UBS extends crypto ETF access to clients in Hong Kong

OKX Middle East Fintech FZE, the Dubai-based subsidiary of cryptocurrency exchange OKX, announced on Tuesday that the company has successfully obtained a Virtual Asset Service Provider (VASP) license from the Dubai Virtual Assets Regulatory Authority (VARA), signaling its entry into the Middle East market.Photo by David Rodrigo on UnsplashNon-operational licenseThis newly acquired license positions OKX Middle East to offer spot services and spot pairs to institutional and qualified retail customers in the region. However, it should be noted that the operational aspect of the license is pending. The company stated that it will remain non-operational until all remaining conditions and select localization requirements are fully satisfied, a process anticipated to conclude in the coming weeks. Once operational, OKX Middle East will have the green light to provide regulated VASP services, facilitate AED deposits and withdrawals and introduce spot trading pairs. The move, outlined in a blog post published by the company, comes months after the subsidiary received a preparatory license from VARA, underlining its commitment to complying with regulatory standards and expanding in the Middle East. Rifad Mahasneh, the general manager for the MENA Region at OKX, expressed optimism about the region's potential, stating: "The MENA region holds immense potential to become a hub of excellence for Web3 and virtual assets. We eagerly anticipate the chance to further enhance the already flourishing ecosystem throughout the region." Global hubThis strategic move aligns with the United Arab Emirates' (UAE) goal to establish itself as a global hub for the cryptocurrency industry. VARA, formed in March 2022, was tasked with regulating the emerging virtual asset sector in Dubai. The regulatory framework gained momentum when Sheikh Mohammed bin Rashid Al Maktoum, Dubai's prime minister and ruler, approved a new virtual assets law in March 2022, providing a legal foundation for the crypto industry in the city. Dubai's proactive stance towards regulating the cryptocurrency industry has attracted several major players, including Crypto.com, Ripple, Binance and Bybit, all securing crypto licenses from Dubai's regulator. OKX Middle East joins the likes of TOKO FZE and Trek Labs Ltd FZE in obtaining a license for exchange services. Tim Byun, the Global Head of Government Relations at OKX, emphasized the significance of this license in the company's journey towards a trustless system. "This license was a crucial step for OKX as we move from a trust-based system to one that is trustless and empowers users to take control of their financial future," he stated. Byun expressed excitement about contributing to the development of Dubai's crypto and Web3 ecosystem, highlighting the importance of the market. It's noteworthy that OKX, already regulated in the Bahamas, currently restricts customers from the United States due to regulatory issues. The expansion into the Middle East represents a strategic move for OKX to tap into the growing crypto market in the region and aligns with the broader trend of cryptocurrency exchanges expanding their global footprint. 

Terraform Labs civil trial proceeds with confidential filingsSingaporean blockchain development firm Terraform Labs, the creator of the failed Terra blockchain protocol, has reached an agreement on a protective order in their ongoing civil case with the United States’ Securities and Exchange Commission (SEC).Photo by Thomas Habr on UnsplashData shielded from public disclosureThe decision, sanctioned by the U.S. District Court Judge Jed Rakoff in the Southern District of New York on Wednesday, ensures that materials marked as confidential by the involved parties will remain shielded from public disclosure. The court is obligated to seal any discovery filings labeled confidential ahead of the trial.Judge Rakoff conveyed his likelihood of denying requests to unseal these confidential documents, although the order did not delve into the specific rationale for maintaining their confidential status beyond citing “good cause.” The finalized agreement on this protective order took place on Dec. 18, with legal representatives from both the SEC and Terraform Labs, including co-founder Do Kwon, giving their consent. Kwon, presently detained in Montenegro, faces potential extradition to the United States or South Korea.Pivotal momentThe depegging of Terraform’s stablecoin TerraUSD (UST) from the U.S. dollar marked a turning point in the cryptocurrency sector. This event is believed to have significantly contributed to the crypto market downturn in 2022, as it had a knock-on effect on countless other crypto businesses and platforms that were over-exposed to the flawed algorithmic currency.That chain of events led to the SEC taking action after the fact. However, it has subsequently also pursued a much criticized “regulation by enforcement” policy relative to the crypto sector. To that end, the Commission has pending cases against Coinbase, Ripple, Kraken and Binance, among others.In February, the SEC accused Terraform Labs and Do Kwon of conducting a multi-billion dollar crypto asset securities fraud by offering and selling unregistered securities. As proceedings have unfolded, both Terraform and the SEC have traded unsuccessful attempts to obtain summary judgment.Far-reaching consequencesThe ongoing SEC vs. Terraform civil case carries potential far-reaching consequences in terms of legal precedents within the cryptocurrency sector. In a separate ruling in August, the court allowed Terra to issue subpoenas to FTX entities as part of FTX’s bankruptcy proceedings. Judge Rakoff, in November, accepted confidential materials from Jump Crypto Holdings for discovery in this case.Troubled crypto lender Genesis Trading has also been tangled up in the proceedings with the courts directing it to comply with a subpoena initiated by Terraform Labs. The outcome of this case is poised to offer essential legal guidance for numerous companies operating in the crypto space.The SEC’s regulatory approach toward cryptocurrency firms in the United States has been subject to considerable debate and criticism. The commission’s alleged “regulation by enforcement” strategy, especially in dealings with major players in the crypto industry, has drawn accusations.While many in the U.S. have been unhappy with “regulation by enforcement,” the upside is that over the longer haul, the courts will be able to eventually furnish the regulatory clarity that the SEC refuses to provide. The ongoing scrutiny of regulatory approaches and the outcomes of cases like Terraform Labs vs. SEC will undoubtedly shape the future legal landscape of the cryptocurrency industry.

The Stacks Asia DLT Foundation, an organization associated with the Stacks Bitcoin layer-2 network, has become the first Bitcoin-based foundation to establish itself within, and be recognized by, the Abu Dhabi Global Market (ADGM). ADGM is a free zone and international financial centre located on Al Maryah Island within the capital of the United Arab Emirates (UAE). In a press release published on April 28, the foundation set out that it has established itself within the ADGM in an effort to further grow the adoption of the Bitcoin layer-2 network within Asia and the Middle East, while leveraging the positive regulatory environment that has been established by the ADGM with regard to distributed ledger technology (DLT).Photo by Joshua Woroniecki on UnsplashAttracting DLT foundationsThe ADGM has played a significant role in positioning the UAE as a go-to location for crypto startups and projects. The Berlin-based IOTA Foundation, developer of the IOTA DLT project, was among the first to establish a foundation within the ADGM to promote use of its network in the Middle East region back in November 2023.Since then, others have followed. In 2024 DLT foundations were established related to blockchain projects such as Kaia, Aptos and Beam. Last month DeFi protocol project NEOPIN announced that it had established a DLT foundation within the ADGM.  The free zone has proven popular not just among DLT foundations, but among crypto startups too. Projects such as Polygon Labs, Chainlink Labs and TON have established a presence there. Regulatory frameworkThe ADGM has its own regulator, the Financial Services Regulatory Authority (FSRA), and it established a framework for blockchain foundations in 2023. In establishing the Stacks Asia Foundation within the ADGM, the project would have had to register as a DLT Foundation, while meeting all local legal and regulatory requirements.Kyle Ellicott, interim Executive Director of the Stacks Asia DLT Foundation, commented on the development, providing an insight into why the ADGM was chosen:”We chose to establish our presence in ADGM because of its unparalleled commitment to fostering innovation in the blockchain space. Their forward-thinking approach to policy-making aligns perfectly with the Stacks ecosystem’s history of creating pathways for Bitcoin builders.”  Bitcoin programmabilityThe foundation asserts that it will play a “pivotal role” in forging the future of Bitcoin programmability and its adoption in that respect within Asia and the Middle East.  Referring to Bitcoin while speaking at the Abu Dhabi Digital Assets Forum, Ellicott said that “the once sleepy asset, seen only as a store of value, is now yielding with Layer 2s," through Stacks Bitcoin (sBTC), a 1:1 Bitcoin-backed asset hosted on the Stacks blockchain network. Stacks believes that the next wave of growth for Bitcoin will come through Bitcoin layer-2s. The project claims that unlike wrapped Bitcoin (wBTC), sBTC doesn’t rely on centralized intermediaries. The asset has been designed to extend Bitcoin’s utility, enabling Bitcoin-adjacent DeFi applications and smart contracts. While the project highlights the importance of Bitcoin layer-2 going forward, back in February, Stacks co-founder Muneeb Ali forecast that a shakeout of Bitcoin layer-2 projects will occur, with only a handful of such projects surviving over the course of the next three years.