tons of global macros funds who maybe look at digital assets as a way to be short fiat money or thinking about all the economic and political turmoil going on globally.” 

Following the success of the previous campaign, Sonnenshein stated that a similar capaign will be launched within the near future.

Binance Announces Investment in Crypto Chinese Media Outlet Mars Finance

Cryptocurrency exchange giant Binance Holdings Ltd. has made a strategic investment in a Chinese media cryptocurrency and blockchain-focused news website Mars Finance.

According to news, the investment amount has not been disclosed; however it scored the company a valuation of $200 million.

The startup has previously raised two funding rounds and is backed by IDG Capital and the venture subsidiaries of OKCoin and Huobi. Aside from Binance, the latest funding round has included other investors such as included Ceyuan Ventures and Matrixport, the financial services startup created by Bitmain Technologies Ltd. co-founder Wu Jihan.

Following the news, Binance CEO Changpeng Zhao tweeted to confirm the news, expressing the company’s willingness to support the industry. He stated:

“Let’s make more news, and less FUD. Invest in the industry.”

This marks Binance’s first strategic investment in China since its withdrawal from the market back in 2017. At that time, the exchange withdrew its operations due to the ban on digital currency trading. Founder “CZ” Zhao Changpeng has stated that Mars Finance has rapidly expanded its influence since launch.

Mars Finance was founded by local entrepeneur Wang Feng in 2018, and the news platform serves as a Chinese-language crypto news service. According to the firm’s website, it is indicated that the startup provides as well market reports  and it has also launched its own venture fund called Consensus Lab, which has invested in nearly 50 high-quality blockchain projects such as  Hong Kong-based Coinsuper, Quark, Bumo, Celer, Certik, Bitforex, and Bgogo.

Prior to Mars Finance, Wang co-founded Linekong Interactive Group Co. in 2007, which is a mobile game developer and publisher that went public in Hong Kong in 2014.

Currently, the Chinese version of Mars Finance, with the domain huoxing24.com, has around 124,000 monthly visits, with a 70,947 rank in China, according to website traffic tool SimilarWeb. The English-language version of the website, however, appears to be relatively inactive since early January 2019.

The news follows as Binance’s new U.S. platform prepares to onboard customers in preparation for live trading. Last week, Binance US announced that it would open registration and deposits on September 18th, after which it will roll out a number of Binance products across the U.S.

Alan Howard Behind the $1 Billion Crypto Hedge Fund

Elwood Asset Management, a UK-based investment firm owned and founded by hedge-fund billionaire Alan Howard, is planning to launch a $1 billion venture in the cryptocurrency hedge fund space, according to a report published by The Financial Times on August 30th.

Elwood Chief Executive Officer Bin Ren disclosed to the Financial Times that the firm was working on a platform that would tailor portfolios of cryptocurrency funds for institutional investors.

According to the report, the new platform aims to address the volatility and security risks often associated with the crypto hedge funds. CEO Ren claimed that the objective was to provide investors with a selection group of vetted crypto funds have passed robust due diligence so that market participants can avoid “blow outs.”

Whilst the details of the new venture have yet to be finalized, it is noted that the platform would allow investors to specify their terms such as the risk level they are willing to take, the returns they expect, as well as their liquidity terms. In addition to that, it will also determine the potential correlation with other assets owned by the investors. As a result, investors will get portfolios specifically tailored to their needs.

Besides the fees the investors need to pay to access the underlying funds, they would also have to pay a certain fee to Elwood for using the new platform.

“I see this as a very big growth opportunity,” Ren said, adding that the new platform-style product could ultimately manage over $1 billion of assets.

Meanwhile, Elwood has been screening crypto hedge funds and has already identified up to 50 that “probably satisfy our due diligence.”

The new platform builds on Elwood’s previous work in the crypto space. Earlier this year, the investment firm launched the Elwood Blockchain Global Equity Index. The index, which is calculated by index provider Solactive AG, stimulates investment into both crypto and blockchain projects.

Elwood had also indicated it was planning to increase its cryptocurrency offerings as it announced the launch of a blockchain exchange-traded fund in partnership with Invesco, which would be listed on the London Stock Exchange.

Last month, Invesco Japan launched the Japanese domestic ‘Invesco Global Blockchain Equity Fund’, offering Japanese investors exposure to digital assets and blockchain technology. The fund will track the performance of the Elwood Blockchain Global Equity Index.

Prior to this, there had been other reports that also suggested Elwood was planning to launch a range of cryptocurrency products targeting institutional investors. Moreover, Alan Howard himself has a host of crypto investments under his belt, including in EOS developer Block.one as well as the ICE-owned digital assets platform Bakkt.

The new venture follows other billion-dollar-plus investments in the space. For reference, Telegram’s blockchain, TON, which is expected to be released in the coming months, raised over $1.7 billion.