Hana Securities to Accelerate Security Token Platform Development

Katsunobu Katō, a Liberal Democratic Party politician and Japan's Minister of Finance under Prime Minister Shigeru Ishiba's government since October 2024, has said that cryptocurrency assets can play a role in a diversified investment portfolio. Katō made the remarks while speaking at an event that was held in Tokyo related to the subject of crypto assets on Aug. 25, according to Bloomberg. Katō stated:''Crypto assets run the risk of high volatility, but if an appropriate investment environment is created, they can become targets for diversified investment.''Photo by JJ Ying on UnsplashGrowing crypto user baseKatō acknowledged that there is a growing user base in Japan related to digital assets. With that, he intends to work towards the provision of a healthy trading environment in Japan for stakeholders within the digital assets sector. The finance minister added that he has been trying to balance regulation with a need to leave the digital assets sector with sufficient freedom so as to enable the development of innovation. Crypto tax reformIt emerged over the weekend that the Japanese financial regulator, the Financial Services Agency (FSA), intends to include tax reform measures in respect of the crypto sector in 2026 tax revision proposals that it will bring to the Japanese government. It’s expected that the proposals, scheduled for submission by the end of this month, will call for a separate taxation category for digital assets and the implementation of a flat 20% tax rate. Under Japan’s existing tax regimen, crypto trading gains must be reported under the categorization of “miscellaneous income,” with those gains subject to tax rates of up to 55%. The move would bring taxation on crypto trading gains in line with the tax treatment that’s currently in place for equity trading gains. Equities have been given their own category and are taxed at a flat rate of 20%. Reclassifying cryptocurrenciesAdditionally, the FSA plans to propose legislation next year that would result in the reclassification of cryptocurrencies, removing them from their current treatment as a means of payment under the Payment Services Act. The regulator wants crypto to come under the Financial Instruments and Exchange Act, reclassifying it as a financial product. Katō has outlined his party’s commitment to the consideration of reviewing crypto asset taxation. That item was incorporated into his government’s tax reform plan for 2025, while the Japanese cabinet approved a proposal to amend the Payment Services Act back in March. As part of plans to have digital assets categorized as financial products, the FSA is also understood to be interested in broadening the scope of insider trading restrictions. Kato’s remarks are being interpreted as positive for the crypto sector. According to International Monetary Fund (IMF) data, Japan is the world’s fifth-largest economy, with a gross domestic product (GDP) exceeding $4.1 trillion.Source: World Economic Outlook (April 2025)In further positive news for the sector in Japan, it was reported on Aug. 18 that the FSA is likely to approve the issuance of JPYC, a Japanese yen-backed stablecoin, over the course of the coming months.

Illicit Crypto Activities Estimated to Have Surpassed $100 Billion in S.E. AsiaA recent analysis by blockchain analytics firm Bitrace has found that over $100 billion worth of digital currency has been used in illicit crypto trading activities in Southeast Asia.Photo by Bermix Studio on UnsplashThe firm provided details of its analysis via X (formerly Twitter) on Monday. The data underscores the extensive scope of unlawful activities involving cryptocurrencies across Southeast Asia. The analysis further revealed that illicit activities involve fraudulent schemes, online gambling, and money laundering.Misuse of digital asset innovationSome of the key characteristics of digital assets include the ability to maintain anonymity, decentralization, and borderless transactions, which are generally considered positive attributes. However, the very nature of decentralized cryptocurrency means that nobody dictates who uses it or the purpose for which someone decides to use it. With that, these characteristics have rendered illegal undertakings not only more covert but also facilitated expedited transfers of pilfered resources.The silver lining, however, rests in the inherent transparency of blockchain ledgers. This quality has enabled Bitrace’s team of encryption analysts to trace funds implicated in illicit ventures through intensive on-chain analysis.Key insightsThe Bitrace research points towards the following key insights:Prevalence of Tether (USDT): The use of USDT has gained prominence in both illicit activities and gambling operations throughout Southeast Asia, with a staggering sum of over 115 billion USDT recorded in 2022 alone.Shift to Top Trading Platforms: USDT is observed to migrate from unlawful platforms within Southeast Asia towards top-tier trading platforms. Particularly favored by operators and gamblers, a significant proportion hails from the Chinese demographic, consistently gravitating towards specific exchanges.Inflow into Trading Platforms: A noteworthy development emerges as over 14.6 billion USDT prepares to traverse into trading platform accounts. The mounting risk factor diffuses across an expanding spectrum of addresses and platforms.Likely consequencesIf this blockchain analysis is found to be accurate, there are likely to be ramifications for all projects operating in the digital assets, DeFi and Web3 space. It comes at a time when the focus on the regulation of crypto-related businesses is more intense than ever before.Anti-Money Laundering (AML) and Know Your Transaction (KYT) legislation are cornerstone financial services regulations that have been established on a global basis. If these regulations are being flouted, and crypto is being used as a means to circumvent them, there’s a real risk that regulation could be applied heavy-handedly to counteract that threat of widespread illicit activity.Global crypto exchange Binance has faced criticism in this context, with a suggestion in March that its Turkey-based exchange service had been used by an organization connected with militant group Hamas for money laundering and terrorist financing.In a report last week, Binance claimed that it shared information with authorities that led to the capture of senior ISIS members. More such cooperation will likely be necessary to prevent the sector being subject to overzealous regulation.

OKX Follows Path Towards Dubai LicensingSeychelles-headquartered OKX, one of the world’s largest cryptocurrency exchanges, has expressed its intention to seek regulatory approval for operating in Dubai as part of its expansion strategy in the Middle East.With that objective, the company has obtained a Minimum Viable Product (MVP) preparatory license, an interim step on its path towards full licensing. That’s according to a press release published on Thursday.Tim Byun, OKX’s Global Head of Government Relations, emphasized the growing trend of regulation within the industry. In an interview with Reuters, Byun stated: “We would like to get ahead of that curve and be regulated in a sound manner.” The move comes in the wake of recent legal action taken by the Securities and Exchange Commission (SEC) in the United States against Binance and Coinbase, two of the largest crypto exchanges, for alleged breaches of SEC rules.Photo by Marcus Herzberg on PexelsSwitching to DubaiByun believes that the SEC’s actions will compel more market participants to seek out innovative regulators such as Dubai’s Virtual Asset Regulatory Authority (VARA).To support its expansion plans, OKX intends to hire 30 staff members following the opening of an office last month in the Dubai World Trade Center, strategically located in the business and financial hub of the United Arab Emirates.Byun further explained that by expanding its services from Dubai to jurisdictions like Saudi Arabia or Bahrain, where no domestic regulatory framework is in place, the local populations would benefit significantly from OKX’s regulation under an international regulator.Following Bahamian regulationCurrently regulated in the Bahamas, OKX does not allow customers from the United States to utilize its platform due to regulatory concerns. Following the collapse of FTX in November of last year, the Bahamas has suffered reputationally.It’s seen as a jurisdiction with much looser regulation and as the FTX debacle demonstrated, one that proved to be totally ineffective in preventing the epic fraud that occurred in that instance.Effective regulatory frameworkIn contrast, Dubai and the United Arab Emirates (UAE) in general seem to be making a much better effort towards a workable yet effective regulatory framework. Established in March 2022, VARA serves as the regulatory authority overseeing the burgeoning virtual asset sector in Dubai, excluding the Dubai International Financial Centre financial free zone. The United Arab Emirates has been actively working towards positioning itself to become a global crypto industry hub.No company has yet obtained a license for VARA’s full market product (FMP) stage, which would grant permission to serve retail clients. Byun revealed that OKX intends to apply for such a license.Byun concluded by expressing OKX’s willingness to be regulated and licensed in jurisdictions that adopt a balanced, clear, and transparent approach to the industry. The exchange is committed to operating within frameworks that prioritize investor protection and promote market integrity.