IOTA accelerates Middle East expansion with $100M foundation launch

Non-Fiat Crypto Exchanges in Korea Urge Banks for Real-Name AccountsThe Virtual Asset Exchange Association (VXA) made an announcement today regarding its recent due diligence request sent to 12 South Korean banks, as reported by local news outlet Digital Today. These banks have not yet entered into contracts to provide real-name deposit and withdrawal accounts to cryptocurrency exchanges.VXA is a group comprised of representatives from ten non-fiat crypto trading platforms in the country. Among its members, eight exchanges–Aprobit, Probit, BTX, Foblgate, GDAC, Flata Exchange, Flybit, and High Block (previously known as Huobi Korea)–participated in the request.Photo by Eduardo Soares on UnsplashPartnerships with banksThe objective of the request is to urge the banks to consider establishing partnerships with competent non-fiat exchanges. The requesters argued that such collaborations would promote fair trading in the market and provide customers with more options. They highlighted the growing presence of the virtual asset trading sector in the capital market.Uneven crypto marketAn official from VXA emphasized the key role played by real-name bank account issuers in creating a healthy environment that addresses the existing monopoly in the Korean crypto market. According to a March report published by the Financial Services Commission, non-fiat crypto trading platforms accounted for only 3 percent of the total Korean crypto market capitalization during the second half of 2022. The remaining 97 percent was attributed to fiat-supporting crypto exchanges.The official further explained that allowing more exchanges to support the trading of the Korean won currency would contribute to shaping a free market while bolstering transparency and investor protection.Legal requirementsEarlier this month, VXA also sought fair due diligence from five Korean banks that have already formed partnerships with fiat-supporting crypto exchanges. In Korea, crypto trading platforms are required by law to obtain real-name accounts from banks in order to provide cash deposit and withdrawal services.

Korean crypto firms relocating for cheaper rent amid prolonged crypto winterAs the prolonged crypto winter continues to affect the industry, blockchain and cryptocurrency firms in South Korea are under pressure to economize. Faced with a deteriorating business and investment climate, numerous companies are reducing their office space and relocating to areas with cheaper rent, according to a Wednesday (local time) report by local media outlet Bizwatch.Photo by Nastuh Abootalebi on UnsplashReducing operating costsBizwatch reported, citing industry sources, that Parameta (previously Iconloop), a blockchain enterprise, has relocated its headquarters from Seoul’s upscale Signature Towers to a more economical shared office space this year. This strategic move is interpreted as an effort to slash operating costs by choosing a location with significantly lower rental expenses. A Parameta representative confirmed that the relocation was part of measures to reduce costs.Binance-backed Streami, which runs the Gopax cryptocurrency exchange, is also reportedly contemplating an office relocation after downsizing its staff. The company’s workforce has dwindled from over 100 employees earlier in the year to approximately 60 by September. A Streami spokesperson has indicated that they have yet to reach a decision regarding the relocation. Streami’s situation is particularly significant due to its ongoing challenges in securing approval from financial regulators for changes to its executive representatives since Binance acquired a majority stake. Recently, Streami appointed a new CEO from the domestic tech firm CityLabs, which has also purchased an 8.55% stake in Streami and intends to further increase its investment in the exchange operator.Similarly, Korea Digital Exchange, the operator of cryptocurrency-only exchange Flybit, has listed for sale one of its two floors of office space in Seoul’s Seocho district. This move comes nearly a year and eight months after the company expanded into the current premises.Changes in workforce sizesBefore the crypto winter, when the Korean crypto market witnessed unprecedented growth, numerous companies expanded their offices to make room for the growing workforce, bolstered by rising revenues. For instance, Dunamu, which runs Upbit — Korea’s largest crypto exchange — garnered attention for acquiring pricey real estate in Gangnam to construct a new office.However, the boom was short-lived. With the onset of the crypto downturn, numerous companies found themselves having to shut down. Blockchain technology firms are facing similar challenges, with many developers steering away from the sector due to persisting market instability. For many of these firms, the workforce has diminished as they’ve either undergone restructuring or struggled to recruit replacements for departing employees.An industry insider remarked that reducing operating costs is a logical step for companies facing a lack of investment and revenue. They noted that this only applies to those resilient enough to weather the hardship, adding that many cryptocurrency-only exchanges are likely to shut down completely in these challenging conditions.In fact, Cashierest, a crypto-only exchange, recently announced the cease of operations. Concerns about the company had been growing after staff layoffs and the departure of its CEO in July. A thorough analysis by the Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC) found that, of the 21 Korean crypto-only exchanges, 18 are operating with negative shareholder equity as of the first half of this year. Moreover, 10 did not earn any revenue from transaction fees during the same period.Crypto-only exchanges typically see lower trading volumes as they cannot facilitate trades in Korean won. In South Korea, only five trading platforms — Upbit, Bithumb, Coinone, Korbit and Gopax — are officially registered with the financial regulator to conduct fiat-to-crypto transactions.

Nomura Holdings, Japan's largest brokerage and investment banking company, along with its digital asset arm, Laser Digital, has unveiled a survey indicating a significant shift towards cryptocurrency investment among Japanese investment managers.  54% of investment managers favor cryptoThe survey, conducted in April with over 500 respondents, reveals that 54% of investment managers plan to invest in crypto assets within the next three years, aiming to stabilize their portfolios and mitigate risks through diversification and hedging against inflation. According to the survey, approximately 25% of respondents hold a positive impression of cryptocurrencies, particularly Bitcoin and Ether. Meanwhile, 62% view crypto assets as a viable diversification opportunity. Around half of those that responded indicated an interest in crypto exchange-traded funds (ETFs) while 31% are considering direct investment. This trend follows the Japanese cabinet's February approval of a proposal to include crypto in the list of assets that local investment limited partnerships can acquire or hold. Nomura anticipates a revision to the Limited Partnerships Act later this year to accommodate this change.Photo by Jezael Melgoza on UnsplashNew product development to drive demandThe survey also highlights the primary drivers for future investments in crypto assets. These include the development of a variety of financial products such as exchange-traded funds, investment trusts, staking, lending and other innovative offerings. These developments align with Japanese Prime Minister Fumio Kishida's "new capitalism" economic policy. Within that policy, Kishida outlined that fostering Web3 innovation is a key priority in a keynote address at the WebX conference in Tokyo in 2023. Metaplanet bond issuanceIn a related move, Tokyo-based investment and consulting firm Metaplanet plans to issue 1 billion yen ($6.26 million) worth of bonds to finance its Bitcoin acquisitions. The firm announced on June 24 that its board had approved the bond issuance, with the Bitcoin intended for long-term holding. A separate notice detailed that the bonds would offer an annual rate of 0.5%. Metaplanet appears to be following a business strategy first pioneered by MicroStrategy in the United States. The American business intelligence firm, now focused on Bitcoin development, holds the record for a public company with the most Bitcoin, possessing 226,331 BTC worth $15 billion. It provides an alternative means through which corporations can gain exposure to Bitcoin investment. Metaplanet is likely to fulfill a similar role within the Japanese market, meeting that developing investment need identified among Japanese investment managers in Nomura’s survey. While the Nomura survey findings are largely positive, there were a number of concerns expressed by investment managers also in relation to crypto. Among them were concerns about counterparty risk, regulatory requirements and high asset volatility. However, the report suggests that there is a path through which these concerns can be minimized. The report states: “These hurdles could soon be lowered, as Japan’s digital asset laws and regulations are rapidly being developed, enabling increased engagement from institutional investors in the future.” In December, the Japanese government approved a tax regime revision to exempt corporations from paying tax on unrealized crypto gains if they hold the assets long-term.