Crypto emerges as topic in Indonesian election campaign

Asian Firms Feature in Ledger’s Institutional Trading OfferingCrypto hardware storage device provider Ledger has recently introduced the Ledger Enterprise Tradelink network with the participation of a number of well-known Asian crypto platforms.Through its Ledger Enterprise Tradelink offering, Ledger aims to provide a robust and open trading platform specifically designed for institutional investors. The company announced its move into the institutional trading technology market via a blog post published to its website on Wednesday.Photo by Kanchanara on UnsplashMeeting institutional needsThis platform aims to meet the unique risk management and regulatory requirements of institutions seeking to participate in the cryptocurrency market.Given recent events, such as the bankruptcy of the FTX crypto exchange, market participants are increasingly seeking transparency and alternatives to traditional vertically integrated crypto exchanges. There are also concerns regarding the future of market infrastructure in light of the recent lawsuits filed by US regulators against major exchanges like Binance and Coinbase.Sebastien Badault, the VP of Metaverse & NFTs at Ledger, highlighted these concerns and emphasized the importance of addressing them. He explained that the Ledger Enterprise Tradelink network enables a seamless connection between custodians, OTC brokers, and exchanges, allowing traders to execute trades without having to hold funds on the exchange itself.This unique feature serves to minimize the risks associated with centralized exchanges. Badault further predicted that as regulations evolve, fund managers will likely be required to distribute their risk across multiple custodial partners, making the Ledger network an appealing solution.Asian partnershipsTo bring the enterprise-grade platform to life, Ledger has partnered with several prominent crypto exchanges and broker firms. These include international companies like Bitstamp, Uphold, CEX.IO, Wintermute, Coinsquare, NDAX, Damex, Flowdesk, and YouHodler. Additionally, Asian platforms feature strongly, represented by the likes of Seychelles-headquartered crypto exchange Huobi, Singapore-based platform Crypto.com, and Thailand’s Bitazza, a digital asset platform.Other participating companies comprise of Komainu, a digital asset custodian backed by Japanese financial services company Nomura, Tokyo-based institution-facing crypto finance firm, Crypto Garage and Hong Kong’s Kryptodian, a digital asset custodian.Other international partners include digital asset custodians TetraTrust and Etana. The partnership depth that Ledger has put in place with its Ledger Enterprise Tradelink product ensures that firms utilizing the network are not locked into a single custodial provider.Crypto.com President & COO, Eric Anziani, praised Ledger’s innovative Trading Operation technology, emphasizing its role in enhancing security and fostering a regulation-friendly landscape for institutional trading. The collaboration with Ledger enables Crypto.com to participate in the Ledger Enterprise Tradelink network, expanding their offerings for institutional clients and strengthening their position within the market.Ledger Enterprise offers real-time tracking of collateral balances and operational status for all participants, providing enhanced transparency and operational efficiency. Furthermore, the platform boasts zero transaction fees, making it a cost-effective solution for institutional investors, as highlighted in the press release.This initiative by Ledger aligns with the industry’s growing demand for regulatory compliance and effective risk management solutions. Consequently, Ledger’s entrance into this space marks an important milestone in facilitating institutional participation and driving further adoption of cryptocurrencies.

Japan’s FSA Proposes Tax Exemption for Unrealized Crypto GainsThe Financial Services Agency (FSA) of Japan has taken the step of putting forward amendments that provide a notable tax exemption for unrealized gains on cryptocurrency holdings.Photo by Erik Eastman on UnsplashFSA proposalThe move is significant in that it spares domestic companies from the standard 30% corporate tax rate typically imposed on digital assets up until now. According to reports in local media, that proposal was detailed in a comprehensive 16-page document outlining various regulatory modifications.The most pivotal change within this document is the exemption of domestic companies from the annual “unrealized gains” tax on cryptocurrencies. Unlike some countries that only tax crypto assets when they are converted into fiat currency, Japan currently enforces an annual tax on these digital assets.2023 tax reform agendaThe proposed amendment has garnered support from the Ministry of Economy, Trade and Industry, indicating its potential passage. These discussions are part of Japan’s broader tax reform agenda for 2023, suggestive of the Asian nation’s interest in fostering a favorable environment for the blockchain and cryptocurrency industries.It is important to note that this tax exemption applies exclusively to companies that issue their own tokens and does not extend to entities solely involved in investing in other digital currencies. Additionally, individual crypto investors will still be subject to a maximum income tax rate of 55% on earnings exceeding JPY 200,000 ($1,355) related to cryptocurrency, categorized as “miscellaneous income.”The exemption is structured in a way that excludes these digital coins when assessing a company’s asset market value, provided specific conditions are met. Presently, Japanese law mandates that companies holding crypto assets must pay taxes on unrealized gains at the end of each tax period.To qualify for the tax exemption, a company must meet specific criteria outlined by the tax authority. Firstly, the company must be the issuer of the cryptocurrency in question. Additionally, it must retain continuous ownership of the crypto asset after issuance, while the asset itself remains subject to transfer restrictions.Blockchain ambitionsThis development aligns with Japan’s broader ambition to nurture and expand its blockchain and cryptocurrency sectors. Prime Minister Fumio Kishida recently articulated a vision for a “new form of capitalism,” emphasizing the importance of fostering innovation and growth in emerging industries, inclusive of the Web3 sector. As Japan moves forward with these changes, it signals its interest in creating a conducive environment for blockchain and crypto ventures to thrive.Over time Japan has been iteratively building a framework in respect of digital assets. In 2017 the country recognized Bitcoin as a legitimate property in accordance with the Payment Services Act (PSA). That same year, the Tax Agency classified crypto earnings as miscellaneous income. In 2020, crypto assets were included in Japan’s fund settlement law. Around the same time frame, the FSA brought in the requirement for crypto exchanges to register and obtain a license.These amendments also form part of a series of changes that the Japan Blockchain Association (JBA), an industry advocacy group, has been canvassing for. The proposed changes reflect a pragmatic approach to taxation, doing away with a paper profits taxation treatment in favor of a more progressive approach.

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.