Public Confidence in Crypto Wanes in Hong Kong Amid JPEX Scandal

The Asia Web3 Alliance Japan, an agency that regards itself as a bridge between the Web3 ecosystem in Asia and Japan’s broader business sector, has reached out to the Securities and Exchange Commission in the United States with a view towards establishing a strategic collaboration.Photo by Clement Souchet on UnsplashFocus on Web3 regulatory innovation & tokenizationThe President of the organization, Hinza Asif, wrote to SEC Crypto Task Force Chairperson and SEC Commissioner, Hester Peirce, on the subject, on March 25. The letter, subsequently published by the SEC, sets out a proposal that centers on a strategic U.S.-Japan partnership relative to Web3 regulatory innovation and tokenization. The Japanese agency, which has set out cross-border synergy as one of its objectives, calls for collaboration between Japan’s Financial Services Agency, the Japanese Ministry of Economy, Trade and Industry and the Bank of Japan with the U.S. regulator. The Alliance proposes that the goal of that partnership would be the establishment of regulatory clarity in respect of the Web3 sector, together with the fostering of interoperability between a developing Web3 ecosystem in the U.S. and the one that’s developing in Japan. Token classification frameworkDelving deeper into proposal specifics, Asif sets out the formation of a harmonized token classification framework as a key objective. The proposal suggests that a distinction needs to be made between tokenized securities, utility tokens and non-security digital assets.  The alliance believes that right now, token classification is unclear, with projects struggling to understand what category their token falls within from a regulatory perspective. There’s a lack of token offering frameworks. While it sees that further work is required, the Asia Web3 Alliance Japan is encouraged by progress made by the SEC’s Crypto Task Force in identifying security categories. With this cross-border collaboration, the Japanese crypto advocacy group believes that there is an opportunity to achieve regulatory interoperability on an international basis. That would facilitate compliant cross-border token issuance. On that basis, the alliance suggests that standards be developed such that regulatory consistency is achieved internationally when it comes to items such as digital asset trading, custody and token issuance. The proposal sets out a need for reciprocal disclosure requirements between the two jurisdictions where cross-border token issuance is concerned. It advocates for mutual recognition of what it terms “compliant tokenized offerings.” Bringing safe harbor to JapanAnother focus area contained within the proposal is the suggestion of a need to implement a safe harbor approach in Japan for early-stage token projects in line with what has been put forward in the U.S. Peirce first put forward a token safe harbor proposal in the U.S. in 2020. It sets out to provide exemptions over a defined initial period for certain token issuances. The idea behind it is to enable these early-stage projects to innovate and mature without getting bogged down in a regulatory quagmire. The establishment of a U.S.-Japan Web3 regulatory roundtable is another strand contained within the proposal. This would provide a mechanism for ongoing dialogue between stakeholders such as regulators, industry leaders and legal experts.

DWF Labs Enters Into Strategic Partnership with TRONDWF Labs, a Singapore-headquartered global digital asset market maker and Web3 investment firm, has announced a strategic partnership with TRON, the leading blockchain network focused on decentralizing the Internet through decentralized applications (dApps).Photo by Ketut Subiyanto on PexelsProviding liquidityThe partnership was announced via a press release published on Tuesday. As part of this collaboration, DWF Labs has become a liquidity provider for TRON, aiming to strengthen the ecosystem support of the blockchain.Andrei Grachev, the Managing Partner of DWF Labs, expressed confidence in the TRON ecosystem, highlighting its impressive adoption in the Web3 space. Grachev stated: “TRON stands as one of the fastest-growing dApps ecosystems in the space at the moment, and the consistent rollout of innovative tools and services proves that TRON has a leading role in paving the trail in blockchain.” He further emphasized DWF Labs’ commitment to supporting the ecosystem through additional investments in the near future.DWF Labs, known for its active support and investments in Web3 protocols, had previously allocated $15 million to the Web3 Industry Recovery Initiative, led by Binance Labs, to aid struggling protocols in the industry’s recovery. The company has also formed strategic partnerships with other prominent players in the crypto industry.Global market makerDWF Labs, as a global digital asset market maker and multi-stage Web3 investment firm, supports portfolio companies throughout various stages, from token listing to market making to OTC trading solutions. With offices in multiple locations worldwide, including Singapore, Switzerland, the United Arab Emirates (UAE), Hong Kong, South Korea, and the British Virgin Islands (BVI), DWF operates as an affiliate of Digital Wave Finance (DWF), known for its proprietary technology in high-frequency trading and consistently ranking among the top 5 trading entities by volume in the cryptocurrency world.The firm has been on a spending spree in recent months. In April, it invested $10 million into Singapore-based payments provider Alchemy Pay. In the same month, it led a Series A funding round into Crypto GPT, an AI-powered blockchain platform. A $60 million investment in layer one blockchain EOS followed.A spokesperson for TRON expressed delight in partnering with DWF Labs, acknowledging their expertise and excellence in further strengthening the TRON ecosystem. Together, the aim is to advance TRON’s vision of a decentralized future, empowering decentralized commerce and community for every individual worldwide.By joining TRON as a liquidity provider, DWF Labs intends to contribute to the growth and development of the TRON ecosystem. This partnership aims to enhance the accessibility of the blockchain network for all TRON users and community members.TRON, founded in September 2017 by Justin Sun, has achieved significant milestones since the launch of its Mainnet in May 2018. Notably, the integration of BitTorrent, a decentralized Web3 services pioneer with over 100 million monthly active users, into the TRON ecosystem in July 2018. TRON has gained significant traction, with over 166.5 million total user accounts, more than 5.85 billion total transactions, and over $11.52 billion in total value locked (TVL) as of June 2023, according to TRONSCAN.

The Securities and Exchange Commission (SEC) of Thailand has initiated legal proceedings against Akarlap Yimwilai, the former director and CEO of Zipmex Thailand. Failure to disclose vital informationThe Commission set out its allegations against Yimwilai in a statement published to its website on Thursday. The allegations revolve around Yimwilai's purported failure to disclose vital information during his tenure, resulting in financial losses for Zipmex customers. According to the SEC's investigation, Yimwilai allegedly transferred cryptocurrency from Zipmex Thailand's wallets to overseas digital wallets without prior disclosure to customers.Photo by Olivier Darny on Pexels Unauthorized digital asset movementsThe SEC's findings indicate that customer assets held in Zipmex Thailand's Z Wallet were moved into overseas digital wallets before any official announcement regarding changes in terms and conditions. This conduct, the regulator asserts, contradicts the information provided by Zipmex Thailand, constituting fraudulent misrepresentation. Yimwilai served as CEO of Zipmex Thailand from August 2018 to November 2023, as per his LinkedIn profile. This deceptive action misled users regarding the security of their assets, the SEC claims, prompting the Commission to charge him with violating Section 82 of the Digital Asset Business Operation Act B.E. 2561. The SEC's accusations extend to Zipmex Thailand's submission of inaccurate reports on customer assets and violations of regulatory requirements. The regulator contends that the reports submitted by Zipmex Thailand were inconsistent with independently verified information. Inviting further legal actionIn response to these allegations, the SEC has forwarded charges against Yimwilai to the Office of the Public Prosecutor (OPP) for further legal proceedings. The SEC has also filed a formal complaint against Yimwilai with the Office of the Provincial Crime Suppression Division, indicating a pursuit of additional legal action. The determination or otherwise of legal liability will be a pivotal step in this process, emphasized by the SEC. Zipmex Thailand, a subsidiary of Singapore-based Zipmex under the leadership of Marcus Lim, obtained approval to operate from the Ministry of Finance and SEC in 2020. The company reportedly came under scrutiny from financial regulators over its acquisition by V Ventures in 2023.  V Ventures backed out of the $100 million buyout of the company last year, which would have included the return of customer deposits. It claimed that Zipmex had not lived up to the terms of the buyout contract.On Feb. 2, the Thai SEC directed Zipmex to temporarily suspend its digital asset trading and brokerage services, granting the firm a 15-day period to adhere to regulatory guidelines. Earlier reports had highlighted Zipmex's application for court protection amidst a wave of bankruptcies among crypto lenders. In November 2023, Zipmex proposed a restructuring plan to reimburse creditors at $0.30 on the dollar, encountering resistance from key stakeholders. The initial offer stood at three cents on the dollar, with the potential to increase to 30 cents in the event of optimized capital recovery.