Yuan stablecoin team arrested: Report

June 5, 2023

By Sharan Kaur Phillora

Chinese police have reportedly arrested and detained some employees of Trust Reserve, the company behind the yuan-backed CNHC stablecoin. According to a report from local media PANews, the Trust Reserve’s core team was apprehended at noon on May 29, and their family members have been notified.

Here’s what we know: 

Representatives for PANews visited the company’s office in Pudong, Shanghai, and found a vacant workspace with a seal that read “Judicial Seizure, Strictly No Vandalism” at the door. The notice was signed on May 29.

While the reason for the arrests is unclear, authorities could be clamping down on digital payments not using its RMB central bank digital currency.

Trust Reserve owns two stablecoins: an offshore Chinese yuan-backed asset (CNHC) and a Hong Kong dollar-backed token (HKDC). The stablecoin issuer recently secured $10 million for CNHC in a funding round led by KuCoin Ventures, the investment arm of Seychelles-based cryptocurrency exchange KuCoin.

Trust Reserves raised $10 million in a recent funding round led by KuCoin Investments, Circle, and IDG Capital. The firm recently relocated its headquarters from the Cayman Islands to Hong Kong.

The e-CNY has 260 million wallets and expanded to 25 cities. China has a strict ban on crypto trading and mining in force. Several countries, including Saudi Arabia, Bangladesh, and India, have expressed interest in trading using the digital yuan.

Trust Reserve’s current domicile Hong Kong gazetted virtual asset platform registration requirements on May 25. Notably, the new regulations do not accommodate stablecoins.

About the author

Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.

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