Ground X Teams Up with Oasys for Digital Wallet and SDK Collaboration

Tether Critics Point to Previous Chinese Securities BackingUSDT stablecoin issuer Tether (USDT) has long faced persistent scrutiny and criticism due to the lack of transparency surrounding the assets backing their digital currencies. The latest allegations come in the form of a report by Bloomberg on Friday suggesting that the world’s largest stablecoin was once backed by securities issued by Chinese companies.Photo by Manuel Joseph on PexelsNYAG releases documentsThese findings were based on documents made public by the New York Attorney General (NY AG). The documents disclosed that Tether had listed securities issued by China’s state-owned Industrial and Commercial Bank of China, China Construction Bank, and Agricultural Bank of China as part of its reserves backing the USDT stablecoin.Rumors about USDT’s exposure to Chinese securities have circulated for a number of years. In 2021, a Bloomberg research report revealed that Tether’s reserves reportedly included billions of dollars in short-term loans to China-based companies, as well as a significant loan to the collapsed crypto lender Celsius Network.However, in February 2021, Tether reached a settlement with the NY AG’s office over accusations of providing misleading information about its reserves and losses. To address these concerns, Tether handed over documents such as letters, bank accounts, reserve holdings, and wallet addresses through the law firm Steptoe.Attestation reportTether’s latest attestation report for Q1 2023, released on May 10, offered further details about its reserves. According to the report, Tether’s reserves were valued at $81.8 billion at the end of the quarter, a significant increase from the earlier period of $14.8 billion. These reserves consisted of $53 billion in US Treasuries, $1.5 billion in Bitcoin, and $5.3 billion in loans described as “over-collateralized.”The disclosure of Tether’s previous backing by Chinese securities adds another layer of complexity to the stablecoin landscape, raising questions about the risk exposure and potential impact on the stability of these digital assets. Using Chinese commercial paper to back a US dollar stablecoin is a risky endeavor.It raises the same issues as we’ve seen with the plethora of crypto lenders that went bankrupt in 2022. In those cases, they were using customer money to speculate and turn a profit. That’s fine when it works but when it goes wrong, it is customers who suffer. In its defense, Tether has stated that it only held A1 rated banking sector Chinese commercial paper in 2022 in state-owned Chinese companies like Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., and Agricultural Bank of China Ltd. It reduced this exposure to zero later that year.With the cryptocurrency community and regulators seeking greater transparency and accountability, the industry is likely to face increased scrutiny and calls for enhanced regulations to ensure the integrity of stablecoin operations moving forward.As regulators continue to assess and navigate the evolving crypto market, it remains to be seen how the industry will address these concerns and establish clearer guidelines for stablecoin issuers to ensure the trust and confidence of market participants.

Gulf Binance Secures Thai Digital Asset LicenseBinance, one of the world’s leading cryptocurrency exchanges, has secured a digital asset operator license in Thailand, paving the way for the launch of a new crypto exchange and broker. The license, granted by the Ministry of Finance of Thailand and overseen by the Southeast Asian country’s Securities and Exchange Commission (SEC), ensures that the upcoming platform will operate in compliance with regulatory requirements.Photo by Markus Winkler on UnsplashLicense awardThe license was awarded to Gulf Binance, a joint venture between Binance and Gulf Innova Co., Ltd., a subsidiary of Gulf Energy Development PCL. It marks a significant milestone in Binance’s expansion efforts. The partnership was initiated through a memorandum of understanding signed in January 2022, as both parties recognized the potential of establishing a digital asset exchange in Thailand.Richard Teng, the head of Asia, Europe, and MENA at Binance commented on the development: “By harnessing Binance’s expertise together with Gulf’s established local presence and network, Gulf Binance aims to showcase the full potential of blockchain technology to meet the needs of Thai users. Local users can expect access to a trusted and regulated service that prioritizes user security alongside compliance with local regulations.”Combined expertiseGulf Innova, as a prominent player in the Thai business landscape, brings extensive expertise and experience in the digital asset trading sector to the joint venture. The conglomerate, headed by billionaire Sarath Ratanavadi, operates in various industries, including energy production, telecommunications, and digital businesses.By combining Binance’s unparalleled growth and expertise in the digital asset space with Gulf’s established presence and knowledge in Thailand, the partnership aims to create a powerful synergy that drives innovation, fosters growth, and provides exceptional value to users in the digital asset ecosystem.Q4 launchThe new crypto exchange is expected to commence operations in the fourth quarter of 2023, although further details about the platform will be disclosed closer to the launch.Often criticized for its opaque structure, Binance is showing renewed commitment to transparency and regulatory compliance. As regulatory frameworks are put in place in varying jurisdictions, global crypto businesses are having to change corporate structures in order to meet these changing requirements. That’s evidenced by Binance’s Thai joint venture, its launch of a separate corporate entity in the form of Binance Japan and a similar move by crypto exchange BitMEX in Hong Kong.Thailand has emerged as a significant cryptocurrency hub in Southeast Asia, with its capital city, Bangkok, ranked 10th globally in The Crypto Readiness Index published by Recap, a cryptocurrency tax software company. Despite the ban on cryptocurrencies as a payment method, Thailand continues to flourish as a hub for trading and investment activities in the crypto space.That ban on cryptocurrency payments, implemented by the SEC in April 2022, aimed to safeguard the stability of the financial system and mitigate potential risks to the economy. The SEC identified price volatility, cyber theft, and personal data leakage as concerns associated with cryptocurrencies. However, the regulatory measures did not impede trading or investment activities, allowing the crypto industry to thrive.Chainalysis, a leading blockchain analysis company, ranked Thailand 8th in its Global Crypto Adoption Index for 2022, surpassing countries like Russia, China, Nigeria, Turkey, Argentina, and the UK. This recognition highlights Thailand’s progressive stance toward digital assets and its growing adoption within the country.

SC Ventures cues up $100M crypto startup investment vehicle in UAESC Ventures, the Singapore-headquartered fintech investment arm of British financial services giant Standard Chartered, is set to forge a “Digital Asset Joint Venture” investment company in the United Arab Emirates (UAE) in collaboration with Japanese financial giant SBI Holdings.Photo by ZQ Lee on UnsplashBroad spectrum of crypto sector investmentThe CEO of SC Ventures, Alex Manson, outlined the joint venture’s strategic objectives in a press release published from Dubai on Thursday. Manson emphasized a focus on making strategic and minority investments in crucial areas such as market infrastructure, risk management, compliance tools, DeFi, tokenization, consumer payments and the metaverse.SBI Holdings has been collaborating quite a bit with Standard Chartered when it comes to the digital assets space over the course of the past year. It has invested in Standard Chartered subsidiary company Zodia Custody, a digital assets custodian. Subsequently, Zodia Custody has gone on to launch its services in Dubai, and in September, the company launched its services in Singapore.Meanwhile, SBI is similarly invested in Standard Chartered subsidiary Zodia Markets, an exchange and brokerage platform which recently received approval to trade in the UAE as a broker-dealer. A report by Nikkei Asia last month outlined that Standard Chartered is very much making a concerted effort to muscle its way into the Asian crypto space.Speaking at RippleSwell, an event held in Dubai earlier this week organized by blockchain company Ripple Labs, Zodia Custody CEO Julian Sawyer stated:“Blockchain is the future, tokenization is the future. It’s a question of how we get there and what speed we do that.”Building out a regional hubThis recent partnership comes as the UAE works towards strengthening its position as a fintech hub, leveraging improved infrastructure and a local talent base. Despite its roots in the UAE, the joint venture aims to explore opportunities within the global digital asset ecosystem. Manson highlighted the commitment to broader exploration beyond the local market, indicating a global perspective in navigating emerging opportunities.This development follows Standard Chartered’s earlier memorandum of understanding with the Dubai International Financial Centre in May. This agreement granted the bank approval to extend digital asset custody services to institutional clients on a global scale.While deeply entrenched in the crypto custody business, Standard Chartered is also actively engaging with the digital economy’s broader facets. In June, the bank partnered with PricewaterhouseCoopers China to produce a white paper on applications for central bank digital currency in the Greater Bay Area of China, encompassing Guangdong province, Hong Kong and Macao.Both SBI and Standard Chartered are collaborating with the Monetary Authority of Singapore (MAS) in a project that seeks to build a comprehensive framework for the provision of interoperable and open networks for tokenized digital assets.This multifaceted approach positions Standard Chartered as a key player navigating the dynamic intersection of traditional finance and the evolving digital landscape. Market reaction to this recent development has been positive with one crypto sector participant stating:”Excited to see Standard Chartered expanding its services to accommodate the growing demand for crypto custody, especially in the UAE where the regulatory environment appears to be more favorable. This move could pave the way for increased institutional adoption of Bitcoin and Ethereum.”