Banxa's UK arm makes regulatory strides with FCA approval

CityLabs Secures 8.55% Stake in GopaxCityLabs, a company listed on the KOSDAQ stock exchange, has stepped in as a rescue investor for the South Korean cryptocurrency exchange Gopax.The company announced last Friday that it has acquired a total of 76,308 shares of Streami, the operator of Gopax, securing an 8.55% stake in the company. The investment amounts to a total value of KRW 5.4 billion (approximately $4 million).Photo by Precondo CA on UnsplashGopax’s turbulent historyGopax has recently been facing public and regulatory scrutiny due to its internal struggles, such as undergoing major changes in leadership earlier this year following its acquisition by Binance, with Lee Jun-haeng resigning and Binance’s Asia Pacific Head, Leon Sing Foong, taking over.After this event, Streami submitted reports to the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSS) in line with requirements to inform the regulatory body about such changes. However, due to delays in the FIU’s approval process likely influenced by Binance’s various legal and regulatory challenges, there was yet another leadership transition — Foong stepped down, and Lee Joong-hoon, Gopax’s former Vice President, took over. Notably, Foong recently left Binance altogether amid regulatory crackdowns.During this process, Gopax also struggled to make principal and interest payments on its own decentralized finance (DeFi) service, GOFi, in the wake of last year’s FTX collapse. The amount of customer funds locked in GOFi totals KRW 56.6 billion, according to an announcement made by Gopax in April. Binance acquired a stake in Gopax on the condition that it would inject enough capital into Gopax to repay this amount in full.CityLabs steps inAs a result, there have been speculations that a Korean company would invest in Gopax and deliver the exchange from its woes. Some even predicted that this company might become a major shareholder, although CityLabs has acquired only an 8.55% stake due to the fact that the funds required to do so far exceed CityLabs’ annual revenue.Last year, CityLabs reported a consolidated revenue of KRW 28.4 billion and an operating loss of KRW 6.1 billion. Although its revenue increased by 2% compared to the previous year, operating losses grew by 46.9%. While the company may not have sufficient funds at present to become a major shareholder, there lies the possibility that it may increase its stake in the future.The acquisition seems to be driven by CityLabs’ interest in blockchain businesses and the crypto market. While it currently specializes in intelligent transportation systems (ITS), it was formerly Dayli Blockchain, which was affiliated with the crypto exchange Coinone and Dayli Financial Group (now known as Gowid). In 2017, Yellow Mobile became the largest shareholder of Dayli Financial, and in February 2018, it became the largest shareholder of DailyBlockchain, making Dayli Blockchain its subsidiary. Coinone was also a subsidiary of Yellow Mobile at the time. All of these ownership relations have now been restructured.CityLabs has thus been involved in the blockchain industry for some time now with previous connections to cryptocurrency exchanges while also offering decentralized identity (DID) and blockchain as a service (BaaS) products. Observations point to the possibility that its history has influenced its decision to invest in Gopax.“We acquired shares to secure an entry point into the crypto market and position ourselves as a major player,” the company said in a statement.Meanwhile, financial authorities are considering plans to examine the eligibility of major shareholders when reviewing applications from crypto businesses.

Stella Chan, the chief operating officer of Phemex, a crypto derivatives exchange with a presence in Turkey and Singapore, recently provided details of the company’s unveiling of its Lending Protocol and SocialFi initiative Pulse Season 3. In an interview with Cointelegraph, Chan outlined that since the founding of the firm in 2019, the company has been evolving and working towards carving out a niche for itself in the industry. The executive confirmed that the exchange business has reached a point where daily trading volume now exceeds $2 billion across more than 300 trading pairs. Pulse Season 3Chan is also the co-founder of Phemex’s Pulse, a social trading platform that rewards users while attempting to foster a community spirit within the crypto sphere. As part of Phemex events held at Token 2024 in Dubai last week, the company announced Pulse Season 3, a SocialFi mechanism to incentivize community engagement. The initiative introduces casting and tipping features. Casting is a means through which community members can post up content. Meanwhile, tipping serves as a method through which other community members can acknowledge and reward high-quality community member contributions. Through this initiative Phemex is hoping to deliver an enhanced experience where trading seamlessly intersects with trending topics and insightful content.Photo by Shubham Dhage on UnsplashPhemex Lending ProtocolAlongside Pulse Season 3, the company has also launched the Phemex Lending Protocol, a feature allowing users to borrow crypto at competitive rates while earning interest. As part of that offering, all loans are safeguarded through the collateralization of the user’s digital assets. With an initial liquidity allocation of $22 million, this protocol has been established with an eye towards empowering traders to amplify their capital without selling their assets, while aligning in a more general sense with the user’s overall trading needs. Phemex is attempting to spearhead the transition towards greater user autonomy without compromising security. The Phemex Lending Protocol is central to that effort, offering users competitive borrowing rates and opportunities for passive income generation.  Standing testament to that, the platform offers interest rates on USDT starting at 3.57%. For those that hold vePT, the wrapped version of the platform's native Phemex token (PT), an additional 30% discount on borrowing rates is being offered. vePT is destined to act as a token which confers voting authority in the not too distant future, relative to Phemex’s governing decentralized autonomous organization (DAO). The platform is further enabling capital efficiency from the service user’s perspective by applying very little restriction so that funds can be withdrawn and redeployed at will, with minimum delay. Coming off the back of these announcements during Token 2024, the company appears to be following through on that momentum. Taking to the X social media platform on April 25, Chan outlined details of a plethora of user experience (UX) upgrades relative to its Pulse offering. Future plansLooking ahead, Phemex envisages the offering of a broader range of products tailored to user needs. Plans for an automated market maker (AMM) protocol aim to provide users with passive earning opportunities by contributing to liquidity. Additionally, Phemex is exploring the development of an on-chain credit scoring mechanism, leveraging its soulbound digital identity token to enhance access to decentralized finance (DeFi).

Experts Offer Insights into Bitcoin ETFs, Stablecoins, and On-Chain Data AnalysisDuring Korea Investment Week 2023, hosted by local newspaper Korea Economic Daily, experts in the field of virtual assets gathered at the Korea Exchange (KRX) PR Hall on Thursday. They came together to share their expertise on the cryptocurrency market and discuss various investment strategies.Key topics covered at the event ranged from the global outlook for virtual asset exchange-traded funds (ETFs) to the prospects of the US approving Bitcoin spot ETFs. Strategies based on on-chain data analysis were also on the agenda.Photo by Kanchanara on UnsplashThe potential of Bitcoin spot ETFsOne of the notable speakers, Lee Tae-yong, the Chief Global Strategy Officer at Wavebridge, a cryptocurrency market index provider, argued that the potential approval of Bitcoin spot ETFs could attract global investors to the market. He opined that this could subsequently improve market liquidity and contribute to stabilizing the Bitcoin market.Lee has made a prediction that Bitcoin spot ETFs will likely receive approval in the United States. He cited examples from Europe, Australia, and Brazil, where such financial products are already being managed effectively. He also suggested that the US Securities and Exchange Commission (SEC) would likely take note of this global trend and may find it challenging to go against it.Experts believe that among the various Bitcoin spot ETF applications submitted to the US SEC, Grayscale Investments’ proposal to convert the Grayscale Bitcoin Trust (GBTC) into an ETF stands the best chance of receiving approval first. Data from The Block indicates that the Grayscale Bitcoin Trust manages crypto assets totaling $16.13 billion as of September 7.Lee predicts that the approval of Bitcoin spot ETFs will serve as a pivotal milestone for the cryptocurrency market, potentially triggering a significant uptick in the price of Bitcoin. To support this assertion, Lee pointed to the historical precedent set by the introduction of a gold-backed ETF in 2004. Since its inception, the gold-backed ETF has swelled in value to exceed $45 billion. Importantly, gold does not have a fixed supply, yet the availability of an ETF mechanism boosted its value considerably. Lee argues that the impact on Bitcoin could be even more pronounced given its fixed supply cap.There was also a projection that virtual assets are set to play a crucial role in expanding the size of the ETF market, potentially more than doubling it. Lee pointed out that conventional ETFs typically charge fees of around 0.15%, whereas virtual asset ETFs tend to charge over 1%. This underscores that virtual assets are seen as a new revenue source among asset managers.Stablecoins and regulationsSome viewed that stablecoins would emerge as a focal point among the innovations taking place within the cryptocurrency industry. Kim Yong-beom, the CEO of Hashed Open Research and a former vice minister of the Ministry of Strategy and Finance, noted that Asia has been actively advancing regulations related to stablecoins. Stablecoins are a category of cryptocurrencies that are pegged to traditional fiat currencies like the US dollar.Highlighting the efforts of many countries to develop a comprehensive regulatory framework for cryptocurrencies, Kim noted the importance of establishing regulations that accommodate stablecoins. In his view, the introduction of such regulations will amplify the impact of stablecoins within the market.Kim mentioned that Asian countries are leading in blockchain research and digital competitiveness. He said that Asian universities, particularly those in China, are among the world’s best in producing blockchain research papers and offering related lectures. Kim also pointed out that while the leadership in the blockchain industry has shifted towards Asia, South Korea is now emerging as a prominent hub for virtual assets in the region. He emphasized the need for South Korea to position itself as a more influential nation in this context.On-chain data and investmentDuring the event, a cryptocurrency investment strategy based on on-chain data was also presented. On-chain data refers to publicly accessible information about transactions conducted on a blockchain network. This data can be utilized as an investment indicator that is not available within the traditional financial sector.Ju Ki-young, the CEO of on-chain analytics resource CryptoQuant, underlined that virtual asset investors are particularly interested in tracking who is selling which tokens at any given moment. He stressed that examining on-chain data, such as deposit and withdrawal information from major cryptocurrency exchanges, can be a valuable tool for risk mitigation.