Foblgate adds Ripple market for increased investor opportunities

Dunamu & Partners Invests $109M in 60 Promising StartupsInvestment firm Dunamu & Partners (D&P), a subsidiary of South Korean cryptocurrency exchange Upbit’s operator Dunamu, announced that it has made 144.4 billion KRW ($109 million) investments in 60 promising startups, as per economic news media Moneytoday.Photo by Precondo CA on UnsplashDiversified portfolioHaving commenced its operations five years ago, the investment company started investing in fintech and blockchain domains and later diversified its investments into other cutting-edge fields such as artificial intelligence (AI) and data management.AI and data managementA D&P official said that more than half of the investment (52%) has been allocated towards AI and data management. The company made initial investments in nascent startups and continued to provide additional funds to support their noticeable growth.One of the best cases is Korea Credit Data (KCD), the company behind retail revenue management solution Cashnote. After receiving strategic investment from D&P in 2018, KCD secured another 35 billion KRW ($26.4 million) last October to turn into a unicorn company, elevating its status to a unicorn company — a privately-owned startup valued at over $1 billion.Other notable companies in D&P’s portfolio include cloud-based foreign exchange payment solution Travel Wallet, AI-driven investment tech provider Qraft Technologies, and AI chip design firm Rebellions.Positive social impactD&P has also made investments in areas that generate positive social impact. D&P has committed 10 billion KRW ($7.6 million) each to whole-genome sequencing analysis company Genome Insight and knowledge-sharing platform Classum.Investments with capitalD&P invests entirely with capital and does not rely on funds for financing its investments. D&P CEO Lee Kang-joon emphasized the firm’s preemptive monitoring of market trends and its persistent investment strategy in the quest to identify the next industry trailblazer.

The Japanese government is moving to modernize municipal finance through blockchain technology, though the timeline for much-anticipated cryptocurrency tax reforms appears to be drifting further into the future. Municipal bonds as security tokensAccording to a Dec. 23 Nikkei report cited by CoinDesk Japan, policymakers decided to begin preparing to issue local government bonds as security tokens. The government aims to submit the necessary legislation during the ordinary Diet session in 2026. Concrete measures, shaped by requests from local municipalities, are expected to be finalized ahead of next year. Advocates say that issuing bonds as blockchain-based security tokens would modernize local government finance by reducing friction in issuance and settlement and enabling real-time tracking of investor data.Photo by Luke Stackpoole on UnsplashCrypto tax reform seen as taking timeWhile the digitization of bonds progresses, the schedule for easing the tax burden on crypto investors is reportedly facing setbacks. CoinPost reported that, according to sources, the transition to a separate tax on crypto gains is now expected to take place in January 2028, a delay from the initially envisioned target of January 2027. The legislative groundwork is still slated for the 2026 Diet session, where amendments bringing crypto assets under the Financial Instruments and Exchange Act (FIEA) will be deliberated. However, the current cautious policy approach prioritizes investor protection and adjustments to the tax reporting framework, making a delay in implementation more likely. The proposed amendments address the steep tax liabilities currently faced by domestic investors. Under Japan’s current system, crypto gains are treated as miscellaneous income, taxed comprehensively with salary and other earnings at rates that can reach roughly 55% when including local taxes. The plan, which the ruling coalition has been coordinating, aims to align crypto taxation with that of stocks and forex trading. It would introduce a flat 20% separate tax rate and allow loss offsets and carryforwards of up to three years, bringing crypto closer to other financial assets. It would also ease tax filing by potentially adopting a framework similar to the designated accounts used in Japan’s securities market, reducing the reporting burden on digital asset investors. The slow pace of these regulatory changes has drawn criticism from the private sector. Tomoya Asakura, CEO of SBI Global Asset Management, a subsidiary of SBI Holdings, took to the social media platform X to voice concerns about the pace of reform. Asakura characterized the process as "extremely slow," warning that the lag places Japan behind jurisdictions such as the U.S., Asia, and the Middle East. He argued that continued delays would further impede domestic initiatives in Web3 and digital finance. Bybit to pull out next yearAmid this shifting regulatory landscape, foreign entities are adjusting their operations. Dubai-based crypto exchange Bybit, which is not registered with Japan’s Financial Services Agency, announced on Dec. 22 it will phase out services for Japanese users to remain compliant with local rules. The exchange has stopped onboarding Japanese residents or nationals since 12:00 p.m. UTC on Oct. 31, and accounts held by customers in Japan will be gradually restricted starting next year. 

HashKey Report Outlines Risks of Liquid StakingLiquid staking derivatives (LSD) are not without their potential pitfalls according to a report published by Hong Kong’s HashKey Capital.Photo by Shubham Dhage on UnsplashLiquid staking exceeds $22 billionThe report, which was published by the digital asset manager and finance house in July, emphasizes the pressing need for enhanced decentralization to counteract the risks associated with this growing trend of liquid staking.The figures themselves are impressive. This year, the total value locked in the liquid staking derivatives market has surged past the $22 billion mark. Correspondingly, the market capitalization of LSD projects has skyrocketed to $18 billion, indicating a substantial influx of interest and investment.However, the growth that these protocols are witnessing also presents a dual-edged conundrum for the Ethereum ecosystem. HashKey Capital’s report underscores that despite the advantages these protocols might offer their respective communities and token-holders, they could potentially destabilize the Ethereum ecosystem in multifaceted ways.Centralization riskAs evident in HashKey Capital’s overview, several LSD protocols heavily rely on a limited number of node operators, effectively centralizing a significant portion of validator nodes. This centralization trend, as highlighted by the report, is a cause for concern. The concentration of node operators raises red flags, as it contradicts the fundamental tenets of decentralization that underpin blockchain technology.The report articulates the adverse effects of centralization in the realm of liquid staking. It points to the dangers of reduced competition and a heightened risk of censorship.The report raises an important caution: “There is a heightened possibility of censorship with centralized staking players, as they may be subject to incentives or regulatory pressure to censor transactions. This can potentially result in a disruption of the trust within the network.”Security threatsCentralization also ushers in security threats. The dominance of major staking players makes the Ethereum ecosystem more susceptible to 51% attacks. Furthermore, the potential for collusion among centralized stakers looms large, leading to actions that counteract the very essence of decentralization, such as front running and malicious maximal extractable value (MEV) susceptibility.However, amidst these centralization risks, HashKey Capital acknowledges that most protocols are in their nascent stages. Many of them have devised strategies to incorporate distributed validator technology into their protocols, a proactive step towards fostering greater decentralization and resilience.HashKey Exchange awarded retail services licenseIn an unrelated development, HashKey Exchange received approval on Wednesday to upgrade type 1 and type 7 licenses, allowing it to cater to retail investors in Hong Kong. This accomplishment comes a mere two months after the city introduced its Virtual Asset Service Provider (VASP) licensing framework on June 1.In this evolving landscape, HashKey Capital and OSL were among the pioneer licensed exchanges under the city’s earlier voluntary program. Now, the new regulations stipulate that crypto trading platforms must obtain a license to serve retail investors, further solidifying Hong Kong’s commitment to cultivating a thriving crypto ecosystem.As the HashKey Capital report and recent developments in Hong Kong demonstrate, there’s a lot in play relative to both crypto regulation, protocol design and new product innovation. The challenges posed by centralization in liquid staking underscore the importance of vigilance and corrective action. Meanwhile, Hong Kong’s aspirations to become a crypto stronghold offer a beacon of hope in an ever-evolving regulatory landscape.