CryptoQuant and SKT Partner to Launch Blockchain-Powered T Wallet Service

Kazakhstan sets sights on 2024 expansion amid CBDC pilot successKazakhstan’s central bank digital currency (CBDC), the digital tenge, has completed a one-month pilot project, paving the way for significant advancements in business, regulation and technology in 2024.Photo by Nessi Gileva on UnsplashReal-world use through Onay cardThe National Bank of Kazakhstan (NBK) established the National Payment Corporation (NPK) in September. NPK is a dedicated entity that’s responsible for spearheading the launch and development of the digital tenge.At that time, the CBDC pilot phase had advanced to controlled environment use. Global exchange Binance has been actively involved with the project. It supported the pilot by way of its BNB Chain.During the pilot phase, the digital tenge played a pivotal role in providing free school lunches to children in Almaty, Kazakhstan’s largest city. The initiative utilized the local Onay card, initially designed for the transit system and transactions were facilitated by Kazpost, the Kazakh postal system operator.Local banking partnersNPC Chairman Binur Zhalenov became the first person to transact using the digital tenge in November. At the time, it was revealed that Eurasian Bank was one of the local banking participants on the project.Eurasian collaborated with Visa and Mastercard, alongside three other local banks, distributing plastic cards to focus group members. These cards empowered users to make both in-person and online purchases, with the added functionality of cash withdrawals from ATMs.Participating merchants were given the flexibility to accept digital tenge directly or convert them into “non-cash” tenge. The converted funds seamlessly integrated into existing point-of-sale (POS) and QR systems, demonstrating interoperability within and outside Kazakhstan.The success extended beyond local transactions, with further experiments involving cross-border payments via SWIFT, issuance of CBDC-backed stablecoins on platforms like Binance and the Kazakhstan Stock Exchange, tokenization of gold, value-added tax collection through smart contracts and the trial of a “move-to-earn” app.New objectivesWith an eye on the upcoming year, the National Bank of Kazakhstan and the National Payment Corporation (NPC) have set ambitious objectives. Plans include expanding the network of intermediary banks and advancing decentralized finance applications. A primary focus is on enabling offline transactions on a large scale to enhance financial inclusion in regions with limited internet connectivity.Anticipated developments also include increased participation in cross-border payment projects, such as Project mBridge, an experimental multi-CBDC platform being coordinated and developed by the central bank of central banks, the Bank for International Settlements. Regulatory and legislative goals are on the agenda, alongside efforts to enhance the security and processing speed of the digital tenge.While addressing privacy concerns, Zhalenov emphasized in interviews that the digital tenge will not be utilized for user surveillance. Previously, Zhalenov has also alluded to the versatility of the digital tenge due to its programmable nature, citing smart contracts in particular as having great potential.The successful pilot project and the ambitious plans for 2024 position Kazakhstan’s digital tenge as a promising development in the realm of CBDCs, showcasing the central Asian nation’s positive approach to innovation and financial inclusivity.

KDIC Seizes Crypto from Debtors Linked to Losses at Financial FirmsDuring the first half of this year, the Korea Deposit Insurance Corporation (KDIC) tracked the cryptocurrency holdings of 1,075 individuals and debtors responsible for causing losses at financial entities, including savings banks, according to documents obtained by local news outlet Herald Economy, from the office of lawmaker Kim Han-kyu, a member of the National Assembly’s National Policy Committee. From this scrutiny, KDIC identified 29 wrongful cases and proceeded to confiscate cryptocurrencies in 16 of those instances.KDIC is a semi-state body that has been instrumental in tracing and recovering assets from culpable employees at troubled financial firms and debtors in arrears. Meanwhile, methods for hiding wealth have become more sophisticated, typically unfolding behind the curtain.Photo by Georg Bommeli on UnsplashFirst crypto seizureOut of these individuals, 900 had taken out loans of at least KRW 3 billion ($2.2 million) from beleaguered financial institutions, while the remaining 175 were employees of these institutions, held responsible for their failures. This occasion represents the KDIC’s first seizure of virtual assets.Until recently, the KDIC struggled to reclaim hidden assets funneled into cryptocurrency exchanges, given their limited authority to seek documentation. KDIC’s purview mainly extended to requesting information from public institutions, banks, insurance companies, and securities firms. However, KDIC has now found a way to seize crypto assets by investigating the bank accounts linked to these exchanges. In Korea, crypto exchanges facilitating Korean won trades are legally mandated to secure real-name accounts from banks.Call for expanding KDIC’s authorityGiven the evidence of using cryptocurrencies to conceal wealth, many suggest that amendments to the Depositor Protection Act are necessary, enabling KDIC to directly request relevant data from exchanges and recover more hidden assets effectively.Furthermore in August KDIC secured a court order allowing them to liquidate these assets. Following this successful confiscation, the debtors’ cryptocurrencies have been frozen in their wallets, rendering them unresponsive to any market shifts. Discussions are now underway regarding the method of liquidating the debtors’ cryptocurrencies at market value on exchanges. This includes deliberations on whether KDIC will assume ownership of the cryptocurrencies and directly proceed with their sale.In a chat with Herald Economy, Lawmaker Kim emphasized the need for KDIC to have the authority to access information from virtual asset service providers. This would enable them to more effectively retrieve assets from responsible debtors. Kim further stated that such steps would enhance both the efficiency of debt collection and overall market fairness.

OKX Appoints Nomura Portfolio Co as CustodianSeychelles-headquartered OKX, the world’s second-largest cryptocurrency exchange, has partnered with Komainu, a digital asset storage firm backed by Tokyo-based global financial services group, Nomura, to provide digital asset custody services for institutional customers.This collaboration allows institutional users to store their cryptocurrencies within Komainu’s custodian while utilizing the funds for trading on the OKX exchange. The partnership highlights the trend of vertically integrated crypto exchanges adopting practices from traditional finance, employing third-party custodians to segregate operations and mitigate risks.Photo by Karolina Grabowska on PexelsInaugural Komainu clientAs the inaugural client of Komainu Connect, a regulated settlement and custody system for institutions, OKX now offers its customers 24/7 trading with a combination of cold storage, multiparty computation (MPC), and hardware security modules (HSMs). Lennix Lai, the Chief Commercial Officer of OKX, explained that funds deposited in a Komainu custody wallet are transferred to a Komainu collateral wallet, which is then linked to an OKX account. This integration allows for seamless balance mirroring and active trading across OKX’s extensive range of spot and derivatives markets.Asset custody optionalityIn a tweet posted on Tuesday, OKX President Hong Fang wrote: “We are agnostic re how customers want to custody their assets. Third party, platform, self-custody.”Komainu Connect’s collateral wallet, with full transparency to OKX, operates within a tri-party legal agreement involving Komainu as the custodian, OKX as the liquidity venue and provider, and Komainu’s client as the client of OKX. Sebastian Widmann, Head of Strategy at Komainu, elaborated on this agreement, emphasizing how it enables Komainu’s clients to trade directly on the exchange while Komainu handles the settlement requirements. This framework ensures a secure and efficient trading experience for institutional users.While specific details about the volume of assets to be transferred to Komainu were not disclosed, Lennix Lai stated that the amount was “significant” and expected to increase as both firms enhance their institutional product offerings. OKX believes in providing users with a range of solutions, including on-exchange, off-exchange, and third-party balance mirror custody options. By partnering with Komainu, the erstwhile Beijing-based exchange aims to expand its service offerings and cater to the evolving needs of its institutional clientele.Komainu was established in 2020 through a joint venture involving Nomura, digital asset manager CoinShares, and digital asset security company Ledger. The firm operates under regulatory oversight in St. Helier in the Jersey Islands and in Dubai, with offices located in London, Dublin, and Singapore. Its robust regulatory compliance measures and strategic partnerships position Komainu as a trusted custodian within the crypto industry.Market maturationThe collaboration between OKX and Komainu represents a significant development in the maturation of the crypto market. By leveraging Komainu’s custody services, OKX aims to enhance the security and reliability of its platform, mitigating potential risks associated with holding customer assets. This partnership also underscores the growing demand for institutional-grade infrastructure and services in the cryptocurrency ecosystem.As the crypto industry continues to evolve and attract institutional investors, custodial solutions provided by trusted and regulated entities like Komainu are crucial for fostering confidence and facilitating broader participation. The OKX-Komainu partnership demonstrates the convergence of traditional finance practices with the emerging crypto landscape, highlighting the importance of robust custody solutions and risk management frameworks in the digital asset ecosystem.