Cryptotax secures pre-series A funding from Hashed

Singapore Exchange Limited (SGX), the city-state’s primary asset exchange, is in the process of establishing Bitcoin perpetual futures trading on the platform.Photo by Kanchanara on UnsplashInstitutional product offeringAccording to a report published by Bloomberg earlier this week, the exchange platform intends to launch Bitcoin futures sometime during H2 2025. The product launch will be subject to regulatory approval from the Monetary Authority of Singapore (MAS). A spokesperson for the company told Bloomberg that the product offering will be geared exclusively towards institutional investors and traders in an effort to “significantly expand institutional market access.” Retail access to the product will be prohibited. Once launched, these Bitcoin perpetual futures contracts, being offered through a traditional finance (TradFi) outfit like SGX, will help to blur the lines between TradFi and the emerging crypto sector. Perpetual futures have no expiry date. They offer a means for traders to bet on price changes in an underlying asset while doing away with the need to take ownership of the asset itself. Cautious approachSGX has been cautious in listing crypto assets and derivative products. Last year the firm’s CEO, Loh Boon Chye, said that the time was not yet right for such listings.  His concern back then was that any such product launches would need “sustainable ecosystem support,” adding that “that means demand, that means governance, that means structure.” While spot Bitcoin exchange-traded funds (ETFs) had been approved in the United States at that point, there has been much further development in the crypto-sphere since then, following the election of a pro-crypto administration in the U.S. That event has had knock-on effects globally. Singapore’s SGX isn’t the only traditional exchange platform to respond. Japanese futures exchange, the Osaka Dojima Exchange (ODEX), is gearing up to file an application with the Financial Services Agency (FSA) to list a Bitcoin futures product later this month. Closer to home, an American digital asset marketplace that focuses on institutional trading, EDX Markets, has plans to introduce Bitcoin perpetual futures products to the Singaporean market, according to a report which emerged in January. In May 2024, EDX launched EDXM Global, a settlement platform, in Singapore. This product launch by SGX serves the purposes of decision-makers in Singapore, who have been trying to position the city-state as a digital asset industry hub. Additionally, the move will bring greater acceptance of the digital assets sector from traditional market participants. Crypto perpetual futures contracts were first pioneered by crypto derivatives exchanges like BitMEX back in 2016. Since then, other crypto-native platforms like Binance and OKX have offered these products. In the case of unregulated offshore exchanges, the products have proven to be controversial, as at times, they have been used in a manner that has exposed market participants to counterparty risk. Failed crypto exchange FTX, together with its sister company Alameda Research, relied on the products in their trading activities. SGX, as a seasoned, regulated TradFi operator, which holds an Aa2 rating from Moody’s, is likely to prove to be a more palatable option for institutional players.

OSL Group, a Hong Kong-based publicly listed digital asset exchange platform, has raised $300 million to finance further expansion of the business.Photo by Towfiqu barbhuiya on UnsplashLargest publicly disclosed crypto equity raise in AsiaIn a press release published on July 25, the company claimed that it has completed the largest publicly disclosed equity raise to date within Asia’s digital asset sector. It suggested the funding signaled market confidence in the digital asset business model that the firm is pursuing.  OSL intends to allocate the funding across three primary areas. Acquisition opportunities are one core area the company plans to home in on. It says that it will continue its “aggressive global expansion drive” through a combination of licensing, partnerships and acquisitions.  As part of its global expansion strategy, last month the company acquired a 90% stake in Evergreen Crest Holdings, an Indonesian crypto exchange operator. In February, it rebranded CoinBest, a Japanese crypto exchange, as OSL Japan after acquiring it late last year. Stablecoin initiativesOSL plans to pursue new global business initiatives, including initiatives related to stablecoins and payments. It stated that it will accelerate its “build-out of global business and payment networks, integrating fiat currencies, stablecoins, and major digital assets.” The company feels that investment in infrastructure of this nature will facilitate its institutional and enterprise clients, giving them access to “secure, efficient, and seamless cross-border payment solutions.” The third core area it will allocate funding to is working capital. OSL believes that enhancing the strength and depth of its working capital will give the firm a competitive advantage over its rivals in terms of reach, coverage, scale and volume. The company’s Chief Financial Officer (CFO), Ian Wong, commented on this latest development, stating: "This US$300 million equity raise marks a major milestone in our journey and reflects strong conviction in OSL's digital asset strategy and execution.” OSL is already well established as a key player in the digital assets space in Hong Kong. Founded in 2003 as BC Technology Group, it later rebranded and in 2018 the company expanded its services to cater to the digital assets sector. In 2023, OSL, alongside rival HashKey, became the first digital assets companies in the Chinese autonomous territory to be licensed by the Securities and Futures Commission (SFC). Supporting spot crypto ETF issuersOSL supports asset management firms that have listed Bitcoin and Ether exchange-traded funds (ETFs) on the Hong Kong Stock Exchange (HKEX), through its staking and digital asset custody infrastructure. In April, the company was approved by the SFC to offer Ethereum staking services. In July 2024, the company claimed that 88% of spot digital asset ETF trading in Hong Kong had been carried out by firms that it has partnerships with. The timing of the announcement of this latest development is interesting, given that one of the focuses for the funds raised is to develop stablecoin-related business, against a backdrop of Hong Kong’s new Stablecoins Ordinance coming into effect in less than a week from now.Bloomberg reported last week that around fifty companies have expressed interest in obtaining stablecoin licensing in the city, with the local regulator and central banking institution, the Hong Kong Monetary Authority (HKMA), likely to issue ten licenses. 

Hong Kong Authorities Unite to Form Crypto-Centric TaskforceAuthorities in Hong Kong are taking action to address recent mounting concerns surrounding illicit cryptocurrency activities, particularly in light of the recent JPEX scandal. The Hong Kong Police Force and the Securities and Futures Commission (SFC) have come together to establish a specialized working group dedicated to closely monitoring and countering suspicious activities connected to virtual asset trading platforms (VATPs).In a statement published by Hong Kong’s Securities and Futures Commission (SFC) on Wednesday (local time), the agency set out details of a collaborative task force which has been formed in the wake of a high-level meeting held on September 28.The collaboration draws on input from the SFC as well as a number of law enforcement divisions within the Chinese autonomous territory, including the Commercial Crime Bureau, Cyber Security and Technology Crime Bureau, and Financial Intelligence and Investigations Bureau.Photo by Cheung Yin on UnsplashGreater coordination and information sharingThe primary objectives of this alliance are to enhance coordination, foster information sharing, assess risks tied to VATPs, and, above all, safeguard the interests of the Hong Kong public.Christopher Wilson, Director of Enforcement at the SFC, underscored the regulator’s commitment to allocating resources to combat problematic VATPs and safeguard investor interests. Eve Chung, Assistant Commissioner of Police (Crime) at the Hong Kong Police Force, emphasized the significance of intelligence exchange and collaborative efforts in responding to the challenges posed by VATPs to protect the Hong Kong public.Knee jerk response to JPEX scandalIt would appear that the necessity for such a concerted effort became patently clear as a direct response to the errant activities of Dubai-based crypto platform JPEX within Hong Kong.Issues with the exchange first emerged in September when the platform outlined that it was having liquidity issues as a consequence of some third party market makers having withdrawn their services. JPEX subsequently raised withdrawal fees to an unreasonable level to deter customers from withdrawing funds from the platform.The saga has affected over 1,600 investors with more than $150 million in assets becoming unavailable to them. The case resulted in the arrest of at least 20 individuals, with local telecom providers blocking online access to the platform as requested by law enforcement.Earlier, on September 13, the SFC had issued a warning accusing JPEX and crypto influencers of disseminating false or misleading information on social media about their application for a virtual asset trading license in Hong Kong.The ongoing JPEX controversy has prompted regulators in Hong Kong to explore measures to strengthen regulations governing the cryptocurrency market. The establishment of the task force signifies a proactive stance to address these concerns and ensure swift, effective action against illicit activities in the crypto sector.In addition to the joint task force, the SFC has taken steps to enhance transparency by publishing a comprehensive list that includes licensed, deemed licensed, closing down, and application-pending crypto exchanges, along with a list of “suspicious VATPs.” This transparency initiative aims to provide clarity and protect investors by offering insights into legitimate and questionable cryptocurrency trading platforms operating in Hong Kong.