Backpack forges partnership with Australian crypto on-ramp provider

Hong Kong’s insurance regulator is drafting rules that would bring insurers’ cryptocurrency exposure under a risk-based capital framework. According to Bloomberg, the Insurance Authority of Hong Kong is preparing a risk-based capital framework that would impose a 100% risk charge on insurers’ crypto holdings. The proposal distinguishes among crypto exposures, assigning stablecoin investments risk charges based on the fiat currency backing the Hong Kong-regulated token rather than applying a uniform treatment. The regulator is also considering capital incentives to channel insurers’ investment into infrastructure projects supporting Hong Kong or mainland China, including those listed or issued within the city. The Insurance Authority said the regime is designed to bolster the industry while promoting broader economic development. A public consultation on the rules is scheduled to run from February to April, ahead of any legislative submission.Photo by Vlad Deep on UnsplashStablecoin licensing focuses on robust reservesSeparately, the Financial Services and the Treasury Bureau is advancing other regulatory initiatives in the digital asset space. Secretary Christopher Hui indicated that the first batch of stablecoin licenses is expected to be issued early next year. According to the Hong Kong Economic Times, Hui noted that the government had received 36 stablecoin license applications by the end of September, following the implementation of the Stablecoins Ordinance in August. Regulators are prioritizing applicants that demonstrate strong reserve management, price stability, and robust anti–money laundering (AML) controls. Hui added that the government is currently collaborating with the Securities and Futures Commission (SFC) to finalize licensing rules for virtual asset trading platforms and custodial service providers, with proposals expected to reach the Legislative Council next year. StanChart and Ant’s tokenized depositsWhile regulators refine the rulebook, the traditional banking sector is moving forward with the technology underpinning the digital pivot. Standard Chartered has collaborated with Ant International to launch a tokenized deposit solution on Whale, Ant’s blockchain-powered treasury management platform. As reported by Tech in Asia, the solution enables real-time transfers in Hong Kong dollars, offshore yuan, and U.S. dollars. This initiative falls under the umbrella of Project Ensemble, a program launched by the Hong Kong Monetary Authority in March 2024 to shape the city’s tokenization ecosystem. Market headwindsThese developments follow the crypto sector’s entry into Hong Kong’s equity market. According to Bloomberg, HashKey Holdings, a licensed exchange operator, listed on the Hong Kong Stock Exchange on Dec. 17, raising HK$1.6 billion ($206 million). While shares initially debuted above the offer price, they had fallen approximately 15% to HK$5.69 by Dec. 22. The lackluster performance coincides with a broader pullback in the crypto market. Bitcoin is currently trading below $89,000, roughly 30% off its October peak. Institutional caution is also evident in global flows. According to CoinShares, crypto investment products recorded $952 million in net outflows for the week ending Dec. 20. Ethereum and Bitcoin products led the exit with outflows of $555 million and $460 million, respectively. Conversely, altcoins XRP and Solana bucked the trend, seeing inflows of $62.9 million and $48.5 million. James Butterfill, head of research at CoinShares, attributed the negative sentiment to delays regarding the CLARITY Act, a U.S. bill designed to clarify digital asset regulation, and continued selling by whale investors. 

CMCC Global Launches $100 Million Fund for Asian Blockchain StartupsCMCC Global, a crypto-focused venture capital firm based in Hong Kong, has successfully raised $100 million for its newly established Titan Fund.That’s according to a report on Wednesday (local time) published by the South China Morning Post (SCMP). The fund is dedicated to providing crucial support to startups operating in Asia’s developing blockchain sector.Photo by Shubham Dhage on UnsplashProminent backersOver 30 prominent investors, including Winklevoss Capital and Animoca Brands Founder Yat Siu, have eagerly backed the initiative. Last month, CMCC led a funding round into Animoca. Among the notable investors joining this venture are EOS blockchain developer Block.one, Richard Li’s Pacific Century Group, and Hong Kong-based growth equity investment firm Jebsen Capital.The Titan Fund is structured to channel its capital into three primary investment categories: blockchain infrastructure, consumer applications, and crypto financial services. Martin Baumann, Co-Founder of CMCC Global, emphasized the fund’s commitment to fostering innovation in the blockchain space. He stated:“If Hong Kong continues on its route of embracing Web3, there will naturally be more and more entrepreneurs starting companies in that space. And we can be their first capital.”Exploiting Asia’s Web3 opportunityBased on commentary by Baumann earlier this year, the CMCC Global Co-Founder certainly believes that an opportunity has opened up in Asia where Web3 is concerned. In May Baumann told Bloomberg TV that regulatory issues unfolding in the United States represented an opportunity for Asia.In criticizing the US, Baumann stated:“The US has been quite negative from the regulatory perspective and it really seems to us that the US is shooting itself in the foot with a machine gun.”Developing upon the inherent opportunity implicated in that difficulty in the US, he said: “We see places like Hong Kong having a real opportunity at this point in time to bring those firms and entrepreneurs to the city.”There’s plenty of capital sitting on the sidelines waiting for the right entry valuations to pull the trigger,” he added.Hong Kong’s crypto ascendencyThe venture capitalist may have been right on both counts. This funding announcement coincides with Hong Kong’s resurgence in the crypto arena. Historically, the city had been home to industry giants like BitMEX and Alameda Research.Recent developments indicate that Hong Kong is actively collaborating with China to establish itself as a thriving hub for crypto innovation. The Chinese autonomous territory has been encouraging crypto start-ups on the Mainland to relocate to Hong Kong. In August, it granted licenses to HashKey Exchange and OSL to offer crypto trading services to retail traders.The Titan Fund’s successful capitalization demonstrates the growing interest and confidence in Asia’s blockchain ecosystem. CMCC Global, with its pool of investors, is aiming to play a pivotal role in supporting and nurturing the next wave of blockchain startups in the region.

CipherBlade Opens Singapore OfficeThe emerging crypto hubs in Asia continue to make progress and on this occasion blockchain and crypto investigations firm, CipherBlade has decided to be part of that emerging growth in Singapore, opening an office in the city state.Cybercrime investigationsAccording to Asia-centric digital assets publication, Blockhead, the firm’s decision to open an Asian base was rooted in a need to service the requirements of a growing client base in the region, as demand intensifies for its services. CipherBlade has developed an expertise in the particular niche of blockchain analytics, cryptocurrency investigations and digital forensics.The firm was co-founded by its lead investigator Richard Sanders in 2018. Initially based out of Pittsburgh, CipherBlade has team members distributed internationally, in Europe, and now also in Singapore via its new office location.CipherBlade’s CEO of Americas, Justin Maile, said that “Singapore is a perfect location for us, with its strong reputation as a financial hub and its commitment to technological innovation.”With the expansion, it is understood that the company is currently recruiting to fill a variety of specialist positions.Photo by cottonbro studio on PexelsTracking down hackersAs the crypto and blockchain sector as a whole grows, it has also been accompanied by a significant component of illegal and illicit activity. This includes money laundering, fraud and hacking. The stand out example in the Asian region would be the activities of hacker collective, Lazarus Group.The hacker group has become notorious in the crypto space, given the extent to which it has pulled off hacks of various entities and DeFi networks in the sector. Hacks and exploits of DeFi networks accounted for 82% of all digital assets stolen in 2022. Lazarus Group has received particular attention as it is understood to be affiliated with the North Korean regime.The default approach for start-ups across all sectors is to focus on growth. The danger for start-ups in the DeFi space is that they overlook elements of network security in pursuing that growth, when achieving a high level of network security is an incredibly difficult task to begin with.Collaborating with industry stakeholdersThe activities of Lazarus Group and other more disparate entities like them, have created a need for the services of companies like CipherBlade. To that end, the firm collaborates with a wide range of industry stakeholders, including regulators, law enforcement, intelligence agencies and cryptocurrency exchanges.Recent work the blockchain forensics and cybercrime firm has been involved in includes a class action lawsuit brought against failed crypto lender Voyager. The allegation of the class action is that Voyager built in hidden fees to the detriment of customers.From crypto divorces to ‘pig butchering’ scamsPointing to the diversity of the firm’s work, it has been involved in over 150 crypto divorce cases. That is to say, tracking down digital assets belonging to one of the parties to a divorce so that those assets are recognized and made part of any divorce settlement.CipherBlade’s investigators have worked on cases involving ‘pig butchering’ crypto scams. These are instances of scams that lure the victim into contact with the scammer before the scammer gains their confidence, directing them onwards towards fraudulent crypto investment platforms where they’re encouraged to invest.