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Zipmex Thailand halts crypto trading citing SEC complianceTroubled cryptocurrency exchange Zipmex Thailand has recently announced the temporary suspension of digital asset trading until early next year.Photo by Anh Tuan To on UnsplashTrading and deposits suspendedThe decision, outlined by the firm in a Facebook post on Saturday, is attributed to the platform’s efforts in ensuring full compliance with the standards set by Thailand’s Securities and Exchange Commission (SEC).In the Facebook post, Zipmex Limited addressed its customers, stating:“Dear customers, Zipmex Limited would like to ensure the proper and compliant conduct of the company’s business operations in accordance with the criteria set by Thailand’s Securities and Exchange Commission (SEC).”The suspension of digital asset trading and deposits of all types became effective from Nov. 25.Withdrawals remain openDespite the suspension, customers will retain the ability to withdraw Thai baht and digital assets from their Trade Wallet through the website and mobile application until Jan. 31, 2024. However, for digital assets categorized as “Trade Only,” customers are instructed to contact Customer Support for withdrawal. Beyond Jan. 31, 2024, when the withdrawal feature through the website and mobile application is suspended, customers will need to seek assistance from Customer Support.Zipmex Thailand also emphasized that the withdrawal process for digital assets may take between seven to 14 days, requiring customers to provide supporting documents for identity and account ownership verification.As a cryptocurrency exchange headquartered in Singapore and operating in multiple countries, including Thailand, Australia and Indonesia, Zipmex has already fallen foul of Thailand’s SEC. Earlier this year, it was hit with penalties related to allegations of improper use of a digital asset custodian service and the redirection of customers to the Singapore-based exchange, Zipmex Pte, creating a conflict of interest.Financial difficultiesThe exchange has faced financial challenges, including difficulties in repaying creditors after losses incurred from exposure to crypto lenders Babel Finance and Genesis in 2022. A planned $100 million buyout earlier in the year fell through when the buyer, reportedly V Ventures, withdrew from the purchase.Zipmex’s troubles date back to last summer when the exchange halted withdrawals due to volatile market conditions and a liquidity crunch resulting from exposure to the troubled crypto lender Babel Finance. Despite facing financial difficulties, the exchange expressed its commitment to maintaining the integrity of its platform.In August of the same year, Bloomberg reported that Zipmex intended to meet with potential investors and Thailand’s financial regulator to discuss a recovery plan. By November, the platform was in advanced discussions with venture capital fund V Ventures for the sale of a majority stake.Earlier this year, the Thai Securities and Exchange Commission announced an investigation into whether Zipmex breached local rules in its offering of certain digital-asset products. In April, the company filed a request to extend the moratorium period to enable the firm to work towards restructuring. Later that month, it appeared that the V Ventures investment deal had fallen through. By July, the beleaguered firm had sued the investor for breach of contract.The ongoing challenges faced by Zipmex underscore the complex landscape and regulatory scrutiny surrounding cryptocurrency exchanges in various jurisdictions.

Malaysia Ushering in Fifth Digital Asset ExchangeKuala Lumpur-headquartered crypto platform Hata has become the latest entrant in the local digital asset exchange (DAX) business, securing licensing and regulation from the Securities Commission Malaysia (SC).The brainchild of David Low, former Asia Pacific General Manager at Luno, Hata Digital Sdn Bhd, is now the recipient of conditional approval from the SC, enabling it to facilitate cryptocurrency trading once it fulfills the regulator’s stipulated requirements over the next six to nine months. The firm now joins Luno Malaysia, MX Global, Sinegy DAX, and Tokenize Technology to become the fifth regulated DAX to trade within the Southeast Asian country.Photo by Esmonde Yong on UnsplashFirst digital brokerOne interesting aspect of Hata’s approval is that it also marks the first DAX to receive digital broker status from the SC. This unique status allows Hata to display trade orders from other exchanges on its website or mobile application, giving users access to a broader spectrum of trading opportunities.Hata can match its users’ trades with those available on other exchanges or provide them with cryptocurrency prices from these exchanges. However, it is essential that the exchanges Hata collaborates with are licensed by authorities in “competent jurisdictions,” such as the Monetary Authority of Singapore (MAS), and gain approval from the SC.Low shared his vision, stating:“With the goal of challenging the existing norms, we plan to make digital assets investing easier for institutional investors, businesses, and high-net-worth individuals in Malaysia. And we look forward to launching the platform soon.”Luno competitorLow’s departure from Luno adds an intriguing dynamic to Malaysia’s digital asset industry, given his pivotal role in expanding Luno’s presence in Malaysia and Southeast Asia. At the time of his departure, Luno was widely acknowledged to have commanded over 90% of the local cryptocurrency trading market share, with some estimating it as high as 98%.Low is now stepping into the realm of competition with his former colleagues and company, where he had previously invested significant effort and resources to foster growth.Hata boasts two other Co-Founders, Darien Ng, Chief Revenue Officer, and Chong Kwai Kun, Chief Technology Officer, both with extensive expertise in blockchain technology and software development in Malaysia since 2018.Low stated that the “SC’s decision to grant us conditional approval to operate a DAX represents a vote of confidence in us and the digital asset industry. This is a significant milestone for my team and I at Hata, after months of extensive efforts.”One-stop crypto platformHe continued: “Hata wants to enable safe and effortless cryptocurrency access and we look forward to being a one-stop and reliable platform for our customers, with our suite of products and services.”Low emphasized their goal of challenging existing norms, making digital asset investing more accessible to institutional investors, businesses, and high-net-worth individuals in Malaysia.The exchange’s founder also commended the SC’s efforts in expanding the regulated market operator framework to allow DAXs to operate as digital brokers. In addition, Hata has obtained a money broker license from the Labuan Financial Services Authority, reinforcing its efforts to operate as a compliant and secure platform.

Singapore’s UniPass Plays Role in ERC-4337 Vulnerability FixSmart contract wallet provider UniPass and crypto infrastructure firm Fireblocks have successfully addressed a significant vulnerability in the Ethereum ecosystem.Photo by Nenad Novaković on UnsplashAccount abstraction vulnerabilityThis vulnerability, identified as the ERC-4337 account abstraction vulnerability, posed a critical security risk to hundreds of mainnet wallets. The joint effort between Fireblocks and UniPass was detailed in a blog post published to the Fireblocks website on Thursday.This vulnerability, if exploited, could have enabled a malicious actor to execute a complete takeover of the UniPass Wallet by manipulating Ethereum’s account abstraction process. The vulnerability represented a substantial threat to the security of smart contract wallets, as it could lead to unauthorized access and fund drainage.Improving user experienceAccount abstraction, as dealt with via ERC-4337, is a mechanism that introduces a novel way of processing transactions and interacting with smart contracts on the Ethereum blockchain. It allows for a more flexible and efficient handling of transactions, transcending the traditional distinction between externally owned accounts (EOAs) and contract accounts.EOAs are controlled by private keys and can initiate transactions, while contract accounts are governed by the code of a smart contract. When an EOA initiates a transaction with a contract account, it triggers the execution of the contract’s code. Account abstraction introduces the notion of abstracted accounts, which are not tied to a specific private key and can initiate transactions and interact with smart contracts, similar to EOAs.In the context of ERC-4337, an account executing an action relies on the EntryPoint contract to ensure that only signed transactions are executed. Typically, these accounts trust a single audited EntryPoint contract to validate user operations before executing commands. However, the vulnerability resided in the fact that a malicious or buggy EntryPoint contract could potentially skip the validation step and directly call the execution function, bypassing essential security measures.This vulnerability, identified by the two firms, had allowed attackers to seize control of UniPass wallets by replacing the trusted EntryPoint of the wallet. Once this takeover was completed, the attacker could access the wallet and drain its funds.It’s worth noting that the vulnerability posed a threat to several hundred users who had activated the ERC-4337 module in their wallets, making them susceptible to exploitation by any actor on the blockchain. Fortunately, the wallets affected by this vulnerability contained only small amounts of funds, and swift mitigation efforts were successful in preventing further harm.Company mergerEarlier this year, Singapore’s UniPass merged with Chinese wallet provider Keystone to form Account Labs, a company which has been incorporated in Singapore. At the time, Keystone founder Liu Lixin outlined that further developing account abstraction-derived products was the objective of the creation of Account Labs. He stated:“We are on the cusp of a Web3 Account Abstraction revolution. Together, we’ll drive rapid transformation, making the transition from Web2 to Web3 effortless for users. Our goal is to ensure everyone can securely and smoothly manage a decentralized account. We welcome partners to join us in advancing the Web3 account domain.”In furthering that objective, Account Labs announced on Thursday that it had raised $7.7 million in a funding round led by Amber Group, MixMarvel DAO Ventures, and Qiming Ventures.