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Vietnam moved ahead with its digital asset strategy on Jan. 20, as the Ministry of Finance opened applications for crypto exchange operators. The step puts the government’s broader regulatory framework into effect, allowing qualified firms to apply for approval to operate trading platforms.Photo by Jakub Żerdzicki on UnsplashDecision No. 96/QD-BTC of the Finance Ministry establishes three administrative procedures governing the sector, The Investor reported. The rules set out processes for issuing operating licenses, handling changes to existing permits, and revoking authorization from firms that fail to comply. 10 banks and brokerages signal interestAbout 10 securities firms and banks have already indicated plans to take part. The institutions are preparing to file applications in a bid to become the country’s first licensed crypto operators under the new rules. The groundwork for this week’s licensing phase was laid last June, when the government moved to legalize digital assets, paving the way for their formal recognition as an asset class on New Year’s Day. The shift was put into practice in September with the launch of a strict five-year pilot program aimed at keeping the emerging market under close monetary oversight. Under the pilot, all crypto transactions must be carried out exclusively in Vietnamese dong. Companies seeking to be licensed as crypto exchange operators must show two years of profits and at least 10 trillion dong ($380 million) in capital. The rules favor domestic players, allowing only Vietnam-registered firms to issue cryptocurrencies and requiring foreign investors to enter the market through ministry-licensed intermediaries. G-Group teams up with TetherThe regulatory push comes as private sector deal-making accelerates. Earlier this month, Hanoi-based tech firm G-Group signed a memorandum of understanding (MOU) with stablecoin issuer Tether to share technical expertise and international best practices, according to another report by The Investor. The agreement followed an October meeting between Deputy Prime Minister Ho Duc Phoc and Tether executive Marco Dal Lago. Dal Lago said the company was eager to work with Vietnamese partners to help develop the country’s crypto market. G-Group has also moved to build out its domestic infrastructure, collaborating with blockchain ecosystem Ninety Eight to form a joint venture. The new company, G98 Digital Asset JSC, will develop compliant crypto products, offer end-to-end blockchain services such as custody, and integrate those solutions into corporate systems. At the institutional level, Vietnam has also partnered with South Korea. In August, Military Bank, one of the nation’s five largest lenders and a subsidiary of the Ministry of National Defence, signed an agreement with Dunamu, the operator of South Korea’s largest crypto exchange, Upbit. The partnership is designed to support upgrades to Vietnam’s financial system, with Dunamu providing expertise on exchange operations, regulation, and investor protection. 

Crypto-Friendly Xapo Bank Enters Indian MarketXapo Bank, a cryptocurrency bank based in Gibraltar, has set its sights on India and plans to offer banking and cryptocurrency services in the country.Xapo, which claims to be the first bank in the world to integrate traditional private banking with crypto, issued a press release which was published via Bloomberg on Thursday to announce the development.Photo by Julian Yu on UnsplashMassive market opportunityWith a population of over 1.3 billion, India presents a massive opportunity for Xapo Bank, which is backed by prominent investors like SoftBank, DST Global, and Ribbit Capital. This move comes at a time when India has seen impressive foreign inflows of $15.5 billion in the first quarter of 2023.The CEO of Xapo Bank, Seamus Rocca, suggested that the absence of conventional banking services in certain parts of South Asia has created a void that Xapo Bank aims to fill. By providing innovative financial products and services, the bank hopes to empower individuals and businesses with access to reliable and inclusive banking solutions.Rocca stated that the move “represents an opportunity to provide our hybrid banking and investment solutions to its large underserved populations, bridging an important gap in the region’s financial systems and allowing its savvy savers, investors, and professionals the freedom to explore their financial potential with a single mobile application.”Competitive interest rate offeringOne of the attractive features of Xapo Bank for customers in India is its competitive interest rates on deposits. The bank offers attractive returns, with a yearly interest rate of 4.10% on US dollar deposits and 1.00% on Bitcoin deposits. Notably, the daily interest payments on Bitcoin deposits are distributed in the smallest denomination of the cryptocurrency, a satoshi.Xapo Bank’s expansion into India aligns with the country’s projected economic growth of 6.3%, according to Fitch Ratings. Despite the worldwide economic downturn, India’s GDP demonstrated robust growth of 6.1% in the first quarter, showcasing the country’s resilience.Government policy challengesHowever, Xapo Bank will face challenges as it enters the Indian market. The world’s most populous country has implemented strict measures regarding cryptocurrencies, including a 30% tax on all cryptocurrency income and the elimination of deductibility for losses. Such regulations could potentially impact Xapo Bank’s operations and profitability in India.Authorities like the country’s central bank, the Reserve Bank of India (RBI), have been more inclined to encourage the financial services sector to adopt blockchain technology rather than offer cryptocurrencies directly. Earlier this month, American multinational financial services company JPMorgan Chase partnered with six major Indian banks in a blockchain offering that aims to improve the interbank settlement process.Nevertheless, Xapo Bank remains undeterred, recognizing the immense potential of India’s growing economy and the urgent need for accessible financial services. The bank’s expansion promises to create opportunities for individuals and businesses across the nation, contributing to India’s economic development and financial inclusion.Moreover, Xapo Bank’s entry into India reflects a broader trend of fintech innovation and the convergence of traditional banking and digital currencies. As the world becomes increasingly interconnected, financial institutions like Xapo Bank are reshaping the financial services landscape by offering forward-thinking solutions that bridge gaps, ultimately empowering individuals and fostering economic growth.

Phemex, a Singapore-headquartered crypto derivatives trading platform, has halted withdrawals following a multi-million dollar hack.Photo by GuerrillaBuzz on UnsplashHot wallet compromisedIn a message to platform users published to social media, the project stated: “To ensure security, withdrawals have been temporarily suspended while we conduct an emergency inspection and strengthen wallet services. We sincerely apologize for the inconvenience. Withdrawals will be restored soon.” In further commentary, the project apologized for the disruption, assuring service users that its mission remains to provide a trusted trading environment, while outlining that it is working on putting together a compensation plan. It added that “Our ongoing business operations are fine,” and that “trading services continue as usual.” The digital assets were removed from the platform over multiple blockchains including Polygon, Arbitrum, the Base network and BNB. Blockchain analytics firm Lookonchain itemized some of the assets that are believed to have been stolen. They include 3.48 million USDC stablecoin, 3.42 million USDT stablecoin, 841 ETH valued at $2.7 million, 110,701 LINK valued at $2.69 million, 142 billion PEPE tokens valued at $2.12 million, 1.19 million FET tokens valued at $1.45 million and 29,509 AVAX tokens valued at $1.04 million. Initial reports put the loss at $31 million. However, Web3 security firm Cyvers later claimed that $37  million covers the full extent of the loss. Following deeper analysis, it found that both Bitcoin and TRON blockchains had also been impacted, resulting in the overall loss being increased by a further $6 million. Cold wallet assets are safeThe company’s CEO Federico Variola, published a post on X advising service users that all of the assets held within the company’s cold wallets remain safe. He included a link to the Phemex proof of reserves, encouraging customers to check it. In a follow-up post, he wrote: “We are currently carefully testing our system to reprise withdrawals as soon as possible. Due to the sophistication of the threat actor we cannot rush this stage. The estimated timeline to reprise full operations is within 24h, thank you for your support.” The XNET Foundation, a non-profit entity that develops decentralized wireless networks, said that it is actively working with the Phemex team on the production of an exploit report following the incident. It added that “It has been confirmed that tokens sent to the exchange for a launchpad pool were compromised as part of this exploit.” Ongoing problemCrypto hacking remains a major concern within the digital assets sector. Blockchain security firm PackShield reported recently that $1.3 billion had been laundered from crypto hacks in 2024. That statistic demonstrates that the problem is worsening as it accounts for a $342 million or 280% increase when compared with 2023. In December a Chainalysis report found that 61% of the hacking losses suffered in 2024 implicated the involvement of North Korean hackers. It estimated crypto hacking losses of $2.2 billion for 2024, based on losses associated with 303 hacking incidents.