AIITONE Partners with UAE’s Royal Office to Boost Fintech Industry in Asia

Report Reveals Global Trends and Online Discourse on Crypto Travel RuleCODE, the only Travel Rule solution provider in South Korea, together with blockchain consulting firm Catalyze Research, published a report that sheds light on global trends in Travel Rule legislation and popular online keywords associated with the Travel Rule. The Travel Rule is a set of guidelines that virtual asset service providers (VASPs) and financial institutions are obligated to observe in order to counteract money laundering and terrorist financing. These guidelines require these entities to share information about both the sender and the recipient of cryptocurrency or financial transactions.The authors of this report gathered online comments related to the Travel Rule from January 1, 2019 to July 31, 2023. They conducted this analysis across news outlets, media platforms, online forums, and various social media channels, encompassing over 200 countries and 150 languages.Photo by Volodymyr Hryshchenko on UnsplashKey events driving discussionsAccording to the report, online discussions concerning the Travel Rule intensified around the time of several key events. These events include the enforcement of the Travel Rule in South Korea in March 2022, the approval of the Markets in Crypto-Assets Regulation (MiCA) and Transfer of Funds Regulation (TFR) by the European Union in April 2023, endorsements of the Travel Rule by G7 countries in Japan in May 2023, and the subsequent implementation of the Travel Rule in Hong Kong and Japan in June 2023.Notably, South Korea, Japan, and France experienced the most substantial surges in Travel Rule-related discussions during the first half of 2023. In South Korea, comments were prompted by a lawmaker’s scandal related to cryptocurrency trading. Meanwhile, Japan and France observed a rise in comments linked to the enforcement of their respective local Travel Rule regulations in the second quarter.Negative market responsesIn addition, markets responded more negatively than positively to the tightening of Travel Rule regulations. The concerns about the market contraction were stronger than the positive outlook on the advantages of preventing money laundering.Lee Sung-mi, CEO of CODE, highlighted the growing significance of Travel Rule solution providers in ensuring the compliance of virtual asset service providers (VASPs) with the regulatory demands of various jurisdictions. Particularly, with the Financial Action Task Force (FATF), G7 nations, and the EU at the forefront, countries have been making noteworthy strides in Travel Rule implementations since 2023, she further noted. Lee emphasized CODE’s commitment to aiding its member VASPs in adhering to Travel Rule regulations by delivering secure and convenient services that align with the evolving global regulatory landscape.

Thailand’s Securities and Exchange Commission (SEC), the independent state agency responsible for oversight and development of the Southeast Asian nation’s capital markets, is seeking public commentary on the updated set of rules it has proposed to regulate initial coin offering (ICO) portals.  In a notice published on its website on July 18, the SEC outlined that it is seeking public comments in relation to the criteria it has established for investor communication and service provision by ICO portals as part of its proposed regulations.Photo by Alin Meceanu on UnsplashEasing knowledge test requirementsThe regulations had been approved in principle last month and put an onus on ICO portals to ensure that retail investors take a knowledge test and pass that test before they are permitted to participate in trading ICO tokens. The current regulations stipulate that retail investors must undertake knowledge tests on an ongoing three-monthly basis. The updated regulations propose that ICO portals conduct suitability tests that are sufficiently comprehensive such that the investor understands the risks associated with any potential ICO-related investment. The SEC stated that the objective is that the investor has “a risk tolerance level appropriate and in alignment with the product risk.” Instead of quarterly knowledge tests, the proposed regulations require suitability assessments to be carried out once every two years. In this way, the commission believes that it will reduce the administrative burden for ICO portals while reducing friction for the investor. It stated: “These proposed requirements are in line with regulatory practices applicable to both securities and digital asset business operators.” Jagdish Pandya, founder of blockchain venture builder BlockOn Ventures, told Decrypt that “Thailand has been a first mover for crypto regulations and the SEC has played a pivotal role in providing all regulated activities and licenses, much ahead of Singapore, Malaysia, Philippines, and Vietnam in South East Asia.”  Moving past previous ICO market failuresPandya added that the proposed suitability tests would protect “amateur investors” from piling into ICOs and losing their funds like in the “old ICO scam era.” ICOs first gained significant popularity in 2017 as the crypto market started to expand. Around $6.2 billion in funding was raised by a broad range of crypto projects in that year. However, a complete lack of regulation at the time meant that the ICO marketplace was laden with outright scams. ICOs were being hyped up in pump-and-dump schemes, with investors losing most, if not all, of their funds as the fraudulent ICO promoters rug-pulled them, abandoning the projects and taking off with the ICO funding. Thailand’s existing ICO portal regulations were introduced in November 2023. The regulations require project promoters to make disclosures with regard to project creditworthiness and risk for debt-like tokens with a predetermined fixed rate of return.  Those promoting infrastructure-backed tokens, which allow the token holder to earn a revenue share from infrastructure projects, are subject to rules regarding items such as due diligence, asset valuation and issuer asset management.

Standard Chartered Muscling Into Asian Crypto SpaceUK banking giant Standard Chartered is making a concerted foray into the Asian crypto sector through its Singapore-based subsidiary, Standard Chartered Ventures.Photo by Kirill Petropavlov on UnsplashTargeting institutional businessThat’s according to a report by Nikkei Asia on Tuesday. It’s believed that the company is positioning itself as a trusted choice for institutional cryptocurrency clients amid the backdrop of digital token price volatility and recent upheavals in the industry. The move will pit the British bank directly against global crypto exchange Binance in key Asian markets, specifically Singapore and Japan.Rene Michau, the Global Head of Digital Assets at Standard Chartered, emphasized what he considers to be the bank’s unique advantage in the digital asset space, stating:“As regulated banks, we have a fairly deep infrastructure around risk, conduct compliance, and the activities that go along with crypto assets.”This solid infrastructure includes established risk frameworks, governance structures, and compliance tools that Standard Chartered is keen to bring into the cryptocurrency sphere, thus making it an attractive option for its clients.Zodia Custody and Zodia MarketsStandard Chartered’s substantial involvement in the cryptocurrency market is channeled through its majority ownership of Zodia Custody, responsible for safeguarding digital assets, and Zodia Markets, a crypto exchange tailored for institutional clients.Both entities have been making significant progress in bringing their offerings to market in recent months. Zodia Custody recently launched its services in Singapore, offering a secure solution for financial institutions to manage their crypto holdings. Last month it launched a crypto staking product targeted at institutional clients.In the same month, Zodia Markets achieved in-principle approval to trade as a broker-dealer in the United Arab Emirates. Zodia Custody has also been successful in the UAE, launching its crypto custodian service in Dubai in May.Japan and SingaporeThis concerted effort by Standard Chartered follows a broader trend where traditional financial institutions, such as DBS Group Holdings in Singapore, are entering the cryptocurrency market, capitalizing on the challenges faced by younger crypto players in proving their credibility.Binance rebranded its Binance Custody unit as Ceffu and expanded its offerings for corporate customers in Singapore. While Binance asserts the independence of Ceffu, the exact nature of their capital relationship remains undisclosed.A parallel competition is unfolding in Japan, where Binance Japan has entered the market and Standard Chartered’s Zodia Custody has formed a joint venture with SBI Digital Asset Holdings, targeting institutional clients.While Standard Chartered has achieved a lot through its crypto-focused subsidiaries in a short space of time, there’s always room for improvement. In June, Hong Kong’s banking regulator singled out Standard Chartered alongside HSBC, appealing to both banking groups to make greater efforts to bank crypto clients within the Chinese autonomous territory, as it looks to compete with Singapore in becoming a regional crypto hub.The cryptocurrency sector has witnessed increased scrutiny as virtual currencies like Bitcoin and Ether have gained popularity. The rise of digital token exchanges, each vying for custody of assets belonging to investors who have embraced cryptocurrencies, has sparked concerns about corporate governance and security.Giants in traditional finance, like Standard Chartered, are stepping in to offer institutional investors a safer path to engage with virtual assets while leveraging the trust associated with established brands.