Blofin Expands Into Vietnamese Market

Flybit’s Bug Bounty Program to Strengthen Its Crypto Exchange SecurityKorea Digital Exchange, the operator behind South Korean cryptocurrency exchange Flybit, announced the launch of a bug bounty program aimed at rewarding individuals who identify vulnerabilities in the trading platform’s security infrastructure.Photo by Sergi Kabrera by UnsplashWhite Hat Together initiativeThe inception of this bug bounty program was made possible through Flybit’s involvement in the White Hat Together initiative, which involves the active engagement of the government, enterprises, and citizens. This initiative is hosted by digital service company CJ OliveNetworks in collaboration with the Korea Internet and Security Agency (KISA) and bug bounty platform Find The Gap. Its objective is to reassess the security of Flybit’s services and proactively address weak points within the system.Flybit intends to seize this opportunity to enhance its information protection capabilities, with a commitment to safeguarding user assets and ensuring a reliable trading environment.Recognition for information protectionFlybit is the sole non-fiat crypto exchange in the country that has successfully attained Personal Information and Information Security Management System (ISMS-P) certification as well as ISO 27001 and ISO 27701 certifications. It’s important to note that, in Korea, crypto trading platforms are legally mandated to obtain real-name accounts from banks to facilitate the deposit and withdrawal services of Korean won. Platforms lacking real-name bank accounts are prohibited from supporting trading denominated in Korean won.Additionally, in May, Flybit participated in information protection disclosure and was subsequently certified by KISA as an outstanding company for its investments in information protection.

Financial regulators in Hong Kong are moving towards the presentation of stablecoin legislation following the completion of a consultation process. In February of this year, that consultation process, which received 108 submissions from professional bodies and industry stakeholders, was completed. It was run jointly by The Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA), culminating in the publication of the results of the process.Photo by Pat Whelen on UnsplashLegislative proposal publishedOff the back of that prior body of work, the regulators have now published a legislative proposal, incorporating responses to issues that were brought to light via the consultation process. The regulators concluded that going forward, stablecoin regulation should be considered primarily in terms of those stablecoin assets which operate on a ledger which runs on a decentralized basis. Additionally, no individual or unilateral entity should have the ability to tamper with or control those assets or the network upon which they exist. On this basis, the regulators intend to submit a bill relative to fiat-referenced stablecoins for consideration to the Legislative Council at a later stage in 2024. Before submitting any legislative proposal, the regulators plan to once again consult with stakeholders prior to finalizing any such proposal. As part of what they have set out thus far, regulators are looking to include a requirement for any stablecoin issuer to obtain a license in Hong Kong.  Reserve asset requirementsThey remain open to the idea that reserve assets backing an issued stablecoin could be held in an overseas jurisdiction. However, if the issuer is an overseas entity, it will be required to establish a local corporate entity in Hong Kong, with relevant management personal based within the Chinese autonomous territory. In light of feedback received during the consultation process, the regulator is looking at reducing the attestation frequency that each stablecoin issuer will be required to provide via an independent auditor in order to verify that the stablecoins issued are backed by the requisite amount of liquid assets.  Such reserve assets must be segregated from the working capital of the stablecoin issuer’s business, with the HKMA expressing a preference for a trust-like structure following input via the consultation process. Furthermore, reserve assets must be deemed to be both high quality and highly liquid, which would include cash, bank deposits and government issued securities where counterparty risk is minimized. On the basis that the Hong Kong dollar is pegged to the U.S. dollar, the regulator is content to allow issuers to use USD-denominated reserve assets if they prefer to do so. The legislative proposal also stipulates the need for issuers to have a minimum share capital of HK$25 million or 1% of the value of stablecoin in circulation.  The HKMA foresees crypto exchanges, securities firms and regulated banks having the ability to offer stablecoins to customers, so such offerings won’t be confined to dedicated stablecoin issuers.Back in March the HKMA introduced a stablecoin sandbox with a view towards learning what works best from a regulatory standpoint. It’s understood that a list of participants will be announced in the near future. Participating entities will be able to issue stablecoins in Hong Kong within that controlled sandbox environment, prior to full scale implementation once stablecoin regulation has been fully legislated for.

Hong Kong and the UAE Collaborate on Crypto RegulationHong Kong and the United Arab Emirates’ (UAE) central banks have announced a collaboration to work on cryptocurrency regulations and financial technology development. The move is significant insofar as both territories have been making headway in developing global crypto hubs over the course of the past six months.Photo by Nick Fewings on UnsplashStrengthening cooperationFollowing a meeting on Monday, the Hong Kong Monetary Authority (HKMA) and the Central Bank of the UAE published a statement on Tuesday, in which they set out the areas of cooperation between them. They agreed to strengthen cooperation on “virtual asset regulations and developments.”The central banks also expressed their commitment to facilitating discussions on joint fintech development initiatives and the sharing of knowledge through their respective innovation hubs.Financial infrastructureDuring the meeting, the officials highlighted the importance of financial infrastructure and financial market connectivity between the two jurisdictions. The Governor of the Central Bank of the UAE, H.E. Khaled Mohamed Balama, expressed his anticipation for an ongoing and long-term relationship with the HKMA.HKMA’s Chief Executive Eddie Yue echoed this sentiment, emphasizing that both regions share many complementary strengths and mutual interests, which will contribute to the economic benefits of the collaboration.In addition to the meeting, a seminar was organized for senior executives from banks in Hong Kong and the UAE. The seminar covered various topics, including improving cross-border trade settlement and exploring how UAE corporations can leverage Hong Kong’s financial infrastructure platforms to gain access to Asian markets.This collaboration comes at a time when the Securities and Futures Commission (SFC) in Hong Kong is allowing virtual asset service providers (VASPs) to cater to retail investors starting from June 1. Christopher Hui, the Treasury Chief of Hong Kong, emphasized that virtual assets are here to stay and acknowledged the fundamental value they bring. Hui also stressed the importance of regulation to harness the positive elements of cryptocurrencies while mitigating potential risks.Since the announcement of the application process by the SFC, several cryptocurrency exchanges, including CoinEx, Huobi, BitMEX, and OKX, have filed applications to provide dedicated crypto trading services in Hong Kong.FAFT travel ruleThe collaboration between the central banks of Hong Kong and the UAE marks a significant step in the global development of cryptocurrency regulations and fintech innovation. The move is demonstrative of ever improving levels of international cooperation on digital assets worldwide.Both jurisdictions are moving forward with the implementation of the Financial Action Task Force’s (FATF) travel rule. The UAE issued new guidelines in that respect on Tuesday. Hong Kong has gotten a head start in this respect, with the implementation of the travel rule through the introduction of the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill in December 2022.By leveraging their respective strengths and knowledge-sharing efforts, these regions aim to foster a conducive environment for the growth and adoption of digital assets. With increased financial infrastructure connectivity and joint initiatives, both jurisdictions are poised to benefit economically from this collaboration in the long run.