Macau gaming company Dragon Corp’s initiative to integrate blockchain into the world’s biggest gambling hub was thrown into uncertainty on Monday by the sudden and unexpected presence of “Broken Tooth” Wan Kuok-koi, the notorious former Triad boss.
Dragon Corp and its business partner, Wi Holding Company, plan to hold an initial coin offering for their new digital currency next month when they hope to raise $500 million.
The cash will be partly invested in the Dragon Pearl floating casino, currently under construction in Norway, as well as being plowed into its junket operations.
This will, for the first time, allow members of the public to own pieces of a Macau casino and its junkets via the new digital tokens.
But photographs obtained by the South China Morning Post revealed that Wan, who served 14 years in prison for illegal gambling, loan-sharking, criminal association, and the attempted murder of Macau’s chief of police, showed up at the signing ceremony on Monday to mark the joint venture between Dragon and Wi Holding.
Wan’s presence is likely to attract the scrutiny of regulators, at a time when Beijing, battling capital flight and “frivolous” investment, has cracked down on the use of digital currencies.
Earlier this month, the People’s Bank of China banned ICO’s and shut down the country’s major digital currency exchanges.
On Monday, Chakrit Ahmad, the CEO of Wi Holding Company, said the venture would swerve the authorities in Beijing because the tokens will be issued in the autonomous territory of Hong Kong, which classes digital currencies as “virtual commodities” that aren’t subject to regulation.
But others aren’t so sure. “This is probably a more secure IOU than the junkets’ traditional handshake or one-page agreement,” a source with knowledge of junket financing told the South China Morning Post. “However, that is precisely why it is impossible to believe this will be tolerated by the authorities. They are essentially trying to use an IT patch to legitimise an underground activity.”
As head of Macau’s 14k Triads, Wan presided over a brutal war in the nineties, when rival gangs were vying for control of the enclave’s junket operations.
He was arrested shortly after the failed car bomb assassination attempt of police chief Antonio Marques Baptista and sentenced to 15 years in November 1999, just a month before Macau was returned to Chinese sovereignty after 400 years as a Portuguese colony.
Wan was released in 2012 and is believed to have re-entered the junket industry.