BIS Collaborates with Singapore’s MAS, Bringing CBDC Pilot to a Close

Japanese Bitcoin treasury firm Metaplanet has opened a U.S. subsidiary company in Florida while also issuing 3.6 billion Japanese yen ($24.7 million) in bonds for the purpose of buying more Bitcoin.Photo by Kanchanara on UnsplashAccelerating the Bitcoin strategyIn an announcement on May 1, the company outlined that it had established Metaplanet Treasury Corporation in Miami, Florida. The firm cited the purpose of the subsidiary as a means through which it can accelerate its overriding strategy of accumulating more Bitcoin. Metaplanet CEO Simon Gerovich commented on X on the rationale behind locating the U.S. subsidiary in Florida, stating:”The reason for choosing Florida is clear: the state is rapidly emerging as a global hub for Bitcoin innovation, corporate adoption and financial liberalization.” Gerovich added that the newly formed company will enhance Metaplanet’s “around-the-clock operational capabilities across time zones.” The Metaplanet CEO sees the development as part of the firm’s evolution as a global Bitcoin treasury company.  $250 million capital raiseThe company stated that it had already established a corporate entity in the British Virgin Islands (BVI), with the U.S. addition enhancing the company’s ability “to respond to market dynamics with speed and precision.”  Metaplanet intends to raise $250 million in funding through the Miami-based entity, having launched it with initial capital of $10 million. It’s envisaged that the U.S. subsidiary can act as a vehicle to attract institutional investment.  Back in March it was reported that Metaplanet was investigating the idea of listing its stock in the U.S. At the time, Gerovich stated that the firm was “considering the best way to make Metaplanet shares more accessible to investors around the world.” As part of that process, Gerovich met with officials from the New York Stock Exchange (NYSE) and the Nasdaq.  In further U.S.-related developments, the company appointed Eric Trump, second son of U.S. President Donald Trump, to its strategic board of advisors in March. Last week, Metaplanet appointed David Bailey, CEO of Bitcoin Magazine, to its strategic board of advisors. Bond issuanceIn a separate development, Metaplanet has issued 3.6 billion Japanese yen ($24.7 million) in 0% ordinary bonds to purchase additional Bitcoin. The company used its EVO FUND as the mechanism through which it issued the bonds.  It has set out a goal of accumulating 10,000 BTC by the end of the year. Currently, the company holds 5,000 BTC. One community member believes that Metaplanet could hit this target as early as July on the basis of ongoing share dilution.Appearing on The Bitcoin Treasuries Podcast earlier this year, Metaplanet’s Director of Bitcoin Strategy, Dylan LeClair, described how prior to adopting its Bitcoin treasury strategy in 2024, the firm was a “zombie” on the Tokyo stock exchange with the pandemic having had a negative impact on the company’s fortunes.  He outlined that the company consolidated and dealt with some debt issues, but at that point it lacked a clear strategy. It then set out to replicate the success of U.S. Bitcoin treasury pioneer, Strategy (formerly MicroStrategy). On May 1 Gerovich posted on X that the company had achieved unrealized gains on Bitcoin exceeding six billion yen ($41.68 million). 

Vauld Implements Key Leadership Changes Amid Bankruptcy ProceedingsFailed Singaporean cryptocurrency lender Vauld has unveiled a comprehensive overhaul of its board structure.Photo by Yibei Geng on UnsplashOngoing restructuringThe platform, which faced financial turmoil leading to its declaration of bankruptcy last year, is introducing fresh leadership to spearhead its restructuring efforts. The move involves the appointment of a new CEO, a creditor representative, and a scheme manager.The current CEO and Co-Founder of Vauld, Darshan Bathija, announced the proposed changes via a post on X (formerly Twitter) on Thursday. He emphasized that the new appointees would take charge of orchestrating a much-needed bailout.The challenges faced by the company through its ongoing bankruptcy proceedings have prompted Vauld to secure court approval for this new organizational scheme. In his social media post, Bathija stated:“Vauld (Defi Payments Pte Ltd) got its scheme of arrangement passed in Singapore courts. As part of the scheme, the current board will be replaced with a new CEO, a creditor representative, and a scheme manager.” Additionally, Bathija noted that the exchange’s customers are actively updating their Know Your Customer (KYC) details.This announcement comes almost a year after Vauld came under scrutiny due to a money laundering investigation. The cloud of suspicion surrounding the firm at the time led to the freezing of assets worth $46.4 million from its domestic operations by Indian authorities.Nexo acquisition failureIn February of this year, the Singapore High Court granted Vauld an extension until March 24 to formulate a comprehensive strategy for repaying its creditors. The extension became crucial after a potential acquisition deal with Nexo fell through. However, despite this reprieve, the exchange was unable to secure a further extension, fueling discussions within the community about the challenge of meeting creditor obligations within a relatively short time frame.In a step to facilitate the resolution of outstanding amounts, the court established a committee of creditors (CoC). This move was prompted by allegations from a faction of creditors that Vauld was impeding communication and implementing unwarranted corrective measures. Notably, the exchange owes more than $2.2 million to these creditors.Vauld has contracted the services of risk and financial advisory firm Kroll as part of the restructuring efforts. In an isolated instance of good fortune, it appears that Vauld creditors are unaffected by a data breach which occurred recently at Kroll, while creditors of the Genesis, FTX, and BlockFi crypto bankruptcy processes have had their data compromised.Charting a path forwardBathija conveyed that more updates regarding the platform’s path forward would follow soon. Vauld’s financial instability can be attributed to several factors, chief among them being the ripple effect of Terra’s downfall. Further complications arose due to economic issues tied to the Celsius Network and Three Arrows Capital (3AC) defaulting on their loans. These cumulative challenges led to Vauld’s operational suspension.Despite this failure and similar issues relative to crypto lender Hodlnaut and 3AC, which were also based in the city state, Singapore continues as a jurisdiction that effectively balances regulatory control with the drive to foster innovation. Its central bank and financial regulator, the Monetary Authority of Singapore (MAS), recently unveiled a comprehensive framework for stablecoins.

Tokyo Government Launches Initiative to Support Security Token BusinessesThe Office of the Governor for Policy Planning under the Tokyo Metropolitan Government made an announcement yesterday regarding its new initiative aimed at promoting the issuance of security tokens.Photo by Ben Cheung on PexelsBlockchain-based security tokensGiven the growing interest in blockchain technology, which allows for decentralized peer-to-peer transactions, various applications have emerged within the financial sector. Notably, blockchain-based security tokens hold significance as they possess the potential to promote retail investments and reshape startup financing. This potential largely stems from the fact that these tokens can be issued in smaller denominations than traditional securities, facilitating direct connections between issuers and investors.Promoting growthIn an effort to broaden this market, the Tokyo government undertakes this initiative to foster the growth of security token issuance. This endeavor is expected to stimulate the development of various use cases for security tokens, as well as facilitate the widespread exchange of valuable expertise and insights into potential challenges within this sector.Financial supportIn accordance with the Financial Instruments and Exchange Act and the Specified Joint Real Estate Ventures Act, the Tokyo government will introduce subsidies for Tokyo-based businesses involved in security token-related activities. This initiative aims to provide financial support to businesses by covering a portion of the expenses associated with token issuance. Eligible expenses that can be subsidized by the government include platform usage, consultation, and system development costs.Under this program, the Tokyo government will offer financial assistance by funding up to half of the project-related expenses, with startups eligible for up to two-thirds. The maximum grant amount per project is set at 5 million yen ($36,000). Businesses can apply for these subsidies starting from May 31, 2023, with the application window remaining open until February 29, 2024. Although applications can be submitted at any point during this period, the window will close once the allocated budget is exhausted.