Taiwan’s FSC plans crypto draft regulations by September

Dunamu’s Luxury Watch Trading Platform Appoints New C-Suite ExecutivesViver, the luxury watch trading platform and subsidiary of Dunamu, the operator of South Korean cryptocurrency exchange Upbit, has recently made c-suite appointments, as reported by local news outlet News1.Photo by Jaelynn Castillo on UnsplashNew appointmentsThe new CEO of Viver, Moon Jae-yeon, brings a wealth of expertise in running online e-commerce platforms. Before joining Viver, Moon held the position of Chief Strategy Officer (CSO) at Market Kurly, an online platform famous for its early-morning grocery deliveries. Prior to that, he worked at eBay Korea for 17 years.Joining Moon is Seo Hee-sun, who assumes the role of Chief Operating Officer (COO) at Viver. Seo has an impressive background as the Business Group Manager at 11th Street, a major online shopping website in the nation, and has accumulated over two decades of experience in this field.Luxury watchesEstablished just two years ago, Viver aims to leverage Dunamu’s digital asset business know-how to set new standards for trading luxury watches, which serve as both real-world assets and investment vehicles. The appointment of these industry experts is a major step towards achieving this goal.Last year, Viver made noticeable strides in expanding its services. The platform launched its own online application service and also opened a brick-and-mortar store in Apgujeon Rodeo, a bustling hub for fashion enthusiasts in Seoul. Moreover, Viver Labs, the watch trading platform’s repair service, offers expert diagnosis and repair of watches from various high-end brands, including Rolex and Audemars Piguet.Moon has expressed his ambition to elevate Viver’s reputation to the level of renowned timepiece e-commerce platforms like WatchBox in the US and Chrono24 in Germany within the next five years. He emphasized that the company intends to take advantage of Dunamu’s cutting-edge blockchain technology and infrastructure to gain a competitive edge in the market.

BitMEX CEO Calls for an End to Internal Market MakersIn a recent interview, Stephan Lutz, the acting CEO and group CFO of 100x Group, the parent company of Seychelles-headquartered global crypto exchange BitMEX, expressed his belief that crypto exchanges should phase out their internal market-making teams.Photo by Joe Roberts on UnsplashProp trading desks unnecessarySpeaking with The Block, Lutz argued that with the growth of institutional liquidity providers and high-frequency traders (HFTs) in the market, proprietary trading desks are becoming unnecessary.Lutz stated: “You have enough HFTs out there and prop shops that can perform that function.” He was referring to the role of liquidity providers in filling gaps in the market. He made these comments in response to the emergence of information earlier this week that raised questions about internal trading practices at Crypto.com, a Singapore-based exchange.BitMEX, once the world’s largest crypto derivatives exchange, also used to employ internal traders who acted as market makers. However, Lutz explained that BitMEX’s internal trading team, named Arrakis Capital, now functions primarily as a “treasury desk.” He sees this transition as a natural evolution for crypto exchanges in a market that has matured and attracted more institutional liquidity providers.Arrakis Capital currently performs limited functions, including converting commission fees earned in Bitcoin into fiat currency for operational purposes, hedging BitMEX’s exposure to tokens held as inventory, and making markets for BitMEX’s token $BMEX. Lutz clarified that Arrakis’s market-making activities are limited because external market makers find the token’s liquidity insufficient.Regarding profitability, Lutz stated that Arrakis earns “very minor returns” of up to $100,000 per month from holding T-Bills, but it incurred losses last year. He noted that Arrakis used to play a more significant market-making role when BitMEX dominated the crypto futures market. However, he assured that the trading desk was always segregated, despite accusations in the past.Fee structuresLutz acknowledged that exchanges with internal trading teams have faced increased scrutiny since the controversies surrounding Alameda Research and FTX. To differentiate between benign internal trading teams and hedge fund-like operations, Lutz highlighted several factors, including the separation of client funds and house funds, access to sensitive data, and the ability to move markets on their own exchange. Fee structures also play a role, with low or no transaction fees potentially signaling a market-making motive rather than serving as a counterparty.Lutz’s perspective suggests that crypto exchanges should rely on external liquidity providers and HFTs rather than maintaining internal market-making teams. He argues that the market has evolved. At this point he feels that these teams are no longer necessary, due to the presence of established players within the digital assets space.As regulatory scrutiny grows, ensuring transparency and avoiding conflicts of interest become crucial for maintaining trust within the crypto exchange ecosystem. The digital assets industry is far from arriving at a mature stage in its development. While many in the industry have found the stance taken by regulators to be unhelpful, the industry itself must also demonstrate its ability to iteratively move towards best practice, without that being a knee-jerk response to regulatory enforcement.

Crypto Trading Surges in South Korea While Global Trends DeclineDespite a global decrease in cryptocurrency trading on centralized exchanges, South Korea has witnessed a significant increase in trading activities. Upbit, the nation’s largest crypto exchange, climbed to the second spot in global spot trading volume for July.Photo by Viktor Forgacs on UnsplashPlunges in global trading volumesAccording to an Exchange Review for July 2023 by CCData, a virtual asset data provider, the total global spot trading volumes on centralized exchanges dropped to $515 billion in July, a 10.5% decrease compared to the previous month, marking the second lowest level since 2019. Additionally, derivative trading volumes fell by 12.7% to $1.85 trillion, the second-lowest since December 2020.Experts attribute these declines to increased regulations on cryptocurrencies worldwide, such as legal crackdowns on exchanges like Binance and Coinbase by the US Securities and Exchange Commission.Binance, the world’s largest cryptocurrency exchange, recorded a trading volume of $208 billion with a market share of 40.4% in July, marking a five-month consecutive decline, although it still maintained its title as the largest platform worldwide for crypto spot trading.Coinbase — the largest cryptocurrency exchange in the US — and global exchange OKX also saw a decline in trading volume of 11.6% and 5.75% to $28.6 billion and $29 billion, respectively.Crypto exchanges flourish in KoreaContrarily, the majority of major crypto exchanges in Korea experienced significant growth in trading volume. Upbit’s trading volume skyrocketed by 42.3% to $29.8 billion in July, surpassing Coinbase and OKX for the first time to claim the second spot in global cryptocurrency exchanges behind Binance.Other Korean exchanges also saw remarkable increases in trading volume. Bithumb recorded $6.09 billion, a surge of 27.9%, while Coinone’s volume rose by 4.72% to $1.39 billion.These spikes in trading volume can be accredited to an increased interest in cryptocurrencies and blockchain technology among citizens throughout the country, despite global regulatory challenges impacting the market. As the cryptocurrency industry continues to evolve, Korean exchanges are showing resilience and maintaining their competitive positions on the global stage.