Gemini Targets UAE Crypto License

Hong Kong Police Issue Warning as Binance Users Lose Funds to Phishing ScamHong Kong has witnessed a surge in phishing scams targeting Binance users, prompting local law enforcement to issue a cautionary advisory.Photo by Serey Kim on UnsplashCyberDefender warningThe warning was issued by Hong Kong police via its CyberDefender Facebook page on Monday. Over the past two weeks, at least 11 Binance customers in Hong Kong fell victim to phishing scams, collectively losing over $446,000 (equivalent to HKD 3.5 million). These scams primarily involve fraudulent text messages.According to Hong Kong police, these fraudulent text messages claim to be from Binance and ask users to verify their accounts by clicking on a link provided within the message. On Facebook, the warning stated:“Recently, fraudsters posing as Binance sent text messages claiming that users must click the link in the message to verify their identity details before a deadline, otherwise their account would be deactivated.”Upon clicking the phishing link and entering their login credentials to “verify” their accounts, victims unwittingly grant fraudsters full access to their Binance accounts. This modus operandi mirrors the tactics commonly employed in phishing scams.CZ chimes inBinance CEO Changpeng Zhao (CZ) also joined in the cautionary chorus, issuing a warning to customers on his X account.The crypto sector in Hong Kong has been facing challenges recently, largely related to the recent JPEX fraud case. The losses incurred from the JPEX exchange scandal have swelled to an estimated $180 million, with over 2,300 victims filing complaints with local authorities.The JPEX scandal led to multiple arrests in Hong Kong and prompted authorities to intensify their efforts against illegal crypto activities. The Securities and Futures Commission (SFC) of Hong Kong introduced regulations mandating the licensing of all crypto exchanges operating within its jurisdiction earlier this year.To date, only two exchanges, HashKey and OSL, have secured licenses under this regulatory framework. Numerous other crypto exchanges in Hong Kong have submitted license applications, but Dubai-headquartered JPEX, despite heavily promoting its application for a Hong Kong license, failed to submit an application to the local regulator. In the wake of the JPEX scandal, the SFC published a comprehensive list of companies seeking crypto licenses and expanded its list of suspicious platforms.Cyber security firm Kaspersky found earlier this year that phishing related to crypto trading is on the rise in Asia, particularly in the Philippines. Binance’s CZ has had to issue warnings where phishing is concerned on previous occasions. He did so in July when the founder of decentralized crypto exchange (DEX) Uniswap was hacked.In February of last year, CZ came out again to warn users of a massive SMS-related crypto phishing scam. Back in 2018 a serious attempt was made to compromise the credentials of Binance platform users via phishing techniques.As phishing scams continue to pose a significant threat to crypto users in Hong Kong, and with the aftermath of the JPEX debacle still reverberating through the industry, vigilance and caution remain paramount for participants in the region’s crypto ecosystem.

Hong Kong Says No to Light Touch RegulationThe CEO of the Hong Kong Monetary Authority (HKMA) has said that while the autonomous territory will allow innovation to develop in the crypto space, that will not mean light touch regulation.Photo by Ruslan Bardash on UnsplashLowering guard railsAfter a three year hiatus, the Bloomberg Wealth Asia Summit returned to Hong Kong on Tuesday. Speaking at the conference, Eddie Yue, the CEO of the HKMA, Hong Kong’s regulatory body, outlined that the territory intends to enable innovation relative to crypto businesses that establish themselves in Hong Kong.“We will let the industry develop and innovate, we will let them create an ecosystem here,” he said. However, he added the following caveat: “But that doesn’t mean light touch regulation. If any participant thinks that the regulation is too tight, they’re welcome to go elsewhere.”Yue outlined that over the course of the past three years, guardrails relative to the operation of crypto-related activities were excessively high. Yue alluded to a new approach that sees those guard rails dropped to a level whereby innovation will be enabled in the digital assets space. However, he followed up by underlining the fact that the Authority has no intention of following a light touch regulatory approach.No safeguards not an optionAlthough acknowledging that Hong Kong may have been excessively crypto unfriendly relative to digital asset regulation in the recent past, he believes that Hong Kong has now got it right. “Our guardrails are lower, to a reasonable and sustainable level,” Yue said.The HKMA regulator flagged jurisdictions that provide little or no guardrails at all as the ones that will run into difficulties. “If you look elsewhere, there are no guardrails in some places, the guardrails are very low and there you see problems”, Yue clarified.He cited FTX as a stand out example of a basic lack of internal controls. FTX International was based in the Bahamas. While customers of FTX International find themselves in a difficult position, those of subsidiary companies FTX Japan and FTX Europe are having their funds returned as a direct consequence of much better regulatory safeguards in those regions.“All those wrongdoings by the platforms that we saw in the last one or two years will not happen in Hong Kong,” Yue claimed.A continuing trendWhile many commentators and critics from the conventional world have described bitcoin and crypto as a ponzi or a passing fad, Yue pointed out that digital assets are not going anywhere and that the trend towards digital assets will continue. Expanding further, he articulated that the overarching digital assets sector encompasses much more than just crypto: “Virtual assets or crypto is actually a very broad term. It’s not really about crypto, you’re talking about stablecoins or tokenized assets in the future.”A mere $0.3 trillion of illiquid real world assets have been tokenized thus far. It’s anticipated that this level of tokenization will climb to $16 trillion by 2030.

Bill Winters, the American banker who heads the British financial group Standard Chartered, appeared at the Hong Kong FinTech Week conference earlier this week, where he predicted a future in which cash will give way to blockchain-based systems for everyday transactions. According to Cointelegraph, Winters’ view aligns with that of Hong Kong regulators. At the same time, he stressed the importance of continued experimentation, noting that it remains uncertain how this transformation will ultimately take shape. Winters also commended Hong Kong’s leadership in exploring the potential of digital finance. Tech-driven finance has certainly been one of the key initiatives Hong Kong has been exploring. Recently, the Hong Kong Monetary Authority (HKMA) released its e-HKD Pilot Programme Phase 2 Report, which showed public support for tokenized deposits.Photo by Shubham Dhage on UnsplashReal-world assets gain ground on the blockchainOn-chain data also underscores the rapid growth of the tokenization sector. According to RWA.xyz, the total value of real-world assets (RWAs) deployed on-chain has climbed to $35.63 billion, up 7.8% from a month ago. A study by Ripple and Boston Consulting Group (BCG) estimates that tokenized assets could be worth $19 trillion by 2033, about 530 times their current value. Among RWA assets, the BlackRock USD Institutional Digital Liquidity (BUIDL) Fund, Tether Gold (XAUT), and Paxos Gold (PAXG) currently lead the market in terms of value. Over the past 30 days, BlackRock’s BUIDL Fund slipped 0.06%, while the two tokenized gold products, XAUT and PAXG, jumped 46.65% and 14.19%, respectively. These gains mirror gold’s bullish run in October, when its price surpassed $4,000 per ounce for the first time on Oct. 7. The momentum has since eased slightly, with gold now trading at around $3,969.55 per ounce. Tokenization brings 24/7 markets and P2P flexibilityIndustry experts point to the convenience of tokenization as a key advantage. Speaking to Yahoo Finance, Will Peck, head of digital assets at WisdomTree, explained that tokenized gold allows for around-the-clock trading and direct peer-to-peer (P2P) transactions. He added that gold and Bitcoin act as complementary stores of value, both serving as deflationary assets. Ian Kane, CEO of fintech company Firepan, said tokenized gold appeals to investors as it enables them to retain ownership, leverage their holdings for loans, and generate extra yield, while preserving their principal against debasement or devaluation. These views are not new. Earlier this month, Robinhood Markets CEO Vlad Tenev described tokenization as “a freight train” that “can’t be stopped,” predicting it will eventually transform the global financial system. Similarly, in his annual letter to investors in April, BlackRock CEO Larry Fink said the tokenization of assets could fundamentally reshape the way people invest. By digitizing ownership, tokenized venture capital funds could move beyond their closed circles, giving ordinary investors a stake in early-stage innovation and greater control over their capital. Venture capital faces hurdles in tokenization pushWhile tokenization promises greater accessibility and liquidity, not all market segments are ready for it. According to TheStreet, tokenized venture capital (VC) funds could open a traditionally closed market to more investors, but the process is more complex than it appears. In an interview with TheStreet, Elena Obukhova, founder of Supermoon Ventures, said that liquidity, not technology, is the main obstacle. Unlike tokenized company shares that can be traded freely on public markets, VC funds invest in private startups whose value may take years to materialize through an exit or acquisition. Allowing such funds to trade freely could increase volatility and pressure founders, as interim valuations might distort perceptions and weaken confidence in early-stage ventures. Still, the promise of tokenized venture finance remains within reach. Firms are testing models that limit trading periods, protect investor data, and refine valuation methods to better reflect the illiquid nature of startup investments. Since liquidity events such as initial public offering (IPOs) or acquisitions typically occur only every one to two years for early-stage startups, the path forward will depend on creating systems that can maintain stable and accurate valuations in the interim. Tokenization is rapidly emerging as a transformative force in the financial world, offering greater accessibility, liquidity, and efficiency. As more assets, from gold to venture capital, make their way onto the blockchain, the potential to reshape investment and trading markets grows. While challenges remain, particularly around liquidity and valuation in sectors like venture capital, the continued advancements in tokenization demonstrate its key role in the future of finance.