UAE’s RAK DAO Partners with HBAR Foundation to Support Web3 Startups

Nasdaq-listed Bitcoin Depot, an American cryptocurrency ATM specialist, is expanding into Hong Kong, citing the city’s burgeoning status as a crypto hub and rapid digital asset adoption across Asia. The Atlanta-based company, which provides kiosks for converting cash into cryptocurrency, went public in July 2023. Its move into Asia follows a recent acquisition of assets from National Bitcoin ATM that boosted its domestic market share to a reported 30% as well as the strengthening of its compliance program. "Hong Kong is quickly becoming a global center for crypto, with the right mix of regulation, demand, and momentum," company president Scott Buchanan said in a Nov. 12 statement.Photo by Keller Chewning on UnsplashHong Kong's digital asset pushBitcoin Depot’s expansion aligns with a concerted push by the special administrative region to position itself as a global hub for digital assets. Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), recently highlighted this ambition, which was underscored by a Nov. 11 announcement of an additional HK$10 billion ($1.3 billion) issuance of digital green bonds. The tokenized bond issuance, the third under the government's program, was denominated in Hong Kong dollars, Chinese yuan, U.S. dollars, and euros, and involved major banks like HSBC, BNP Paribas, and J.P. Morgan. The move also reflects a broader regional trend. In September, Tokyo-based Coinhub launched Japan's first officially registered crypto ATM network, installing 25 machines with plans to expand to 3,000 nationwide. Industry faces regulatory headwindsDespite the growth, the industry faces scrutiny from law enforcement over the use of crypto ATMs in criminal activity. In 2024, the FBI logged nearly 11,000 fraud complaints tied to the kiosks, with reported losses topping $246 million. According to Cointelegraph, increased regulatory attention has prompted several U.S. cities to ban crypto ATMs outright, while some states are introducing new restrictions. Concerns are growing over scams targeting vulnerable groups, especially seniors. Regulatory pressure is also mounting elsewhere. Australia's financial crimes watchdog, AUSTRAC, issued a $56,340 infringement notice last month to local operator Cryptolink, which the company paid. Cryptolink must now appoint third-party reviewers to ensure its anti-money laundering and counter-terrorism financing (AML/CTF) controls are adequate. The action followed findings from AUSTRAC’s Crypto Taskforce that 85% of transactions by the 90 most frequent crypto ATM users were linked to scam proceeds or money mule operations. AUSTRAC CEO Brendan Thomas urged the public "to be cautious of making transactions to any wallet they don’t control and thinking twice in circumstances where someone asks you to deposit money into a crypto ATM.” 

OPNX Makes a Play for Struggling Crypto Lender HodlnautIn a strategic move OPNX, the crypto claims trading platform associated with the founders of failed Singaporean crypto hedge fund Three Arrows Capital (3AC), is eyeing the acquisition of Hodlnaut, a beleaguered crypto lender currently undergoing court-supervised restructuring in Singapore.Photo by Meriç Dağlı on UnsplashCompelling offerThat’s according to a person familiar with the matter cited by Bloomberg News on Sunday, together with a term sheet seen by Bloomberg. It’s understood that OPNX has presented a compelling offer to infuse Hodlnaut with a much-needed capital injection of approximately $30 million worth of FLEX digital tokens.These tokens are closely tied to CoinFLEX, a trading platform that ran into difficulty in 2022, co-founded by Mark Lamb and Sudhu Arumugam. The Seychelles-based company rebranded and relaunched as OPNX earlier this year with the 3AC founders on board. The FLEX token holds a current market valuation of around $647 million, according to CoinGecko data.Partial creditor payoutThe OPNX proposal aims to fund a partial creditor payout to facilitate the resolution of pending claims. This proposal comes on the heels of efforts by Hodlnaut’s directors to reach out directly to its users, a move that was met with objections by the interim judicial managers overseeing Hodlnaut’s restructuring. A letter dated July 29 from the administrators confirms this development.Under the terms of the deal outlined in a term sheet, OPNX’s capital injection through FLEX tokens would translate into a 75% ownership stake in Hodlnaut. The restructuring plan, if approved by creditors, would see these creditors receiving 30% of their claims in FLEX and other tokens. Alternatively, they would be entitled to a pro-rata payment of up to 95% of the total available corporate assets, whichever is more favorable to them.Hodlnaut, headquartered in Singapore with operations also in Hong Kong, got caught up in crypto market turbulence, leading to a suspension of withdrawals a year ago. Subsequently, it embarked on a court-monitored restructuring journey in Singapore. Neither Hodlnaut nor its judicial managers have provided immediate comments on the OPNX bid.The founders of Hodlnaut, Simon Lee and Zhu Juntao, had earlier proposed a business sale as a preferable alternative to liquidation. This proposal aimed to provide better outcomes for creditors, who had initially expressed preference for liquidation over a proposed restructuring plan earlier in the year.OPNX reprimandThe journey of both OPNX and Hodlnaut is also marked by legal and regulatory challenges. In April, authorities in Dubai reprimanded Su Zhu, Kyle Davies, Mark Lamb, OPNX’s CEO Leslie Lamb, and Sudhu Arumugam for operating and promoting OPNX without the required local license. Meanwhile, the liquidators of 3AC have alleged a lack of cooperation by Zhu and Davies, as they seek to recover $1.3 billion from the duo, reflecting the losses preceding the fund’s downfall.The 3AC founders recently claimed that they would donate OPNX profits to 3AC creditors. However, Kyle Davies is fighting the efforts of the 3AC liquidator to reclaim funds from the founders.

Short-Term Crypto Investment Prevails Among Hong Kong’s Retail InvestorsHong Kong’s retail investor interest in virtual assets has experienced a significant surge in recent years, albeit a recent survey suggests that most retail investors take a short-term investment view relative to crypto assets.Photo by Robert Bye on UnsplashIFEC studyThis newfound enthusiasm for virtual assets emerges from a recent study published by the Investor and Financial Education Council (IFEC), a subsidiary of the Securities and Futures Commission (SFC), Hong Kong’s securities regulator. The survey found that 6% of retail investors in the city had entered the virtual asset market in 2023, as compared to merely 1% in 2019.Conducted from June to July of this year, the study encompassed 1,000 individuals aged between 18 and 69. The survey uncovered a trend toward crypto investing among retail investors who’ve been enticed by the allure of the emerging asset class. Intriguingly, every single one of the digital asset retail investors in the study held cryptocurrencies in their portfolios. Non-fungible tokens (NFTs) and stablecoins, while still relatively niche, were also present in the portfolios of 6% and 2% of investors, respectively.11% to invest in crypto within 12 monthsAnticipating a further uptick in interest, the IFEC report posits that 11% of those surveyed have intentions to invest in virtual assets or related products within the next 12 months. This indicates that the allure of virtual assets continues to exert its magnetic pull on investors in Hong Kong.Despite the growing interest, a noteworthy finding in the survey is that 75% of retail virtual asset investors admitted to their primary motivation being the pursuit of short-term gains. Simultaneously, 74% of these investors perceived virtual assets as a prevalent investment trend, and 73% cited the fear of missing out on popular investment opportunities as a driving factor. These statistics underscore the need for enhanced investor education within the sphere of virtual assets.Lack of regulatory awarenessAnother interesting aspect of the data which emerged from the survey was the finding that only 47% of all surveyed investors are aware of Hong Kong’s recently introduced virtual asset trading regulations, which came into effect on June 1.An additional facet of this investor behavior study was illuminated by research conducted by the Department of Applied Social Science at Hong Kong Polytechnic University (PolyU). This research, based on data from a separate IFEC report that surveyed 501 people from November to December of last year, revealed that many retail investors in virtual assets exhibited overconfidence in their judgment.These investors were also found to have a proclivity to overemphasize past information, lean heavily on readily available and easily recalled information, and overestimate personal intuition.With that in mind, Eric Chui, Head of PolyU’s Applied Social Science unit, advised virtual asset investors to adopt a more deliberate and rational approach. Chui emphasized the importance of building financial literacy and collecting high-quality market information to make informed investment decisions, while steering clear of irrational investment behavior and biases.