OPNX Enables Margin Trading via oUSD

FTX, the failed cryptocurrency exchange founded by Sam Bankman-Fried, has taken legal action by filing a lawsuit against four former employees of Salameda, a Hong Kong-based affiliate closely linked to the exchange’s former CEO.According to a Delaware bankruptcy court filing in the United States on Thursday, the lawsuit alleges that five individuals exploited their personal connections to prioritize their asset withdrawals from FTX during a period of uncertainty regarding the exchange’s stability. The defendants in question are Salameda’s former employees — Michael Burgess, Matthew Burgess, Kevin Nguyen, and Darren Wong — as well as Michael and Matthew’s mother, Lesley Burgess, and two companies: 3Twelve Ventures and BDK Consulting.Photo by Bermix Studio on Unsplash Preference period clawbackThe critical withdrawals occurred within the 90-day period leading up to FTX’s bankruptcy filing on November 11, commonly referred to as the “Preference Period.” Under US law, customers who withdrew their crypto assets during this timeframe could potentially face lawsuits from the exchange’s creditors seeking to recover these funds, a process known as a “clawback” under bankruptcy regulations.The total value of these suspicious transfers is estimated at $157.3 million, with more than $123 million of that sum withdrawn after November 7, 2022. Michael Burgess is alleged to have received around $73 million of these illicit withdrawals.The lawsuit claims that the individuals leveraged their connections within FTX Group to ensure preferential treatment over other customers. In a specific accusation, Matthew Burgess is said to have engaged other FTX Group employees to expedite certain withdrawal requests from his FTX US exchange accounts while falsely representing the accounts as his own. 11th hour withdrawalsIn this way, Burgess and the other four defendants managed to get funds out when most other FTX customers couldn’t. The final withdrawals were executed only hours before FTX.com suspended all withdrawals on November 8, 2022, according to the lawsuit. As one commentator on X put it, “FTX employees were manually reviewing large withdrawals & pushing some ahead.”The legal filing also delves into the significant profits the defendants reportedly accrued from trading cryptocurrencies in the months leading up to FTX’s collapse. Even after their apparent departure from the FTX Group, Michael Burgess, Nguyen, and Wong actively traded through entities such as 3Twelve and BDK, with monthly trading volumes ranging from $100 million to $400 million.A noteworthy aspect of this activity is that their trading capital was allegedly derived from the FTX Group. The court filing goes on to claim that “Burgess, Nguyen and Wong received substantial transfers of digital assets and fiat currency from exchange accounts associated with FTX Group entities, including approximately 13.1 million FTT sent to Darren Wong, more than 1 million SOL sent to Michael Burgess, and nearly $4 million USD for ‘bonuses’ between Michael Burgess, Nguyen and Wong.” Retail clawback riskThis legal battle and the allegations against the former Salameda employees are being watched closely by other FTX bankruptcy stakeholders. The FTX Debtor has suggested that it will pursue clawbacks vigorously. That has concerned former retail customers who managed to withdraw assets in the final days before the platform collapsed. Equally, it is a worry for current FTX creditors who may have withdrawn some but not all of their assets before the exchange was shuttered.

Real-world asset (RWA) tokenization, the conversion of tangible assets into digital tokens on a blockchain, is gaining momentum in the United Arab Emirates (UAE), according to a number of industry professionals working in the sector.Photo by ZQ Lee on Unsplash‘No lack of demand’Scott Thiel, founder and CEO of Dubai-based RWA token marketplace Tokinvest, recently outlined to Cointelegraph that the company is experiencing “no lack of demand” for tokenized RWAs. Thiel believes that demand is coming from real estate developers and large property owners who “want to explore how they can use this as an alternate means of financing or selling their property.” The Tokinvest CEO explained that a booming property market in the UAE,  particularly in Dubai, is contributing towards RWA tokenization demand in the country. He stated: “What’s the hottest real estate market in the world? Well, I think today it’s probably Dubai, and so, everyone would like to own a piece of this or to get access to the economic benefits of being a participant in that marketplace.” RWA tokenization dealsLast year, Liv Digital Bank, a subsidiary of Emirates NBD, the second largest bank in the UAE, signed a deal with RWA tokenization firm Ctrl Alt. At the time, Ctrl Alt CEO Matt Ong pointed to a Boston Consulting Group report that forecast a $16 trillion business opportunity with regard to the tokenization of global illiquid assets by 2030. In January, MANTRA, a layer-1 blockchain project that focuses on RWA tokenization, inked a $1 billion deal with Damac Group, an Emirati property development company. The objective of the partnership is to bring transparency, security and access to Damac’s assets using blockchain. Last month, MANTRA was awarded a Virtual Asset Service Provider (VASP) license by Dubai regulator, the Virtual Assets Regulatory Authority (VARA). MANTRA Co-founder and CEO John Patrick Mullin described the license award as “a validation of our purpose, which is to provide developers and institutions with a purpose-built RWA Layer 1 Blockchain, that’s capable of adhering to real world regulatory requirements.” Proactive regulationIt is with regard to regulation that many in the industry feel that the UAE is gaining the upper hand where RWA tokenization is concerned. Tokeninvest’s Thiel provided input into the formulation of VARA’s regulatory framework back in 2022. He said that the authorities there have taken a proactive approach to digital asset regulation, with a genuine desire to provide regulatory clarity. The Tokinvest CEO was sufficiently impressed by the regulatory approach in the UAE to relocate the company there. Back in January, VARA awarded the company a trading license for its tokenized RWA marketplace. Commenting following the announcement of the Damac deal, MANTRA’s Mullin complimented the UAE authorities on their business-friendly approach: “The UAE has shown time and again that they can lead the crypto industry in innovation.”  In a series of posts on X recently, Julian Kwan, CEO and founder of IXS, a Singapore-based institutional bridge for tokenized RWAs, cited the Damac tokenized real estate deal while asserting that tokenized “RWAs are no longer a concept — they are an unstoppable financial movement.”

HashKey OTC, the over-the-counter (OTC) trading arm of the Hong Kong-headquartered HashKey Group, has reached a regulatory milestone with the acquisition of a major payment license in Singapore.Photo by Mike Enerio on UnsplashEnabling digital asset service offeringIn a recent announcement via the firm’s official blog, HashKey Group revealed that HashKey OTC has secured in-principle approval from the Monetary Authority of Singapore (MAS) for its Major Payment Institution (MPI) license application. This approval positions HashKey OTC to offer regulated digital payment token services in Singapore, representing a significant stride in the firm’s efforts towards regulatory compliance. CEO of HashKey OTC, Li Liang, emphasized the company's steadfast commitment to regulatory adherence, considering it a pivotal step towards providing comprehensive and regulated over-the-counter trading solutions for its clients. Liang highlighted the significance of the in-principle approval, expressing the company's vision to furnish a wide array of digital payment tokens and fiat currencies in a regulated environment. The approval has generated optimism within the global crypto market community, particularly amidst prevailing uncertainties surrounding crypto regulations worldwide. Expansion initiativesHashKey OTC's attainment of the MPI license aligns with its strategic expansion initiatives, building upon its earlier success in securing a capital markets services license for fund management in Singapore. This achievement reflects the company's desire to operate within legal frameworks while delivering innovative crypto solutions to its clientele. Furthermore, HashKey OTC's regulatory triumph mirrors the broader regulatory landscape in Singapore, where crypto firms navigate stringent requirements to establish credibility and trust within the market. MPI approvalsThe exchange's milestone mirrors similar successes achieved by other industry players. Recent months have seen a raft of digital asset industry enterprises achieve a similar milestone. In January, American digital asset custodian BitGo acquired in-principle MPI approval. Last November, Taipei-headquartered crypto exchange business XREX achieved a similar outcome. Other entities who had been successful in pursuing MPI licensing earlier in 2023 include crypto exchange Upbit Singapore, crypto trading firm GSR, American crypto exchange platform Coinbase and enterprise blockchain firm Ripple. Despite Singapore's reputation as a crypto-friendly jurisdiction, recent decisions by MAS have demonstrated a cautious approach towards certain crypto products. While spot bitcoin exchange-traded funds (ETFs) received approval in the United States, MAS has opted against permitting the listing of such ETF products for retail investors, citing concerns over the asset's volatility and suitability for retail investment. HashKey is one of only two entities to have secured similar licenses in Hong Kong. Last month, affiliate company HashKey Capital, a Singapore-based crypto fund manager, launched a series of indices designed to track cryptocurrencies in a collaboration with FTSE Russell. Also in January, the Hong Kong business partnered with crypto derivatives platform OKX with the objective of advancing compliant virtual asset innovation. HashKey OTC's acquisition of a major payment license in Singapore, amid a backdrop of similar businesses pursuing similar licensing in various jurisdictions recently, signifies a significant advancement in regulatory compliance within the crypto industry. The approval underscores the exchange's desire to provide regulated over-the-counter trading solutions while navigating the evolving regulatory landscape in Singapore and beyond.