Unprecedented surge in trading volumes on HashKey exchange

A recent survey in South Korea found that 20.3% of crypto investors have fallen victim to financial losses. Conducted by the Korea Financial Consumers Protection Foundation in late December, the survey polled 2,500 adults aged 19-69, with respondents able to select multiple loss categories. Investors in their 60s were most vulnerable, reporting a 25.3% loss rate. Exchange-related problems constituted the majority of incidents (72.8%), followed by online chat room scams (44.7%) and investment fraud (35.5%).Photo by Growtika on UnsplashExchange failures lead lossesAmong exchange-related losses, 40.6% of users couldn't sell assets due to system failures, while 11.5% lost digital assets through exchange hacking. Overall, exchange technical issues accounted for 52.1% of reported losses, with another 20.7% losing assets when exchanges closed completely. Chat group scam victims experienced various forms of fraud: 23.2% paid for worthless or false information, while 21.5% suffered financial losses through market manipulation or proxy trading schemes. Investment scams included fake crypto projects or fraudulent firms (18.0%), deceptive exchanges (10.3%), and other scams (7.2%). Most victims (75.1%) reported losses under 10 million won (approximately $6,945), with 34.6% losing less than 1 million won. Due to these relatively small amounts, 67.7% took no action following their losses. Of the 32.3% who sought help through various channels, 73.9% were unable to fully recover their funds. Problem worsening across Asia and beyondThis problem extends beyond South Korea. In neighboring Japan, police reported 19,038 crypto fraud cases in 2023, with damages totaling 45.26 billion yen (about $300 million), according to Chainalysis, citing Japanese National Police Agency data. These figures surpass 2022 numbers, indicating continued growth in fraudulent activities. A recent case highlighted by the Fukushima Minyu Shimbun involved a Soma City woman in her 50s who lost approximately 116.6 million yen ($780,000) to scammers impersonating police officers. The fraud began with a fake customer service call, followed by deceptive claims about fraudulent accounts and threats of arrest, which led her to create cryptocurrency accounts and transfer funds before eventually reporting the scam. Elderly at highest risk as fraud surgesThe FBI's Internet Crime Complaint Center's 2024 report further confirms this trend, documenting 149,686 crypto fraud complaints in the U.S. with $9.3 billion in reported losses—66% higher than in 2023. Notably, people over 60 were the most affected demographic, consistent with the Korean study's findings.

Binance Expands Crypto Offering in Dubai with New LicenseDubai has welcomed one of the biggest players in the crypto sector, Binance, with the Virtual Asset Regulatory Authority (VARA) awarding the firm a new trading license.Photo by Petar Avramoski on UnsplashServing qualified investorsAccording to an announcement made by the company on Monday, Binance’s Dubai-based subsidiary, Binance FZE, has secured the operational Minimum Viable Product (MVP) license from VARA.Eligible investors in Dubai, deemed as “qualified retail clients,” will now have access to authorized services such as compliant crypto-to-fiat exchanges, adhering to the guidelines set by the Financial Action Task Force (FATF). To qualify, investors must meet specific criteria, including being at least 21 years old and possessing a minimum of 500,000 United Arab Emirates dirhams ($136,000) in net liquid assets, supported by relevant documentary proof like bank statements and proof of funds.Additionally, qualified investors are required to provide valid identification documents, including passports and visas, along with proof of a valid UAE address and contact details. This comprehensive verification process ensures compliance with regulatory requirements and enhances security measures for all parties involved.Expanded service offeringThe move is a significant development as it allows Binance to offer cryptocurrency exchange and virtual asset broker-dealer services to institutional and qualified retail investors in Dubai.With the new license, Binance’s Dubai entity can now offer crypto-to-fiat exchange, conversions, transfer and custody solutions, brokerage facilities, as well as virtual asset payments and remittance services. The development builds upon Binance’s previous progress, having received the provisional MVP license in March 2022, followed by the preparatory MVP license in September 2022.Licensing challengesIt’s worth noting that some crypto exchanges have faced challenges operating with preparatory MVP licenses due to limited capabilities, only serving a restricted set of accredited investors. Bybit CEO Ben Zhou had previously highlighted this concern. That said, Zhou still came to the conclusion recently that the regulatory approach in the UAE is superior by comparison with many other jurisdictions.The news of Binance’s successful licensing comes shortly after VARA suspended the operational license of another crypto exchange, BitOasis, for not meeting required conditions within the set timeframes. BitOasis assured its commitment to fulfilling the remaining conditions in collaboration with VARA.In April 2023, VARA sought additional information from Binance, aiming to tighten regulatory standards in the emirate. Binance promptly provided all requested information and looked forward to further collaboration with VARA as it prepared for the next phase of licensing.Compliance with VARA’s framework includes adherence to compulsory rulebooks related to general operations, compliance, and market conduct requirements. The regulator has published key highlights of the regulations in 2023, underscoring its efforts to create a robust and well-regulated crypto market in Dubai.Regulatory headwindsBinance’s latest regulatory achievement indicates the exchange’s dedication to expanding its services and offerings in the region. It could potentially lead to something even more significant for the company in the Middle East as Binance has suggested that it would be more likely to expand in places such as Dubai, given an adverse regulatory approach elsewhere.Over the course of the past three months, the company has been forced out of key markets such as Germany, Canada, Belgium, the Netherlands, and Cyprus, due to regulatory pushback.

CoinGecko expands data offering through Zash acquisitionCoinGecko, the Malaysian crypto data aggregator, has intensified its focus on the non-fungible token (NFT) market through the recent acquisition of London-headquartered Zash. The move forms part of CoinGecko’s initiative to enhance its API offering by providing comprehensive data on digital collectibles.Photo by Andrey Metelev on UnsplashSolving for crypto data fragmentationIn a statement published to its website on Wednesday, CoinGecko provided further details on its acquisition of the enterprise-grade NFT and blockchain analytics company. Separately CoinGecko Co-Founder Bobby Ong told Tech in Asia that the crypto data sector is fragmented. As a consequence, it leads to inefficiency as market participants are forced to navigate multiple crypto data APIs. It’s in an effort to solve that issue that Ong and CoinGecko have moved to acquire Zash.Zash Co-Founder and CEO Parit Patel expressed optimism about the evolving nature of NFTs and their potential to unlock new use cases globally, creating value for both companies and consumers. The company plans to introduce new services derived from the acquisition by the second quarter of 2024.Enriched data offeringIn its own statement, CoinGecko emphasized its commitment to offering more NFT-related metrics. The acquisition aims to enrich CoinGecko’s data offerings with information such as metadata, historical trades and lending data related to NFTs. The specific financial details of the deal were not disclosed.With the integration of Zash, users can expect access to a broader range of data across multiple blockchain networks, including Ethereum, Polygon, BNB Chain (formerly Binance Smart Chain), Bitcoin Ordinals and Solana. The extended services will cover NFT lending information indexing various marketplaces, such as Blend, X2Y2 and NFTfi.In reflecting on the acquisition, CoinGecko Co-Founder TM Lee considered the move in terms of the ongoing process of asset tokenization. Taking to the X platform, Lee wrote:“Any asset that can be tokenized, will be tokenized. Like tokens, NFT is a core primitive to the crypto economy stack. We’ve been building http://coingecko.com/nft earlier even in the bear market and I’m excited on possibilities within the NFT industry with @zash_api joining us!”Monitoring wash tradingOne notable feature introduced through Zash is the ability for users to monitor wash trading, an illegal form of market manipulation that gives the false impression of market activity. CoinGecko clarified that this feature would be available for “major collections” minted on Ethereum.Wash trading, involving the simultaneous buying and selling of assets, has been associated with the NFT bubble of 2022. Blockchain forensic firm Chainalysis reported that over 100 profitable wash traders collectively earned nearly $9 million from this activity. However, it noted that the majority of NFT wash traders have been unprofitable, resulting in losses exceeding $416,984 from more than 150 wash trades.While the NFT market has faced challenges, with total sales currently at $80.8 million, significantly lower than the peak in August 2021 when daily sales exceeded $2 billion, CoinGecko’s strategic move positions the company to provide users with enhanced tools for assessing and ranking their cryptocurrency holdings. Established in 2014, CoinGecko operates as a platform offering comprehensive data and information on digital currencies, contributing to the quantitative evaluation of cryptocurrency portfolios.