UAE Starts to Accept Crypto License Applications

Bithumb and Korbit Struggle to Gain Traction Despite Zero Trading FeesSouth Korean cryptocurrency exchanges Bithumb and Korbit have recently eliminated trading fees, but their bold decision hasn’t yielded much results. Bithumb was the first to implement this change and attracted users for about a week, but it is now seeing a loss in market share. Korbit, following Bithumb’s example, is also struggling to achieve meaningful outcomes.Photo by Alexander Grey on UnsplashLimited impactLocal media outlet Chosun Biz used data from crypto data platform CoinGecko to draw this conclusion. On October 26, Korbit’s daily trading volume represented 0.19% of the total trading volume among South Korea’s top five crypto exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax). This figure marked a 0.14 percentage point increase compared to the 0.05% recorded on October 19. Korbit had implemented a zero trading fee policy at 9 a.m. (KST) on October 20. Additionally, they launched a promotion offering KRW 5,000 ($3.69) worth of bitcoin to users who transferred virtual assets totaling KRW 1 million or more from Travel Rule-compliant exchanges to Korbit. While the promotion did contribute to Korbit’s market share, it still remains below 1%.Bithumb’s performance showed some improvement, albeit briefly. As of October 26, Bithumb’s market share stood at 18%, marking a 4.7 percentage point increase from its 13.3% share on October 3, the day before it eliminated trading fees. However, it’s worth noting that its market share had reached almost 30% shortly after the promotion’s launch. This indicates that its strategy is losing efficacy over time.The less-than-enthusiastic results from their daring marketing endeavors can be attributed to their inability to draw in retail investors. To begin with, Upbit, the leading player in the market, had already been providing a relatively low fee of 0.05%. Furthermore, adapting to new user interfaces on these exchanges posed a challenge. Zero trading fees weren’t attractive enough for crypto investors to leave their current platforms.Trading volume mattersIn the case of Korbit, its lower trading volume was a disadvantage when it came to attracting users. On crypto exchanges, a higher trading volume typically translates to faster trade executions. As a result, users of Korbit might experience delays in executing trades at their preferred price.Jeong Hye-won, a research associate at crypto data analytics platform Xangle, told Chosun Biz that users on exchanges with lower trading volumes tend to experience slippages due to slower transaction speeds and sparsely populated order books. A slippage means the difference between the initially placed order price and the executed order price. Jeong further explained that Korbit’s zero trading fee policy didn’t have a significant impact because it offers fewer listed tokens compared to Upbit and Bithumb.There is speculation that the free-trading fee promotions introduced by Bithumb and Korbit, despite their revenue sacrifices, might conclude sooner than initially anticipated due to their perceived ineffectiveness. Bithumb derives 99.95% of its revenue from trading fees, while Korbit relies on trading fees for 99.79% of its income. An industry insider has commented that trading fees play a vital role in an exchange’s revenue, and given Bithumb’s reported loss in earnings during the second quarter, there are concerns about their capacity to sustain this strategy.

Bithumb META Unveils Naemo World: A Sneak Peek into Immersive Metaverse ProjectBithumb META, the metaverse subsidiary of leading South Korean cryptocurrency exchange Bithumb, has unveiled a demonstration video of its metaverse project, Naemo World.Photo by julien Tromeur on UnsplashA glimpse into the virtual urban realmShowcased on the official YouTube channel, the 20-second video clip provides a glimpse into a virtual urban landscape that features both indoor and outdoor environments. Naemo World, a creation brought to life with Epic Games’ advanced 3D creation tool Unreal Engine 5, replicates intricate details such as the texture of fashion items, encompassing garments and accessories.More collaborations to enhance user experienceSpeaking about this development, Bithumb META CEO Cho Hyun-sik said, “The Naemo World demo video offers just a brief preview of the extensive range of content we have created thus far.” Cho added, “While our focus lies in the development of a broad and captivating content portfolio, we strive to create a multitude of practical applications by integrating content into tangible real-world products and services. To achieve this and expand our ecosystem, we are looking forward to collaborating with domestic and international partners across diverse industries.”Presently, Bithumb META is in collaboration with innovative companies such as tech firm Tencent Cloud and 3D fashion design software developer CLO. With an eye toward expanding the user experience within the metaverse, the subsidiary is poised to establish further partnerships.The forthcoming official launch of Naemo World, scheduled for next year, is projected to contribute to bolstering Bithumb’s endeavors to diversify its business ventures and foster synergistic growth.

Taiwan to Restrict Offshore Non-Complaint ExchangesTaiwan’s Financial Supervisory Commission (FSC) has been working towards taking proactive steps to regulate the cryptocurrency industry within its borders recently. One key guiding principle it has developed is to impose strict regulation on offshore crypto exchanges operating in Taiwan.Photo by Vas on UnsplashTen guiding principlesTaiwan’s Central News Agency reported on Thursday that in an effort to ensure compliance and protect consumers, the FSC has developed ten guiding principles for virtual asset service providers (VASPs). These principles are set to be officially released by the end of this month, according to a government official.The guiding principles will encompass several important aspects of the crypto industry. They will emphasize the need for enhanced information disclosure, requiring businesses to establish clear review standards for the listing and delisting of virtual assets. Additionally, there will be a focus on ensuring the separation and proper custody of assets belonging to both companies and customers.Focusing on offshore complianceThe FSC intends to make it clear that offshore crypto exchanges must adhere to proper compliance registration if they want to conduct business onshore. The move is in line with what appears to be a commitment by the Taiwanese authorities to promote responsible and secure cryptocurrency operations.One particularly significant restriction is the prohibition of illegal solicitation of business by foreign crypto firms. The FSC is determined to enforce this rule strictly. Foreign VASPs that fail to register according to company law and declare their compliance with anti-money laundering regulations to the FSC will be barred from soliciting business in Taiwan or catering to domestic residents.It’s worth noting that Taiwan has been proactive in implementing anti-money laundering laws for VASPs since July 2021. Although this particular measure has been in place, the cryptocurrency industry in Taiwan has largely operated in a regulatory vacuum. However, recent developments suggest a shift towards greater oversight and accountability.One notable example is Binance, the world’s largest cryptocurrency exchange, which has initiated the process of registering for anti-money laundering compliance in Taiwan. Despite not being fully regulated in the country, Binance has established a local entity, “Binance International Limited Taiwan Branch (Seychelles),” and received government approval for company registration.Building a regulatory frameworkIn addition to these regulatory efforts, the Ministry of Economic Affairs has proposed the creation of a new business category within relevant regulations. This move aims to facilitate the formation of cryptocurrency-related industry associations, encouraging the development of self-regulatory guidelines.The forthcoming guiding principles for VASPs are expected to provide much-needed clarity and structure to the rapidly evolving world of cryptocurrencies within Taiwan’s borders.Many leading jurisdictions have been behind the curve in developing a clear, workable regulatory framework for crypto. That has led to many exchanges establishing themselves in offshore locations where light touch regulation is applied. It’s highly likely that the Taiwanese have examined the fallout from this development, best exemplified by the spectacular collapse of Bahamas-based FTX last November.