Korean Crypto Market’s Healthy Growth Requires Corporate Participation

FTX Seeks Exclusion of Dubai Unit from Bankruptcy ProceedingsFailed crypto exchange FTX, which filed for bankruptcy in November, is now aiming to exclude its Dubai unit from the ongoing restructuring proceedings unfolding in the United States.Photo by Roman Logov on UnsplashNo previous business activityThe motion, filed with the bankruptcy court in Delaware on Wednesday, comes as FTX contends that its Dubai branch had not engaged in any business activities prior to the bankruptcy declaration, making its participation in the rehabilitation efforts unlikely.In the recent court filing on August 2, FTX put forth its argument that its Dubai unit, FTX Dubai, held a balance sheet that was solvent. Consequently, the exchange proposed that initiating a voluntary liquidation process in line with the laws of the United Arab Emirates (UAE) would expedite the distribution of its positive cash balance, settling liabilities, and liquidating assets.FTX Dubai, a wholly-owned subsidiary of FTX’s European arm, holds a sum of approximately $4.5 million across various accounts. However, $4 million of this amount remains restricted by the Virtual Assets Regulatory Authority (VARA) of Dubai, serving as a security measure for its license as a virtual asset service provider.Expired licensingFTX Dubai was originally awarded a license by VARA in July 2022, although it never got to a point where it offered any crypto-related services based on that license. On May 31 of this year, FTX Dubai management was informed by VARA that the regulator would not seek to renew the license if FTX Dubai didn’t act to terminate it. The license was subsequently suspended on July 12 by VARA.Licensing could have been useful to a new operator coming in to run the business. Earlier this week, the FTX Debtor filed a restructuring plan that leaves a path open towards relaunching the FTX International business outside of the United States. It’s clear that the current regulatory environment in the US is such that it’s simply not an attractive option to establish a restructured FTX business there.The FTX Debtor and its advisors are engaging with bidders for the business. In establishing a business on the right footing, it may be just as well that licensing will start afresh. To settle market doubts, the new entity will need to achieve a high level of compliance and industry-leading customer protections.FTX Dubai is now anticipated to collaborate with the designated liquidator to carry out essential administrative procedures, ensuring a systematic and efficient execution of the liquidation process. The company’s decision to file for bankruptcy on November 11, 2022, initiated bankruptcy proceedings for a total of 102 associated entities worldwide, reflecting the substantial impact of its financial turmoil.The matter is scheduled to be addressed in the court’s first hearing on August 23, shedding light on how the court will respond to FTX’s motion to remove its Dubai unit from the overarching bankruptcy proceedings in the US. This development underscores the complexities of a cross-border crypto bankruptcy, highlighting the intricacies of global regulatory frameworks in this evolving sector.

SkyArk Chronicles, a Singapore-based Triple-A gaming platform, recently announced the completion of a $15 million funding round that it suggested was led by Binance Labs, the venture arm of the leading global crypto platform. Binance has subsequently moved to clarify that it is not involved in the latest funding initiative.Photo by Laurin Steffens on UnsplashBacked by Binance since 2021The gaming ecosystem, which has enjoyed the backing of Binance since 2021, expressed excitement about the successful completion of the funding round. On Jan. 12, SkyArk posted on social media platform X, suggesting that Binance led the recent funding round but the project has since deleted that post. The post mentioned the participation of more than 40 institutions in the funding round, including Vividthree Productions, a Singapore-based company. It didn’t disclose the amount it claimed was invested by Binance Labs at that time. The announcement also highlighted contributions from other notable entities in the NFT and gaming space, such as GuildFi Global, Jambo Technology and BreederDAO. Additionally, individual investors like LayerZero CEO Bryan Pellegrino, Tangent Ventures Co-Founder Wangarian and Story Protocol CEO S.Y. Lee were all claimed by the project to have made noteworthy contributions to SkyArk's funding initiative. Binance Labs denialHowever, recent developments have introduced an element of uncertainty. Binance Labs, in an X post on Monday, distanced itself from SkyArk Chronicles' latest funding round. Contrary to the earlier announcement, Binance Labs clarified that it did not participate in SkyArk's $15 million funding round earlier this month. The venture arm reiterated its sole investment in SkyArk during the Incubation Season 3 program in 2021. This clarification from Binance Labs raised concerns about the accuracy of SkyArk Chronicles' earlier announcement, leading to SkyArk posting to confirm the information supplied by Binance. That post states: “We are very sorry for the miscommunication and appreciate the clarification from Binance Labs. We remain focused on making SkyArk a success and will continue working hard to achieve our vision.” Community reactionThe saga has caused some concern within the community, underscoring the need for transparency in the cryptocurrency and gaming industries. Web3 and NFT consultancy firm Vader Research commented on the development, stating:”SkyArk didn’t raise a new private round at all. They circulated the 2021 funding round announcement as if it recently occurred and used that to raise $11m from the public.” In a subsequent post, Vader added that Binance still has considerable leverage where SkyArk is concerned, as it retains the right to decide whether to list the SkyArk token on the platform. SkyArk Chronicles had a history of collaboration with Binance, dating back to 2021 when Binance selected SkyArk Studio for its prestigious Incubator Program Season 3. Out of over 1,000 applicants, SkyArk Studio was one of the nine teams chosen, emphasizing its potential in the blockchain and gaming space. In a follow-up post on Monday, SkyArk co-founder Kelvin Chua expressed his gratitude to Binance for its support over the past three years. The gaming platform, led by seasoned professionals in traditional mobile games, aspires to revolutionize the gaming sector worldwide. Their focus on launching Fully-On-Chain and Only-Assets-On-Chain games sets them apart, with a commitment to incorporating NFTs seamlessly into various gameplay styles. 

Momentica’s NFT Photo Cards Captivate K-Pop EnthusiastsMomentica, a fan-artist engagement platform, has been captivating K-pop enthusiasts with NFT photo cards featuring their favorite artists.Dunamu and HYBELevvels, the company behind Momentica, has garnered significant attention from both the tech and the entertainment industries, as it is a joint venture between Dunamu, the operator of Korea’s leading crypto exchange, and HYBE, the agency representing world-renowned boy band BTS.K-pop photo cardsOne of the primary goals of this promising company is to introduce the K-pop fandom culture to global audiences. K-pop fans enjoy collecting photo cards featuring their favorite singers or actors, and thanks to blockchain technology, these cards can now be transformed into non-fungible tokens (NFTs), ensuring their authenticity and preventing forgeries and counterfeits. Dunamu’s blockchain expertise has combined with HYBE’s intellectual property to create a range of collectible items for K-pop fans.In a recent interview with Donga Ilbo, Levvels CEO Cha Sang-hoon explained the company’s current status and future plans. Cha said that Levvels is primarily a blockchain-based Web3 company aiming to leverage various technological tools to offer a range of services.Levvels’ Momentica issues digital photo cards called TAKEs, which capture unique and memorable moments of artists, and the collection, appreciation, and trading of these cards are facilitated through the Momentica app. Fans can use Momentica to collect digital cards featuring artists such as Seventeen, Le Sserafim, and Fromis_9. The authenticity of TAKEs is verifiable, as they are recorded on the blockchain.© Pexels/Sebastian ErviPhysical to digitalMomentica transitions the fan experience from the physical world to the digital realm. Through the app, K-pop aficionados can now exchange photo cards, promote their favorite stars, and maintain a virtual album. Exclusive content, including pictures, videos, and handwriting from some artists, will be available only on Momentica.Cha mentioned that Momentica has users across 93 countries, with Koreans constituting 40% of the total. Japanese users represent over 30%, indicating the app’s strong presence in the Japanese market. Taiwan, Indonesia, and the US follow in the number of users. Overall, the app’s popularity aligns with regional interest in K-pop.Beyond HYBEWhile the current service focuses on limited collections of digital photo cards, Momentica plans to enhance the experience by allowing K-pop fans to personalize and directly exchange cards. The company is also working on collaborations with artists from labels beyond HYBE for them to participate in Momentica.