Korean Crypto Exchange Alliance Launches Its Official Website

BitMEX CEO Calls for an End to Internal Market MakersIn a recent interview, Stephan Lutz, the acting CEO and group CFO of 100x Group, the parent company of Seychelles-headquartered global crypto exchange BitMEX, expressed his belief that crypto exchanges should phase out their internal market-making teams.Photo by Joe Roberts on UnsplashProp trading desks unnecessarySpeaking with The Block, Lutz argued that with the growth of institutional liquidity providers and high-frequency traders (HFTs) in the market, proprietary trading desks are becoming unnecessary.Lutz stated: “You have enough HFTs out there and prop shops that can perform that function.” He was referring to the role of liquidity providers in filling gaps in the market. He made these comments in response to the emergence of information earlier this week that raised questions about internal trading practices at Crypto.com, a Singapore-based exchange.BitMEX, once the world’s largest crypto derivatives exchange, also used to employ internal traders who acted as market makers. However, Lutz explained that BitMEX’s internal trading team, named Arrakis Capital, now functions primarily as a “treasury desk.” He sees this transition as a natural evolution for crypto exchanges in a market that has matured and attracted more institutional liquidity providers.Arrakis Capital currently performs limited functions, including converting commission fees earned in Bitcoin into fiat currency for operational purposes, hedging BitMEX’s exposure to tokens held as inventory, and making markets for BitMEX’s token $BMEX. Lutz clarified that Arrakis’s market-making activities are limited because external market makers find the token’s liquidity insufficient.Regarding profitability, Lutz stated that Arrakis earns “very minor returns” of up to $100,000 per month from holding T-Bills, but it incurred losses last year. He noted that Arrakis used to play a more significant market-making role when BitMEX dominated the crypto futures market. However, he assured that the trading desk was always segregated, despite accusations in the past.Fee structuresLutz acknowledged that exchanges with internal trading teams have faced increased scrutiny since the controversies surrounding Alameda Research and FTX. To differentiate between benign internal trading teams and hedge fund-like operations, Lutz highlighted several factors, including the separation of client funds and house funds, access to sensitive data, and the ability to move markets on their own exchange. Fee structures also play a role, with low or no transaction fees potentially signaling a market-making motive rather than serving as a counterparty.Lutz’s perspective suggests that crypto exchanges should rely on external liquidity providers and HFTs rather than maintaining internal market-making teams. He argues that the market has evolved. At this point he feels that these teams are no longer necessary, due to the presence of established players within the digital assets space.As regulatory scrutiny grows, ensuring transparency and avoiding conflicts of interest become crucial for maintaining trust within the crypto exchange ecosystem. The digital assets industry is far from arriving at a mature stage in its development. While many in the industry have found the stance taken by regulators to be unhelpful, the industry itself must also demonstrate its ability to iteratively move towards best practice, without that being a knee-jerk response to regulatory enforcement.

Korean Blockchain Fund Supports Web3 Game Developer Growth in Southeast AsiaHashed, a Seoul-based blockchain venture fund, has spearheaded a seven-figure investment round for Decentralised Gaming Ventures (DGV), a Web3 game development support entity primarily serving Southeast Asia (SEA), according to a press release. This funding will help DGV in its mission to foster the growth of promising game developers in the region.Photo by Timo Volz on PexelsSEA as a Web3 Game HubDGV has set its sights on making SEA a hub to nurture game developers and bolster the Web3 game sector. The company has already established a studio in Singapore, where 32 talented game developers work in eight different teams, providing them with the necessary resources to design and introduce new gaming titles. Over the past year, DGV has supported the release of 15 games.Studio in SingaporeDGV further plans to help game developers in the region through alliances with renowned entertainment intellectual property (IP) owners. In the past, the company has teamed up with Singapore-based designer toys and art collectibles studio Mighty Jaxx, and recently appointed gaming veteran Derrick Sim as its Chief Operating Officer. Sim has expertise in collaborating with major entertainment IPs, including Marvel, StarCraft II, and FIFA Online 2.DGV CEO Samson Oh articulated the firm’s aspiration to forge an environment that empowers developers in SEA to create blockchain-powered Web3 games, anticipated to be the gaming industry’s future. With the support from Hashed, DGV looks to reinforce the region’s reputation as a fertile ground for innovative game developers.Hashed’s Co-Founder Ryan Kim commended DGV’s effective leadership, SEA governmental backing, and firm groundwork for expansion in the Web3 gaming industry. The investment in the firm signals the Korean fund’s belief in DGV’s seasoned team and its mission to leverage IP accessibility to advance its digital ownership initiative in the gaming realm.

The governor of South Korea's Financial Supervisory Service (FSS) met with the United States Securities and Exchange Commission (SEC) Chair Gary Gensler, according to Korean media outlet Newsis. The meeting took place during FSS Governor Lee Bok-hyun's business trip to the U.S. The meeting with the SEC chair was pre-arranged earlier this year, as previously reported by crypto media CoinNess.  Governor Lee reportedly had high-ranking meetings with officials from the SEC and Commodity Futures Trading Commission (CFTC) between May 14 and May 16. Photo by Daniel Bernard on UnsplashDuring his meeting with the SEC chair, Governor Lee discussed various financial and cryptocurrency regulatory issues including the recent approval of spot Bitcoin ETFs, and reaffirmed the need for close cooperation between two countries in such oversight efforts. In particular, the two regulators came to an agreement to reinforce cooperation in investigation into unfair trading practices associated with securities and virtual assets. He also met with CFTC Chairman Rostin Behnam to share the recent trends regarding virtual asset legislation in the U.S. and agreed to strengthen information sharing between the two countries. The details of the meeting agendas remain confidential, as mutually agreed upon by the two supervisory organizations.   International financial regulatory cooperation Governor Lee’s latest meetings with U.S. financial regulators followed his attendance at the meeting for the Group of Central Bank Governors and Heads of Supervision (GHOS) held in Basel, Switzerland, on May 13. The GHOS is the oversight body of the Basel Committee on Banking Supervision (BCBS).  During the GHOS meeting, participants reached a consensus on the urgency of swiftly implementing Basel III, a set of bank regulation standards. Two-thirds of member countries are set to partially or completely adopt Basel III by the end of this year.  Furthermore, the member countries agreed to postpone the implementation of the Prudential Treatment of Banks' Exposures to Cryptoassets to Jan.1, 2026, considering the regulatory framework is currently under amendment.