FalconX further expands APAC reach into Hong Kong

Boyaa Interactive Greenlights $5 Million Investment in Bitcoin and EtherBoyaa Interactive International Limited, a Hong Kong-based investment holding company with a track record in developing online chess, card, and puzzle games, has made a strategic move with a proposed investment in digital assets.The company’s board of directors has recently given the green light for the allocation of a substantial budget amounting to $5 million for the purpose of acquiring cryptocurrencies.Photo by Traxer on UnsplashWeb3 positioningThe Chinese company, incorporated in the Cayman Islands, announced the move as Boyaa Interactive seeks to position itself for a dynamic shift into the realm of Web3.While the exact allocation breakdown was not detailed in the disclosure, the company outlined that its primary focus would be on procuring established cryptocurrencies, specifically Bitcoin (BTC) and Ether (ETH). Boyaa Interactive intends to execute these purchases through regulated and licensed trading platforms within the upcoming year.In a letter addressed to its shareholders and potential investors, the company emphasized the strategic nature of this decision:“The purchases of cryptocurrencies are for the consideration of the Group’s future business layout into the field of Web3. The Board is of the view that the purchases of cryptocurrencies (including mainly Bitcoin (BTC) and Ether (ETH)) by the Group are in the interests of the Company and its shareholders as a whole.”A challenging recent historyThe move towards cryptocurrencies is a significant pivot for Boyaa Interactive, a company that has navigated a series of challenges in recent years. In 2018, the company’s Chairman and CEO, Zhang Wei, faced legal troubles and was sentenced to 12 months in prison for bribery, which led to his resignation from all executive and management positions.Subsequent restructuring saw Dai Zhikang stepping in as the new Chairman of the board, while Tao Ying assumed the role of an Executive Director and Chairman of the Nomination Committee.Financially, Boyaa Interactive experienced a tough period marked by revenue contraction. The company reported revenue declines over the course of 2018, largely attributed to a governmental crackdown on online poker applications and the discontinuation of poker as a recognized competitive sport. Regulatory risks stemming from the Chinese government’s stance on Texas Hold’em poker games resulted in a substantial falloff in revenue by comparison with past performance.Funds seizureThese challenges cascaded into the following year, when the company encountered a substantial freeze on its funds. In 2019, a Chinese court ordered the freezing of RMB 635 million (approximately $88.6 million) belonging to Boyaa Interactive, following the legal actions against Zhang Wei and his associated entities.One of the company’s subsidiaries, Boyaa Shenzhen, was found guilty of offering bribes. The company responded by clarifying that the frozen funds could potentially be confiscated if linked to Zhang’s misconduct. However, Boyaa Interactive also stressed that it had not been directly implicated in the case, thus mitigating the legal risks to the broader organization.Amidst these adversities, Boyaa Interactive’s decision to invest in cryptocurrencies demonstrates its openness to adapting to changing technological landscapes and exploring new opportunities in Web3.

Bithumb and Korbit Struggle to Gain Traction Despite Zero Trading FeesSouth Korean cryptocurrency exchanges Bithumb and Korbit have recently eliminated trading fees, but their bold decision hasn’t yielded much results. Bithumb was the first to implement this change and attracted users for about a week, but it is now seeing a loss in market share. Korbit, following Bithumb’s example, is also struggling to achieve meaningful outcomes.Photo by Alexander Grey on UnsplashLimited impactLocal media outlet Chosun Biz used data from crypto data platform CoinGecko to draw this conclusion. On October 26, Korbit’s daily trading volume represented 0.19% of the total trading volume among South Korea’s top five crypto exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax). This figure marked a 0.14 percentage point increase compared to the 0.05% recorded on October 19. Korbit had implemented a zero trading fee policy at 9 a.m. (KST) on October 20. Additionally, they launched a promotion offering KRW 5,000 ($3.69) worth of bitcoin to users who transferred virtual assets totaling KRW 1 million or more from Travel Rule-compliant exchanges to Korbit. While the promotion did contribute to Korbit’s market share, it still remains below 1%.Bithumb’s performance showed some improvement, albeit briefly. As of October 26, Bithumb’s market share stood at 18%, marking a 4.7 percentage point increase from its 13.3% share on October 3, the day before it eliminated trading fees. However, it’s worth noting that its market share had reached almost 30% shortly after the promotion’s launch. This indicates that its strategy is losing efficacy over time.The less-than-enthusiastic results from their daring marketing endeavors can be attributed to their inability to draw in retail investors. To begin with, Upbit, the leading player in the market, had already been providing a relatively low fee of 0.05%. Furthermore, adapting to new user interfaces on these exchanges posed a challenge. Zero trading fees weren’t attractive enough for crypto investors to leave their current platforms.Trading volume mattersIn the case of Korbit, its lower trading volume was a disadvantage when it came to attracting users. On crypto exchanges, a higher trading volume typically translates to faster trade executions. As a result, users of Korbit might experience delays in executing trades at their preferred price.Jeong Hye-won, a research associate at crypto data analytics platform Xangle, told Chosun Biz that users on exchanges with lower trading volumes tend to experience slippages due to slower transaction speeds and sparsely populated order books. A slippage means the difference between the initially placed order price and the executed order price. Jeong further explained that Korbit’s zero trading fee policy didn’t have a significant impact because it offers fewer listed tokens compared to Upbit and Bithumb.There is speculation that the free-trading fee promotions introduced by Bithumb and Korbit, despite their revenue sacrifices, might conclude sooner than initially anticipated due to their perceived ineffectiveness. Bithumb derives 99.95% of its revenue from trading fees, while Korbit relies on trading fees for 99.79% of its income. An industry insider has commented that trading fees play a vital role in an exchange’s revenue, and given Bithumb’s reported loss in earnings during the second quarter, there are concerns about their capacity to sustain this strategy.

Binance Japan Sets Out Market VisionDuring a virtual business discussion recently led by Takeshi Chino, the Head of Binance Japan, the firm provided insights into its vision within the Japanese market.Photo by David Edelstein on UnsplashIntegrating international version featuresSince its recent launch, Binance Japan has primarily been offering cryptocurrency spot trading and its “Simple Earn” crypto lending service. Expansion into leverage trading is on the horizon, aligning with the international version once regulatory requirements are met.Other key services that Binance has been offering on an international basis include its Initial Exchange Offering (IEO) platform “Launchpad” for emerging projects, staking services, and an NFT marketplace. While the exact timeline for introducing these services in Japan remains undisclosed, Chino assured attendees that there would be a gradual roll-out in compliance with local regulations.The vision that has been set out will see a particular focus being placed on potential collaborations involving stablecoins. Elaborating further on the company’s plans, Chino outlined that domestic expansion would encompass equities management, leverage trading, and the integration of features present in Binance’s global version.In reporting on the event, local crypto media outlet Coinpost explained that Chino further expressed Binance Japan’s ambition to establish connections between its ecosystem and Japanese private entities and government bodies, going beyond the scope of crypto transactions.Focusing on stablecoinsCentral to this vision is the integration of stablecoins into the existing financial infrastructure, with active partnerships leveraging Binance’s technology stack and track record.Chino recognizes the recent regulatory developments regarding yen-based stablecoins as a positive development for business expansion. While Japan’s stablecoin issuance framework remains stringent, collaborations for joint developments are being considered. The potential of yen-backed stablecoins for trade settlements and programmable payments is also being explored.Expanding crypto asset offeringBinance Japan has already made a significant mark by managing 34 equities since its inception, establishing itself as a leader in the Japanese equities landscape. Notably, Binance’s native BNB (Build and Build) token and the Algorand ALGO token have made successful entries into the Japanese market.In its take on the online briefing, Bloomberg outlined that Chino has an initial target of one hundred crypto assets. The global version of the company offers in excess of 350 assets to its users. In adding new assets, a focus will be placed on those particular digital assets that resonate with Japanese market preferences.Other short-to-mid-term goals include facilitating Security Token Offering (STO) payments through stablecoins, merchant onboarding for “Binance Pay,” educational initiatives, among others.Binance Japan emerged following the acquisition by Binance of Sakura Exchange Bitcoin (SEBC), a local crypto exchange, in November of last year. A regulatory backlash following a number of high profile crypto platform failures in 2022 led to Japanese regulators issuing Binance with a warning letter for failing to attain full registration.A response to past difficulties in Japan, in particular relative to the failure of Mt.Gox in 2014, meant that crypto market traders were protected better by comparison with market participants overseas.