Hong Kong’s HKVAC drops XRP from top 5 crypto index

28 crypto service providers register with India’s FIUIn India, 28 entities providing services related to virtual digital assets (VDAs) have successfully registered with the Financial Intelligence Unit (FIU), the body responsible for combating money laundering in the world’s most populous country.Notable names in this list include Neblio Technologies, more commonly known as CoinDCX, Zanmai Labs, the company responsible for the WazirX crypto platform, Bitcipher Labs’ CoinSwitch, Nextgendev Solutions and Awlencan Innovations India’s Zebpay.Photo by Big G Media on UnsplashA need to register as ‘reporting entities’This information comes in response to a question posed in the Lok Sabha (India’s lower house of Parliament), where the government emphasized the significance of these entities complying with the Prevention of Money Laundering Act (PMLA). In March, the government had formally designated companies dealing in VDAs, crypto exchanges and related intermediaries as “reporting entities” under the PMLA.According to the notification, crypto exchanges and their intermediaries are obligated to conduct Know Your Customer (KYC) procedures for their clients and platform users. This includes maintaining KYC details, identity documents, account files and business correspondence records with clients.Offshore exchanges required to registerMinister of State for Finance Pankaj Chaudhary mentioned that the registration process for VDA service providers catering to the Indian market is underway. Non-compliance with these regulations may result in appropriate action under the PMLA. It has been clarified that offshore crypto exchanges operating in India are required to adhere to these guidelines. Despite that, none of the 28 entities who have registered so far appear to be offshore companies.Commenting on the development via the X social media platform, Sumit Gupta, Co-Founder of CoinDCX, wrote:”Emphasizing compliance to PMLA is vital for the safety and financial integrity of Indians, as dealing with non-registered platforms exposes citizens to nefarious actors, putting their finances at risk.” . . . “It’s encouraging to witness the Government initiating actions against non-compliant offshore entities.”While steps to provide guidelines for the industry are largely positive, the Reserve Bank of India (RBI) has been vocal in its criticism of cryptocurrencies and calls for potential bans have cast a shadow over the industry in India. The recent collapse of prominent platforms like FTX have not been helpful, only serving to exacerbate concerns relative to India’s crypto ecosystem.The negative sentiment, coupled with an ongoing funding winter, has resulted in the closure of operations for some crypto platforms, including Pillow and WeTrade, this year. Firms like CoinSwitch and Gupta’s CoinDCX have had to reduce headcount in 2023 amid challenging market conditions.Despite these challenges, there are also positive signs. A recent report by blockchain analytics firm Chainalysis found that India has been the frontrunner more recently in terms of crypto adoption in Asia.This latest development provides guidelines where anti-money laundering processes are concerned for crypto firms in India. However, the government needs to follow through with a complete regulatory framework for the industry. The Indian courts recently declined to act on such a petition on the basis that it falls within the remit of the country’s legislature and is outside the purview of the courts.

A Chinese creditor of failed crypto exchange FTX has filed an objection on his own behalf and that of 300 others, with a U.S. bankruptcy court against a motion lodged with a view towards excluding payouts to creditors resident in China, Russia and 47 other foreign jurisdictions.Photo by Mariia Shalabaieva on UnsplashPotential distribution forfeitureThe FTX Recovery Trust, an entity formed in January to oversee the FTX bankruptcy estate following the adoption of a plan of reorganization, filed a motion last week seeking the approval of the Delaware Bankruptcy Court in the United States to adhere to new parameters related to the claims of creditors residing in restricted overseas jurisdictions. Besides China and Russia, the list of restricted jurisdictions also includes many within the Asian region, including  Afghanistan, Iran, Iraq, Macau, Myanmar (Burma), Nepal, North Korea, Pakistan, Qatar, Bangladesh and Cambodia. The FTX estate claims that these jurisdictions have regulations and laws restricting cryptocurrency transactions. In such cases, the FTX Recovery Trust claims that it cannot break local laws.  The difficulty for creditors resident in these countries is that if it's deemed illegal to reimburse them, they won’t qualify for the next scheduled distribution from the estate. In that instance, distribution forfeiture will be triggered. Taking to X on July 7, FTXcreditor.com, an entity that has been buying up bankruptcy claims from FTX creditors over the course of the FTX bankruptcy process, highlighted the peril that creditors residing in these restricted countries may face. It stated: “Distribution forfeiture is triggered at every distribution record date. The first record date already passed, if your claim is still tied to a local KYC when the stamp drops, that tranche is potentially gone.” Short timeframe for objectionsMr. Purple, a pseudonymous distressed assets bankruptcy professional who has been advocating for FTX creditors since the collapse of the business in November 2022, concurred with this view in a subsequent post on X. He pointed out that an extremely short timeframe has been given to affected creditors to respond. The motion was filed on July 2 and objections are due by July 15. $500 million in claims are at stake which accounts for 5% of all creditor claims. Of this, 82% of these claims belong to Chinese creditors. In a series of follow-up posts, the bankruptcy professional describes several procedural issues that he believes will result in it being incredibly difficult for affected creditors to have their funds reimbursed.Mr. Purple concludes:”The incentives are designed to be extremely risk averse in finding [a legal opinion] that paying creditors is legal! [The estate’s lawyers will] take the fees and say its not legal.” In his court filing, the Chinese creditor, who is resident in Singapore, stated: “My family holds four KYC-verified accounts with aggregate claims exceeding $15 million USD.” . . . “We have fully complied with every procedural requirement under the Plan. The proposed motion now jeopardizes our right to distribution in an arbitrary and inequitable manner.” On X, he asserted that the FTX Recovery Trust’s motion “constitutes an impermissible and material modification of the Plan.” Aside from legal action, the only other potential solution for creditors residing in restricted countries is to sell their claims. However, claims buyers are pricing in greater risk with lower rates and less favorable terms.

Xxsoft, an information technology firm based in South Korea, announced today that it entered a partnership with a blockchain firm Infinite Block, local media outlet Kyunghyang Games reported. Xxsoft is the operator of CryptoTax, a tax and accounting service specializing in crypto assets. The two companies aim to provide crypto custodial and accounting services for companies and enterprises.Photo by Sarah Elizabeth on UnsplashCryptoTax specializes in handling crypto investors’ taxation using algorithms designed to process crypto tax and accounting. These algorithms were developed with participation from tax accountants and accountants with expertise in crypto assets. CryptoTax also offers a solution as a service (SaaS) called Cryptotax Enterprise, which offers corporate clients the advantage of automated tax processing with direct access to accounting documents.  Meanwhile, Infinite Block is a key management service (KMS) provider based in Korea, serving clients ranging from startups to big firms. The company provides crypto wallets catering to individual clients’ needs, from internet-enabled hot wallets to cold wallets that keep private keys offline. Infinite Block employs multi-signature technology and multi-party computation to securely protect clients’ private keys. Rising demand for institutional crypto accountingYoon Dong-hwan, CEO of Xxsoft, said the shift in crypto regulations – as seen in events like the approval of spot Bitcoin ETFs by the U.S. Securities Exchange Commission – will result in higher demand for crypto custodial services compliant with financial authorities. He stated that the partnership with Infinite Block will allow the company to provide a convenient service tailored to the needs of corporate clients.  Jeong Gu-tae, CEO of Infinite Block, highlighted the importance of companies being equipped with a fully compliant internal control system when it comes to crypto taxation and accounting, because firms are subject to stricter regulations compared to individual investors. Jeong reaffirmed the company’s commitment to building a healthy local crypto market, saying that it will continue developing effective crypto asset management systems for corporations in close cooperation with CryptoTax.