Tokyo Government Launches Initiative to Support Security Token Businesses

Thailand has taken steps to tighten controls on digital asset mule accounts and overseas crypto peer-to-peer (P2P) platforms in an effort to combat cybercrime.Photo by Growtika on UnsplashLegislative amendmentsOn April 8, the Securities and Exchange Commission (SEC), a local regulator, published a statement explaining that the Thai cabinet has passed a resolution approving a number of amendments to the Southeast Asian nation’s digital asset business law and its cybercrime law. The regulator asserted that the amendments are designed to “strengthen measures against cybercrime and mule accounts, enhancing the security of public financial transactions and improving the effectiveness of combating online scams.” The amendments won’t become effective until such time as they are published in the Government Gazette of Thailand, an official public journal that acts as a primary source for Thai law. Mule accountsOne aspect that has been addressed is the enhancement of measures taken in an effort to block digital asset mule accounts. Criminals utilize mule accounts in an effort to launder the proceeds of crime.  While this happens with conventional bank accounts, it is also now happening with digital asset exchange accounts and digital asset wallets. Accounts may have been established for legitimate purposes but later fall under the influence of criminals who utilize them for money laundering. According to a report by the Bangkok Post last month, the Thai SEC had been collaborating with the Thai Digital Asset Operators Trade Association (TDO) and digital asset businesses in order to formulate these new measures.  The standard was also established following consultation with the Bank of Thailand, the Cyber Crime Investigation Bureau, Central Investigation Bureau, the Anti-Money Laundering Office and the Thai Bankers' Association. It is hoped that these enhanced mechanisms will lead to earlier detection of unusual customer behavior, enabling the authorities to intervene at an earlier stage to block mule accounts.Going forward, the regulator will collaborate with the TDO in monitoring and evaluating implementation of the new measures. Individuals who allow their digital asset accounts to be used by criminals will face up to three years' imprisonment and a fine of up to 300,000 Thai baht ($8,765). Blocking P2P platformsAnother change is being implemented in respect of offshore crypto P2P platforms. The objective of that particular measure is to deter and prevent the use of such platforms by investors within Thailand.  It’s envisaged that the Ministry of Digital Economy and Society will now be enabled to move more swiftly in blocking website and application access to these foreign P2P platforms. Such offshore platforms will be deemed to be attempting to solicit local investors if they offer payment options in Thai baht, provide online services or applications using the Thai language or if they accept payments through Thai bank accounts. Earlier this month, Thai law enforcement raided five unlicensed crypto firms. The raid led to the arrest of 11 individuals, charged with illegally operating e-money services related to enterprises responsible for a combined $29 million turnover. 

INDODAX, Indonesia’s largest virtual asset trading platform by trading volume, has acquired full licensing in Indonesia from the local regulator. That’s according to a report published by local media outlet VOI. The license, a Physical Crypto Asset Trader (PFAK) license, has been awarded to the company by Indonesia’s Commodity Futures Trading Supervisory Agency, better known as BAPPEBTI.  The license will place INDODAX in a complaint position within the Indonesian market, relative to local regulations. The business has been issued certificate number 10/BAPPEBTI/PFAK/12/2024 by the regulator, its approval certificate as a Physical Crypto Asset Trader.Photo by Mark König on UnsplashMandatory registration requirementIn December 2023 the authorities in Indonesia set out a mandatory requirement for crypto trading entities to register with the Commodity Future Exchange (CFX). CFX is Indonesia’s national crypto bourse, while INDODAX is a member. As of April 2024, 35 crypto exchanges had been registered with the regulator. CFX has been given the mandate to monitor crypto exchange operations, to safeguard investors by ensuring exchanges abide by local regulations. Fendy Tan, chief financial officer (CFO) at INDODAX commented on the firm’s recent licensing milestone, stating: "We are grateful to BAPPEBTI and CFX for the trust given through this full license. The long process that must be passed reflects our commitment to providing the best protection for users. The license number 10 also has a special meaning, which symbolizes perfection, and symbolizes the 10-year journey of INDODAX in leading the crypto industry in Indonesia."  Liquidity and SOP requirementsIn order to acquire this license INDODAX had to comply with BAPPEBTI Regulation Number 8 of 2021 and Number 13 of 2022. It has also had to ensure a minimum paid-up capital of 100 billion Indonesian Rupiahs ($6,158,000), and a minimum equity of IDR 50 billion ($3,079,000). Furthermore, the company has had to implement a set of standard operating procedures (SOPs), together with achieving ISO certification in accordance with global security standards, with specific emphasis on complying with regulations to safeguard customer funds according to the balances held on account of fiat currency and digital assets by INDODAX customers. INDODAX is understood to have 7.1 million customers while a transaction volume of 109 trillion Indonesian rupiahs was reached for the period January to November 2024. BAPPEBTI had extended a deadline for the crypto licensing of exchanges late last year, a move welcomed at the time by INDODAX CEO Oscar Darmawan. Darmawan said that the move would strengthen the industry by ensuring that market participants were compliant with recently introduced regulations. While this licensing milestone is a positive for INDODAX, the firm had faced challenges in 2024. In September it emerged that the platform had been compromised with the loss of around $18 million in digital assets. Meanwhile, the authorities in Indonesia had planned to switch crypto market oversight from BAPPEBTI to the Financial Services Authority (OJK) by Jan. 12. However, a recent report published by the Jakarta Globe suggests that the Indonesian government has yet to finalize this regulatory transfer.

OKX NFT Marketplace hits the front on trading volumeIn the non-fungible token (NFT) space, OKX’s NFT marketplace has emerged as the leader in daily trading volume, surpassing long-standing frontrunners such as OpenSea, Blur and Magic Eden.According to data from decentralized applications (DApp) tracker DappRadar, on Dec. 18, the OKX NFT Marketplace had recorded a 24-hour trading volume of $50 million. In more recent trading, that has reduced to around $35 million. Nevertheless, it maintains its lead over its main competitors, whose combined 24-hour trading volume stands at approximately $24 million.Photo by Kanchanara on UnsplashOrdinals driving volume uptickThe surge in trading volume can be attributed to OKX’s support for Bitcoin Ordinals NFTs and BRC-20 tokens. Notably, the NFT transaction volume on Bitcoin experienced a substantial increase, reaching $121.8 million between Dec. 10 and Dec. 17.Unlike traditional NFTs, Ordinals do not rely on smart contracts pointing to a digital asset. Described as digital artifacts by developer Casey Rodarmor, they lack smart contract features, making their trading reliant on decentralized exchanges and wallets.The Ordinals protocol has been made possible by the Bitcoin Taproot upgrade, which was implemented in November 2021. The upgrade allows digital files to be inscribed on satoshis, the smallest monetary denomination on the Bitcoin network, each with a unique number or ordinal.Strategic focus on BRC-20The OKX NFT Marketplace’s strategic focus on the BRC-20 token standard has also played a role in its success. Collaborating with UniSat, a developer of Ordinals wallets, OKX created an indexing mechanism for BRC-20 transactions built on ordinal inscriptions, further solidifying its position in the market.The Ordinals protocol has not been without controversy, with some, including Adam Back, CEO of Blockstream, criticizing it as a misuse of Bitcoin transaction blockspace. Despite the controversy, Ordinals have gained momentum, contributing to $367 million in sales volume on the Bitcoin network, surpassing Ethereum and Solana.Ordinals and the BRC-20 standard have generally been a boon for Bitcoin miners, boosting their revenues through increased fees. This incentivizes miners to secure the network. Over 49 million transactions have resulted in over 2,250 BTC in transaction fees. Around 6 p.m. UTC on Monday, bitcoin fees are averaging out at $38.43 per transaction.Beyond Bitcoin Ordinals, the broader NFT space has seen a resurgence, with the collective volume nearing $1 billion in November. During that month, the average value of NFT transactions experienced a notable 114% increase, rising from $126 to $270. This suggests a willingness among users to engage in higher-value trades compared to previous months.Speaking with The Block, Nick Ruck, COO of ContentFi Labs, a community-owned Web3 tool suite, had this to say on the development:“OKX has become the number one NFT marketplace after enabling trading of BTC Ordinals NFTs. Blur and OpenSea have not yet allowed trading of these Bitcoin-based NFTs, so they’ve started to fall behind in terms of volume due to the huge demand of Ordinals.”