Hong Kong securities group proposes ICOs as growth opportunity

Galaxia Moneytree Forms Aviation Asset Tokenization ConsortiumKorean financial platform services provider Galaxia Moneytree announced that it has signed a memorandum of understanding (MOU) to establish a consortium for the development of a security token offering (STO) platform that issues tokenized aviation assets — the first of its kind in the country. Shinhan Securities, Eugene Investment and Securities, VMIC Aviation, and Cirium have signed on as members.Photo by John McArthur on Unsplash“This consortium will be a significant step in our endeavors to become a leading entity for innovation in the field of the tokenization of aviation assets. Our agreement will promote the advancement of the Korean aviation industry and enhance global competitiveness, providing investors with new opportunities through alternative investments,” said Shin Dong-hoon, CEO of Galaxia Moneytree.Shaping the future of aviationThe consortium aims to issue security tokens for leasing core aviation equipment such as aircraft engines, which would secure private funding and ease the burden that is imparted by leasing fees. Also, given that the most important aspect of STOs is asset valuation, the consortium has committed to issuing reliable aviation token securities to investors based on the accurate valuation of aircraft engines as determined by Cirium. Cirium is a global aviation data analytics company with 114 years of experience that provides solutions such as the valuation of aircrafts and engines, risk analytics for carbon emission reduction, and flight schedule changes.Galaxia Moneytree said that the consortium recently applied for a financial regulatory sandbox — a program introduced by the Korean government that offers special and provisional regulatory exemptions for financial services that have been recognized for their innovativeness.Partners with varying attributesGalaxia Moneytree will be responsible for overseeing the consortium as well as developing and operating the STO platform, which Shinhan Securities and Eugene Investment and Securities have agreed to provide funding for. The two securities firms will also provide management services for related trusts and accounts.Meanwhile, VMIC will take over asset management for aircraft engines and contribute various insights based on its expertise in aviation finance. VMIC Aviation is a Korean startup that specializes in innovative aircraft engine technologies by leveraging its technical and financial expertise.Discussions are also underway for cooperation with relevant government agencies such as the Ministry of Land, Infrastructure and Transport and the Korea Civil Aviation Association.The company has been working with its partner companies and communicating with government entities to tokenize a wide range of assets, from certified emissions reductions to renewable energy and horse racing. It is also taking the initiative to position itself as an industry leader by investing in joint ventures.

Following December's release of proposed fiat-referenced stablecoin regulations, the Hong Kong Monetary Authority (HKMA) has progressed further with the introduction of a stablecoin sandbox.Photo by Nextvoyage on PexelsFormulating a regulatory regimeThe regulatory sandbox, announced through a press release published to the regulator’s website on March 12, encompasses stablecoin currencies beyond the Hong Kong dollar, although the HKMA refrained from specifying particular currencies. Eddie Yue, CEO of the HKMA, emphasized the sandbox's role as a platform for constructive dialogue between the regulatory authority and the industry. Yue stated:"The sandbox arrangement serves as an effective channel for the HKMA and the industry to exchange views on the proposed regulatory regime.”Yue further noted that such engagement is pivotal for formulating regulatory requirements conducive to the sustainable and responsible growth of the stablecoin issuance business. The stablecoin sandbox finds its digital footprint within the International Financial Centre on the HKMA's website. The documentation accompanying the sandbox outlines several key requirements for potential participants. These include demonstrating genuine interest and a feasible plan for issuing fiat-referenced stablecoins in Hong Kong, as well as a concrete strategy for engagement within the sandbox. Additionally, applicants must exhibit a reasonable prospect of compliance with the proposed regulatory framework. Minimum capital requirementsOne notable regulation proposed stipulates that issuers must be Hong Kong-based entities with a minimum capital requirement of HK$25 million ($3.2 million) or 2% of the stablecoin issuance, whichever is higher. The HKMA remains vigilant regarding public announcements by sandbox participants, ensuring that such declarations do not misconstrue endorsement or accreditation from the regulatory authority. In late January, reports suggested discussions between Harvest Global Investment, RD Technologies, Venture Smart Financial Holdings and the HKMA regarding their potential entry into the sandbox. Harvest Global Investment, boasting over $200 billion in assets under management, signifies a significant player in this evolving digital assets space.RD Technologies took to the X social media platform to publicize its approval of the HKMA’s stablecoin sandbox. It also availed of the opportunity to outline that it’s in the process of launching a Hong Kong dollar (HKD)-based stablecoin, which will be known by the short-code HKDR.Hong Kong-based fintech firm AnchorX also chimed in, stating that the sandbox is “a pivotal step forward for the industry, enabling informed dialogue and collaboration between regulators and fintech innovators.” Like RD Technologies, AnchorX is also looking to get involved in the stablecoin business, having developed the AxHKD Hong Kong dollar-based stablecoin, which it is currently beta testing, in collaboration with Conflux Network. Juan Leon, crypto analyst with Bitwise Asset Management, suggested that the move is a great initiative, while calling on the U.S. Federal Reserve Chair Jerome Powell to follow Hong Kong’s example. On the tokenization front, Hong Kong made headlines in 2023 with the issuance of the world's largest native digital bond — a green bond exceeding $750 million. Late last year, it also proposed regulations relative to tokenization of real-world assets.Guidance provided to banks on tokenization, coupled with plans for forthcoming legislation, further solidifies Hong Kong's position as a trailblazer in the realm of digital finance.  

WOO X, a Taipei-based cryptocurrency exchange, has successfully raised $9 million in its latest funding round, with notable investors including crypto market maker Wintermute. Jack Tan, co-founder of WOO, emphasized the significance of this funding in aligning the interests of liquidity providers rather than as a capital-raising exercise. On social media the company wrote that it “welcomes an elite group of liquidity providers to our ecosystem - as our commitment to building the best environment for traders remains steadfast.”Photo by micheile henderson on UnsplashDesignated market makersThe funding comes from designated market makers (DMMs), featuring participants like Selini Capital, Time Research, Pulsar, Efficient Frontier, Singapore’s Amber Group, AlphaLab Capital, Presto Labs and Riverside Hedge. This infusion of capital is expected to enhance liquidity on WOO X, starting with the BTC and ETH perpetual futures markets and later expanding into altcoin perpetual futures and all spot markets. WOO X plans to roll out a designated market maker (DMM) program for its spot markets in the first quarter of the current year. These strategic moves are expected to contribute to achieving a 100% custody ratio by the second quarter of 2024. Business model pivotWOO X underwent a strategic shift in its business model during the third quarter of the previous year. It transitioned to partner with multiple liquidity providers for both spot and perpetual futures markets, moving away from reliance on a single provider, Kronos Research. The decision to diversify followed a security incident in November 2023, where Kronos suffered a hack leading to an estimated loss of $25 million. As a response, WOO X took proactive measures to restructure its operations. As part of that plan to address liquidity, last month WOO X established a significant partnership with Wintermute, the leading algorithmic trading company and liquidity provider with a trading volume of approximately $3.6 trillion. This partnership positions Wintermute as the primary liquidity provider for WOO X, further strengthening the exchange's market presence. News of this development in December led to a marked increase in the unit price of the platform’s WOO token. Over the course of the last two weeks of December, the WOO token price increased from $0.2385 to $0.4718, representing a 98% increase. Contributing to its recent surge is the partnership announcement with Arbitrum by WooFi exchange, a development that attracted attention from potential investors. The exchange implemented various initiatives to fortify its position, including updates to its fee structure, technology infrastructure enhancements to accommodate multiple designated market makers simultaneously, the introduction of a maker rebate in USDT and the launch of the DMM rewards pool to further incentivize liquidity provision on WOO X. Global expansionThe newly secured funds are earmarked for global market expansion and obtaining regulatory licenses, aligning with WOO's vision for sustainable growth. In 2021, Woo Network successfully closed a $30 million Series A funding round. Subsequently, in October of the previous year, the company repurchased its shares and tokens from the bankruptcy estate of Three Arrows Capital, a participant in the Series A round.