Web3 Offers Potential for Japan to Rediscover its Mojo

Boyaa Interactive Greenlights $5 Million Investment in Bitcoin and EtherBoyaa Interactive International Limited, a Hong Kong-based investment holding company with a track record in developing online chess, card, and puzzle games, has made a strategic move with a proposed investment in digital assets.The company’s board of directors has recently given the green light for the allocation of a substantial budget amounting to $5 million for the purpose of acquiring cryptocurrencies.Photo by Traxer on UnsplashWeb3 positioningThe Chinese company, incorporated in the Cayman Islands, announced the move as Boyaa Interactive seeks to position itself for a dynamic shift into the realm of Web3.While the exact allocation breakdown was not detailed in the disclosure, the company outlined that its primary focus would be on procuring established cryptocurrencies, specifically Bitcoin (BTC) and Ether (ETH). Boyaa Interactive intends to execute these purchases through regulated and licensed trading platforms within the upcoming year.In a letter addressed to its shareholders and potential investors, the company emphasized the strategic nature of this decision:“The purchases of cryptocurrencies are for the consideration of the Group’s future business layout into the field of Web3. The Board is of the view that the purchases of cryptocurrencies (including mainly Bitcoin (BTC) and Ether (ETH)) by the Group are in the interests of the Company and its shareholders as a whole.”A challenging recent historyThe move towards cryptocurrencies is a significant pivot for Boyaa Interactive, a company that has navigated a series of challenges in recent years. In 2018, the company’s Chairman and CEO, Zhang Wei, faced legal troubles and was sentenced to 12 months in prison for bribery, which led to his resignation from all executive and management positions.Subsequent restructuring saw Dai Zhikang stepping in as the new Chairman of the board, while Tao Ying assumed the role of an Executive Director and Chairman of the Nomination Committee.Financially, Boyaa Interactive experienced a tough period marked by revenue contraction. The company reported revenue declines over the course of 2018, largely attributed to a governmental crackdown on online poker applications and the discontinuation of poker as a recognized competitive sport. Regulatory risks stemming from the Chinese government’s stance on Texas Hold’em poker games resulted in a substantial falloff in revenue by comparison with past performance.Funds seizureThese challenges cascaded into the following year, when the company encountered a substantial freeze on its funds. In 2019, a Chinese court ordered the freezing of RMB 635 million (approximately $88.6 million) belonging to Boyaa Interactive, following the legal actions against Zhang Wei and his associated entities.One of the company’s subsidiaries, Boyaa Shenzhen, was found guilty of offering bribes. The company responded by clarifying that the frozen funds could potentially be confiscated if linked to Zhang’s misconduct. However, Boyaa Interactive also stressed that it had not been directly implicated in the case, thus mitigating the legal risks to the broader organization.Amidst these adversities, Boyaa Interactive’s decision to invest in cryptocurrencies demonstrates its openness to adapting to changing technological landscapes and exploring new opportunities in Web3.

Japan’s Blockchain Group Requests Crypto Tax Revision for Web3 AdoptionThe Japan Blockchain Association (JBA) has submitted a request to the Japanese government to reform the current cryptocurrency tax system, as it believes the existing framework hampers the growth of the Web 3 industry and discourages public engagement with cryptocurrencies. The association believes the tax revision would help position Japan as a leading country in the Web3 industry and boost the nation’s economy through these changes.Photo by Su San Lee on UnsplashGreater tax exemptionLast month, the Japanese National Tax Agency announced that companies would no longer be taxed on unrealized gains from cryptocurrencies they hold, provided they are the issuers of those tokens. While this represents a positive step, the JBA considers it insufficient in fostering Web3 growth. In light of this, the blockchain group urges the government to extend this exemption to also cover holdings of tokens issued by third parties.Separate taxationAdditionally, the JBA proposes a shift in the tax treatment of personal cryptocurrency transactions. It advocates for a separate taxation approach with a fixed tax rate of 20% for individual transactions, including crypto derivatives. This modification is seen as a way to adapt to the increasing prevalence of crypto asset transactions in the emerging Web3 era.Crypto-to-crypto trading tax abolitionUnder the current system, individuals trading crypto assets for other crypto assets are subject to income tax on the profits earned from each transaction. However, with the increasing variety of crypto assets and the growing prominence of crypto asset transactions in the emerging Web3 era, the JBA is advocating for the abolition of income tax on transactions between cryptocurrencies. The complexities involved in taxing such transactions within the evolving Web3 landscape have prompted the group to propose a reevaluation of the taxation approach, seeking a more favorable environment to foster the growth of the crypto industry.Japan has demonstrated its proactive approach in promoting and embracing the Web3 industry. At the annual Japanese Web3 conference, WebX, held in Tokyo last week, Prime Minister Fumio Kishida delivered a video address to mention Web3 as part of “the new form of capitalism,” acknowledging its capacity to stimulate economic growth and tackle societal challenges. Minister Kishida highlighted the Japanese government’s dedication to creating a supportive and conducive environment for the advancement of Web3 projects.

Nomura’s Crypto Subsidiary Secures Dubai VARA LicenseLaser Digital Middle East FZE, the digital asset subsidiary of Japanese global financial services group Nomura, has successfully obtained an operating license from Dubai’s Virtual Asset Regulatory Authority (VARA).This significant development, announced via a statement published to Laser Digital’s website on Tuesday, comes as part of Nomura’s strategic efforts to make a strong presence in the digital asset space.Photo by Paul MARSAN on UnsplashOpportunity to expand servicesThe newly acquired Virtual Asset Service Provider (VASP) license empowers Laser Digital to offer broker-dealer services and provide virtual asset management and investment solutions within the emirate. Additionally, the license will enable the company to carry out trading and asset management operations in the near future. This could potentially include the provision of over-the-counter (OTC) services, together with a diverse range of digital asset investment products.Jez Mohideen, the CEO of Laser Digital, expressed his confidence in VARA’s meticulous and collaborative process, which assures institutional investors looking to get involved in this emerging asset class. “We are very grateful to VARA for approving our Operating License. VARA’s thorough and consultative process provides institutional investors with the assurance they require to engage in this asset class. With the license now in place, we are looking forward to Laser’s growth over the coming years,” he stated.Established in September 2022 under the guidance of Nomura, Laser Digital was the brainchild of Steven Ashley, the former head of Nomura’s wholesale division, alongside Mohideen, who served as the firm’s former Chief Digital Officer and Co-Head of Global Markets for Europe, Middle East, and Africa (MENA). The company is headquartered in Switzerland, with sub-offices located in Dubai and London.Dubai’s rapidly growing crypto ecosystem has garnered global attention, especially after the establishment of its own virtual asset rules and the formation of VARA in March 2022. In February, the regulatory body issued the “Full Market Product Regulations,” comprising four compulsory rulebooks and activity-specific guidelines that delineate the framework for Virtual Asset Service Providers (VASPs).Following in Binance’s footstepsLaser Digital’s recent achievement coincides with Binance’s continuous efforts to solidify its presence in the United Arab Emirates. Its license award comes hot on the heels of Binance having achieved the same milestone. On Monday, Binance’s Dubai subsidiary, Binance FZE, received an operational Minimum Viable Product (MVP) from VARA, granting it permission to operate cryptocurrency exchange and virtual asset broker-dealer services locally.Apart from Binance, only two other entities, digital asset custodians Komainu MEA and Hex Trust MENA FZE, currently hold operational MVP permits in the region. Notably, crypto exchange BitOasis also secured a conditional license but it has faced a suspension from VARA for non-compliance with mandated conditions.Laser Digital’s successful licensing and entry into Dubai’s crypto landscape further enrich the diversity of players in the region’s digital asset market. The involvement of reputable financial institutions like Nomura contributes to the establishment of a robust and well-regulated ecosystem in the United Arab Emirates. The license paves the way for Laser Digital to serve institutional investors and individual clients alike, offering innovative digital asset solutions while complying with the region’s regulatory standards.