Gnosis Plans Crypto Visa Card Launch for Singapore and Hong Kong

Bithumb Live Files for BankruptcySouth Korean cryptocurrency exchange Bithumb’s live commerce platform Bithumb Live — an attempt at business diversification — has filed for bankruptcy. The platform entered bankruptcy proceedings last year, brought on by business difficulties and various suspicions of embezzlement involving its CEO.Photo by Melinda Gimpel on UnsplashAccording to legal sources on Monday, the Seoul Bankruptcy Court declared Bithumb Live’s bankruptcy last Monday. The court plans to hold creditor meetings and inspections on November 28 to incorporate creditors’ opinions into the bankruptcy proceedings and assess the status of the company. Major companies like LG Uplus, SK Telecom, SK Magic, and Lotte Card are among the platform’s creditors.Bithumb Live’s backgroundBithumb Live was founded in September 2021 by Bithumb and Bucket Studio, who each invested KRW 6 billion (approximately $4.4 million). Bucket Studio is a content distribution company that gained considerable attention with the global success of the Netflix original series “Squid Game” last year because it holds a 15% stake in Artist Company, an entertainment planning agency co-founded by “Squid Game” lead actor Lee Jung-jae and actor Jung Woo-sung. In particular, Bucket Studio’s CEO Kang Ji-yeon is the sister of Kang Jong-hyun, who is embroiled in allegations related to the ownership of Bithumb.Bithumb and Bucket Studio each hold a 37.5% share of Bithumb Live, making a combined ownership of over 75%. Bithumb Live, led by Kang Ji-yeon, had been established with the intent to create a commerce platform with various features like a metaverse, non-fungible tokens (NFTs), and cryptocurrency payments. After its establishment, it announced that it would challenge its key competitor Naver’s prominent live shopping platform by preparing to sign deals with 15 different companies.Financial hardshipsHowever, the platform hit a roadblock just one year after its establishment and found itself unable to escape financial difficulties. According to last year’s business report, Bithumb Live’s liabilities exceeded its assets by approximately KRW 248 million and the platform recorded a net loss of KRW 10.2 billion. Unable to withstand such losses, it announced an indefinite temporary closure via its internal messenger to employees in October of last year. The employees ended up working only four hours a day, resulting in a more than 50% reduction in working hours. Subsequently, the number of employees, which was 73 in September, plummeted to just four in January of this year, essentially signaling a total stop to business operations. In the first half of this year, Bithumb Live’s net loss amounted to almost KRW 1.1 billion.Management entanglementsOn top of these financial strains, the company was also plagued by Kang Ji-yeon and her brother Kang Jong-hyun’s owner’s risk, which encompassed allegations of embezzlement and misappropriation. In July of this year, Kang Ji-yeon was sent to trial on charges of embezzlement and misappropriation at Bucket Studio. Along with her brother and former Chorokbaem (CRB) Group Chairman Won Young-sik, she was accused of granting call options on convertible bonds held by Bithumb affiliates Vidente and Bucket Studio for free to companies controlled by Won’s children between December 2021 and July 2022, inciting damages worth approximately KRW 58.7 billion to the respective companies. In the process, she was also found to have received KRW 32.2 billion in acquisition payments. Kang Jong-hyun had been detained and on trial since February of this year.Bithumb Live’s largest shareholder, Bucket Studio, is also in a tight spot. Back in June, the Korea Exchange imposed a penalty of three points on Bucket Studio for reversing its disclosure. The company had been penalized five points the previous month after withdrawing its decision to issue convertible bonds. In particular, the studio also recorded an operating loss of KRW 7 billion and a net loss of KRW 195.6 billion last year based on consolidated financial statements. In the first half of this year alone, it suffered an operating loss of KRW 896 million, raising red flags for its management.

Hong Kong Reiterates Web3 Credentials and CommitmentHong Kong is committed to growing the Web3 industry under appropriate regulations, according to government officials.©Pexels/Andrea PiacquadioAt the four-day Web3 Festival, which is the largest Web3 event that the city has hosted since declaring its intention last year to become a digital asset hub, Financial Secretary Paul Chan stated that the stability of the financial system and investor protection should not be damaged, and that appropriate regulations are a must to create a sustainable development environment and a more ideal space for development.DeFi licensing requirementSome attendees were surprised to learn that the Securities and Futures Commission (SFC) believes that decentralized finance (DeFi) platforms for virtual assets need a license under existing rules. Keith Choy, interim head of the intermediaries division at the SFC, stated that people operating or performing DeFi activities should be subject to Hong Kong’s licensing requirements.This means that if Hong Kong really intends to regulate DeFi, it will have a stricter environment than Singapore. The Web3 industry has been closely watching the development of a new regulatory framework for virtual assets in Hong Kong since the city revealed at the end of October its intention to become a cryptocurrency hub. Under new regulations that go into effect in June, cryptocurrency exchanges serving customers in Hong Kong must be licensed by the SFC.10,000 Web3 Festival attendeesThe event attracted more than 10,000 people ahead of the conference, with several big-name speakers and exhibitors looking for new opportunities in the city. OKX and Filecoin were some of the large cryptocurrency firms in attendance, as were traditional tech firms like Tencent Cloud, which had a booth touting its blockchain-related services for corporate clients. Alibaba Cloud was also a co-organiser, along with Amazon Web Services and Hong Kong’s Cyberport.Binance co-founder and CEO Zhao Changpeng (CZ) also dialed in via video for a fireside chat. Last month, the US Commodity Futures Trading Commission (CFTC) sued CZ and Binance over what it alleged was “sham” compliance with domestic regulations. The company has been scrutinized over connections to its local firm Binance.US, which legally is meant to operate as a separate entity. Zhao was not asked and did not address his legal troubles at the conference. However, he did note that Binance is in talks with regulators in many markets.“We are actively engaged with regulators all around the world,” Zhao said. “Many of them are very receptive, some of them are still skeptical, and that’s fine, but we need to engage. We need to have dialogue, we need conversations, and we also need patience.”Singapore comparisonsHong Kong has frequently been compared with Singapore, which had been considered a friendlier market for related activity until Hong Kong’s policy shift. Some attendees had hoped that Hong Kong’s shift would provide some competition for Singapore in the region. “We did see a very obvious trend of people flying to Singapore to make sure their business was part of this space,” said Luke Liu, chief core ecosystem contributor at cross-chain protocol developer Poly Network. “Hong Kong and Singapore can coexist in some sense, but there is definitely a very positive change going on recently because of the Hong Kong policy announcement.”Hong Kong has reaffirmed its commitment to growing the Web3 industry under “appropriate” regulations, with the stability of the financial system and investor protection as a top priority. This has been reiterated during the largest Web3 event in the city since declaring its intention to become a digital asset hub.

OKX Middle East Fintech FZE, the Dubai-based subsidiary of cryptocurrency exchange OKX, announced on Tuesday that the company has successfully obtained a Virtual Asset Service Provider (VASP) license from the Dubai Virtual Assets Regulatory Authority (VARA), signaling its entry into the Middle East market.Photo by David Rodrigo on UnsplashNon-operational licenseThis newly acquired license positions OKX Middle East to offer spot services and spot pairs to institutional and qualified retail customers in the region. However, it should be noted that the operational aspect of the license is pending. The company stated that it will remain non-operational until all remaining conditions and select localization requirements are fully satisfied, a process anticipated to conclude in the coming weeks. Once operational, OKX Middle East will have the green light to provide regulated VASP services, facilitate AED deposits and withdrawals and introduce spot trading pairs. The move, outlined in a blog post published by the company, comes months after the subsidiary received a preparatory license from VARA, underlining its commitment to complying with regulatory standards and expanding in the Middle East. Rifad Mahasneh, the general manager for the MENA Region at OKX, expressed optimism about the region's potential, stating: "The MENA region holds immense potential to become a hub of excellence for Web3 and virtual assets. We eagerly anticipate the chance to further enhance the already flourishing ecosystem throughout the region." Global hubThis strategic move aligns with the United Arab Emirates' (UAE) goal to establish itself as a global hub for the cryptocurrency industry. VARA, formed in March 2022, was tasked with regulating the emerging virtual asset sector in Dubai. The regulatory framework gained momentum when Sheikh Mohammed bin Rashid Al Maktoum, Dubai's prime minister and ruler, approved a new virtual assets law in March 2022, providing a legal foundation for the crypto industry in the city. Dubai's proactive stance towards regulating the cryptocurrency industry has attracted several major players, including Crypto.com, Ripple, Binance and Bybit, all securing crypto licenses from Dubai's regulator. OKX Middle East joins the likes of TOKO FZE and Trek Labs Ltd FZE in obtaining a license for exchange services. Tim Byun, the Global Head of Government Relations at OKX, emphasized the significance of this license in the company's journey towards a trustless system. "This license was a crucial step for OKX as we move from a trust-based system to one that is trustless and empowers users to take control of their financial future," he stated. Byun expressed excitement about contributing to the development of Dubai's crypto and Web3 ecosystem, highlighting the importance of the market. It's noteworthy that OKX, already regulated in the Bahamas, currently restricts customers from the United States due to regulatory issues. The expansion into the Middle East represents a strategic move for OKX to tap into the growing crypto market in the region and aligns with the broader trend of cryptocurrency exchanges expanding their global footprint.