Welcome back to Blockchain & Crypto Asia. I am Coco. Let’s dive into the highlights of this issue:
U.S. companies are accelerating their global expansion efforts to proactively address regulatory risks.
bitFlyer U.S. is fined $1.2mm by NYDFS.
UAE is becoming a popular destination for crypto exchanges.
South Korea’s court rules that Luna is not a security.
8% of FTX’s 9 million users are Mainland Chinese citizens.
Here are more details.
American companies go global
An increasing number of U.S. crypto companies are growing their businesses globally. Coinbase is embarking on an 8-week international expansion drive, reaching countries including Singapore, Brazil, UAE, Bermuda to Europe. Gemini has launched a non-U.S. derivatives platform. Galaxy Digital and German asset manager DWS have entered into a partnership to develop crypto ETPs, while Galaxy Digital has also expanded its team by adding a group of traders in Hong Kong. Ripple is expanding in Dubai with 20% of its clients from MENA (Middle East and North Africa).
Photo credit: Brian Armstrong’s Twitter
While it is frustrating to be experiencing a hostile regulatory environment and lack of clarity at home, it also serves as a catalyst for U.S. companies to explore opportunities outside of the U.S. Being inherently decentralized, blockchain & crypto should be resilient to the unfriendliness of any particular jurisdiction.
New deals
⓵ Hong Kong-based Artifact Labs, a spin-off NFT startup from South China Morning Post (SCMP), raised $3.5mm from Blue Pool Capital, the family office of Alibaba co-founder Joe Tsai, who also serves as the chairman of SCMP. Animoca Ventures, the investment arm of Hong Kong-based blockchain video gaming unicorn Animoca Brands, also took part in the funding round.
⓶ Right after a strategic funding round from Binance Labs, Polyhedra Network, a zero-knowledge (ZK) proofs Web3 infrastructure startup based in Berkeley, CA, received $15mm Pre-A funding led by Polychain, joined by ABCDE, Sparkle Ventures, HashKey Capital, Foresight Ventures, Kucoin Ventures, NGC Ventures and Arcane Group.
⓷ Singapore-based cloud crypto mining company BitDeer, founded by Jihan Wu, went public on Nasdaq through merger with a SPAC and was valued $4B.
Photo credit: Jihan Wu’s Twitter
⓸ BitDeer and Bhutan’s investment arm Druk Holding & Investments team up to raise up to $500mm to develop green mining in Bhutan by tapping into its abundant hydroelectric power. The fund raise will start end of May.
⓹ South Korea’s leading game publisher NEOWIZ raised $12mm for its Web3 gaming platform, Intella X, which is going to launch on Polygon. Intella X is to bridge the gap between Web2 and Web3 through unique platform protocols, services, and games. Investors in Intella X include Polygon, Animoca Brands, Magic Eden and other backers.
⓺ Saudi Arabia’s first NFT marketplace Nuqtah raised a seed round from Animoca and Polygon.
Activities worth watching
∆ Animoca and stc play enter into MoU to distribute gaming on Saudi Arabia’s stc play’s platform.
⊲ Noncustodial wallet solution provider SafePal, based in Shenzhen, China, a portfolio company of Binance Labs, is expanding into South Korea through integration with South Korea’s L1 Klaytn.
⊳ Binance’s NFT marketplace is going to support Ordinals sometime in May.
⊵ Bitstamp starts to offer crypto lending products, mostly large-cap cryptos and stablecoins, in Europe, Hong Kong, and UAE, partnering with Finnish company TESSERACT.
⫸ bitFlyer U.S., the U.S. arm of Japan’s largest crypto exchange bitFlyer, was fined $1.2mm by New York regulator NYDFS for failing to meet its cybersecurity requirements.
New launches
◐ HashKey Pro, Hong Kong-based regulated crypto exchange affiliated with HashKey Group, is set to launch in Q2, 2023.
◒ HashKey Group launches HashKey Wealth, an investment and wealth platform serving professional and accredited investors, family offices, and institutions to access virtual assets.
◔ OSL received licenses from the Hong Kong regulator to conduct asset management business focused on investments in blockchain solutions, AI and Web3.
◓ After receiving the in-principal approval from Dubai, Bybit opened its global headquarters in Dubai.
◕ UAE-based BitOasis received the first broker-dealer minimum viable product (MVP) operational license from Dubai's crypto regulator.
Hard to believe
A public laundry room in Hong Kong has a Bitcoin ATM installed.
April’s Web3 Conference Hong Kong sold 15,000 tickets and an estimated 50,000 people showed up in Hong Kong for the conference and/or side events. A visitor to the Consensus 2023 who flew in from Asia commented, “What a contrast with Web3 Conference Hong Kong in terms of sentiment, here in Austin people feel beat down.”
Photo credit: Arthur Hayes’s Twitter
South Korea’s court rules that Luna is not a security, but a commodity, based on the argument:
“In order for the purchase of cryptocurrency to be an investment contract, in addition to the right to share profits, there must be a right to distribute property during liquidation, but there is no mention of the right to distribute liquidation anywhere in the cryptocurrency white paper.”
Regarding whether cryptocurrencies are securities, the Financial Services Commission said,
"We will make a decision on a case-by-case basis, taking into account specific facts and the content of advertisements and recommendations presented to receive investment."
Out of FTX's total user base of 9 million, Chinese users made up 8%, indicating that approximately 720,000 FTX exchange users are from Mainland China, according to FTX bankruptcy filings.
Many people may not be aware that China has not outright banned its citizens from owning cryptocurrencies, nor can it prevent them from trading on exchanges outside China. Despite Chinese banks being prohibited from offering on-ramps/off-ramps services for crypto trading, individuals within China still find ways to engage in crypto trading activities.
Thank you for reading, until next time.
About the author
In the innovative blockchain, crypto & digital asset ecosystem, Asia is the other side of the coin. Blockchain & Crypto Asia, which covers exclusively blockchain and crypto & digital asset developments in Asia, including regulation, investments, and company highlights, helps you stay on top of what is going on in the Far East. The curated content is selective and serves as information, and personal views only, not investment advice.
I am the co-founder of Kee Global Advisors. Please email me with any ideas or thoughts. I’d love to hear from you! You can also follow me on Linkedin and Twitter.