UAE Starts to Accept Crypto License Applications

Binance, in collaboration with Gulf Innova, a subsidiary of Gulf Energy Development, has officially opened its joint venture crypto exchange, Binance Thailand, for public trading. Challenging the market incumbentThis move had been eight months in the making, signaling Binance's entry into the Thai crypto exchange market, following an announcement in 2023 that it intended to extend its offering to Thailand. While Binance is the largest global crypto exchange platform, in Thailand it will be challenging the dominance of an incumbent exchange. Bitkub is based in Bangkok, currently holding around 77% of the market share, with a daily volume of approximately $30 million, primarily trading the Thai baht and Tether USDT pair.Photo by Sara Dubler on UnsplashRegulatory approvalThe launch comes after Binance received regulatory approval from the local Securities and Exchange Commission (SEC) in 2023. Initially introduced on an "invitation-only" basis, the exchange is now accessible to all eligible users, with Binance having followed through on its plans to expand its presence in the region. In a statement released on Tuesday, Binance TH announced the implementation of a dedicated order book tailored for Thai baht trading pairs. Users can seamlessly deposit and withdraw local currency through integration with domestic banking systems. Binance has managed to push its service offering forward in Thailand despite regulatory concerns. In the aftermath of the company’s $4.3 billion settlement in relation to securities law violations with the authorities in the United States in November, concerns had been expressed that the charges brought against the firm in the U.S. would challenge the feasibility of the Binance TH venture. At present, the platform focuses solely on spot trading, with a Binance spokesperson revealing ambitious long-term plans for additional services pending regulatory approvals. Nirun Fuwattananukul, CEO of Gulf Binance, expressed gratitude, stating:"We are deeply humbled to finally announce the launch of our local platform to the general public in Thailand. Over the past year, we have been working closely with Thai regulators, putting substantial effort into detailed planning." Binance TH facilitates digital asset exchange services, collaborating with local banks in Thailand in enabling its service offering. The exchange has also partnered with Binance Kazakhstan for brokerage services, operating under the supervision of Thailand’s SEC. Richard Teng, CEO of Binance, emphasized the strategic significance of the venture, stating:“This is a strategic step forward, setting the stage for Thailand’s impending role as a key player in the global digital finance landscape.” No access for foreignersOne limitation of the service pertains to foreign nationals. There is a restriction on access for foreigners residing in Thailand, as Binance TH requires a Thai National Digital ID to complete Know Your Customer procedures. Despite regulatory challenges and tax implications on overseas income from stock and crypto traders announced by the government in September 2023, Binance remains optimistic about the future of crypto trading in Thailand. The exchange released its themes for 2024 report on Jan. 15, outlining key growth areas such as the Bitcoin ecosystem, ownership economy applications, artificial intelligence, real-world assets, on-chain liquidity and institutional adoption.

Energy Theft Results in Crypto Mining Operation Shutdown in BorneoAuthorities in Miri, a city on the island of Borneo in Malaysia, swiftly responded to a tip-off from the public, leading to the successful shutdown of an illegal cryptocurrency mining operation.According to local news source, The Borneo Post, during a well-executed raid, 34 mining servers were confiscated, all of which were illicitly drawing power through cable tapping.Photo by Muhammad Faiz Zulkeflee on UnsplashEnergy thieves turn to miningWhile Borneo offers some of the lowest energy prices in Malaysia, it continues to struggle with the problem of energy theft. That issue has been highlighted via a recent utility announcement. Sarawak Energy, the local energy provider, estimated that the criminal operation caused losses of approximately 6,000 Malaysian ringgits ($1,300) worth of stolen electricity each month.The rise of the Bitcoin mining industry in 2023 has brought about record-high network hash rates and network difficulty. While the growth of miners generally signifies the robustness of the Bitcoin network, smaller operators without the economies of scale enjoyed by larger corporations face challenges.One such challenge is energy generation to power their mining servers. In pursuit of higher profit potential with lower electricity rates, illegal mining operators are drawn to stealing electricity from the grid. By eliminating energy expenses, these illicit miners can accumulate profits and offset equipment costs.Fourth recent instanceThe recent incident marks the fourth major operation in Senadin, where Miri is located, where authorities have cracked down on power theft cases related to cryptocurrency mining in 2023. So far, over 137 Bitcoin mining servers have been seized during these operations.On the other side of the spectrum, legitimate crypto mining companies are actively securing funding to support their mining projects. Riot Platforms, for instance, invested a substantial $162.9 million to acquire 33,280 state-of-the-art equipment from MicroBT, a leading producer of mining machinery.In another example, Coinbase extended a $50 million credit line to Canadian cryptocurrency firm Hut 8 Mining, facilitating its operations. Furthermore, Volcano Energy, a public-private partnership in El Salvador, secured an initial funding of $250 million for its ambitious Bitcoin mining venture.Appropriate mining activityThe spate of recent instances of illegal mining in Borneo acts as a reminder of the importance of regulatory compliance and adherence to the law within the cryptocurrency industry. While the allure of lucrative profits may tempt some to engage in illegal activities, the consequences can be severe. Mining can be a positive societal force when applied within appropriate circumstances.A move by the President of Kyrgyzstan last week to harness crypto mining in order to utilize energy that is otherwise being wasted at the central Asian country’s Kambar-Ata-2 hydropower plant serves as a recent example of a positive use case for the activity.In Texas in the United States, crypto miners are collaborating with those that manage the local energy grid, turning off miners at times when the state is on the brink of suffering blackouts.As the crypto mining landscape continues to evolve, it is essential for both authorities and legitimate operators to work together in finding sustainable solutions that ensure the industry’s growth while maintaining the integrity of the energy infrastructure.

Hong Kong regulator, the Securities and Futures Commission (SFC), has established guidelines for crypto staking service providers. That’s according to a statement published by the SFC to its website on April 7. The guidance is aimed at licensed virtual asset trading platforms (VATPs) and SFC-authorized funds with exposure to digital assets.Photo by Markus Winkler on UnsplashExpanding service offeringThe regulator points out that the guidance on staking falls in line with its recently announced “ASPIRe” roadmap, which is geared towards ensuring that the Chinese autonomous territory remains relevant in its efforts to maintain its status as a global hub for crypto businesses. Expanding product and service offerings within the crypto sector was one of the five pillars of that plan. Smoothing the way for the offering of staking works towards fulfilling that aspect of the ASPIRe plan. Written approvalIn this guidance, the SFC sets out that licensed service providers must obtain written approval from the regulator before any such product can be offered to investors in Hong Kong. That stipulation applies to both VATPs and authorized funds with digital asset exposure. Additionally, VATPs must retain control over staked assets, with no delegation in the custody of such assets to third parties permitted. In the case of authorized funds that include crypto assets, they must stake virtual asset holdings through licensed VATPs and other authorized institutions. Required disclosuresThe regulator has also stipulated that certain disclosures must be made by licensed exchanges to potential customers in respect of staking products. These include the disclosure of all associated risks, full transparency with regard to fees, minimum lock-up periods and custodial arrangements. Commenting on the provision of this guidance, SFC CEO Julia Leung said that the provision of a greater range of regulated services and products is crucial in order to sustain continued growth of Hong Kong’s virtual asset ecosystem. However, she added that any broadening of the range of services offered “must be done in a regulated environment where the safety of client virtual assets continues to be front and centre of the compliance framework for offering such service.”   The SFC outlined that it recognizes “the potential benefits of staking in enhancing the security of blockchain networks and allowing investors to earn yields on virtual assets within a regulated market environment.” The authorities in Hong Kong are not the only ones who recognize the benefits that the incorporation of staking within crypto investment products can bring. Last month, Robert Mitchnick, head of digital assets at the world’s largest asset manager, BlackRock, told the Digital Assets Summit in New York that Ether ETFs would benefit from the addition of staking.  Mitchnick suggested that the current inability to earn a staking yield within such products is a key limitation. He outlined that such a change is dependent upon relevant regulatory changes being implemented in the U.S. A more crypto-friendly climate in the U.S. since U.S. President Donald Trump took office has resulted in various lawsuits being dropped against companies like Coinbase related to the staking services that had been offered. A number of U.S. Ether ETF issuers, including Franklin Templeton, Grayscale and Bitwise, have put forward proposals to the Securities and Exchange Commission (SEC) to have staking included in these products.