Komainu acquires Singaporean digital asset custodian

Conflict Identified as Crypto.com Trading on its Own PlatformTrading practices at Crypto.com, the Singapore-based cryptocurrency exchange, have raised questions about potential conflicts of interest within the digital assets industry.Citing a number of unnamed sources, the Financial Times (FT) made the claim in a report published on Monday.Photo by Pixabay on PexelsConflict of interestIn traditional financial markets, exchanges typically match buyers with sellers at competitive transparent prices, while market making and proprietary trading are conducted by separate private companies. However, US regulators have recently cracked down on similar activities at digital asset exchanges. Binance, the world’s largest crypto exchange, faced 13 charges from the US Securities and Exchange Commission (SEC), including allegations of manipulative trading to inflate trading volume.The presence of internal traders at Crypto.com has not been widely known since the company’s launch in 2016. The FT’s sources claim that Crypto.com executives provided sworn statements to external trading houses denying the company’s involvement in trading activities.Employees were allegedly instructed to deny the existence of an internal market-making operation. In response to inquiries, Crypto.com denied that employees were asked to lie, stating that their internal market maker functioned similarly to third-party market makers, ensuring tight spreads and efficient markets on their platform.The majority of Crypto.com’s revenue reportedly comes from its app for retail traders, where the company acts as the counterparty for transactions and operates as a broker model. The company’s trading team hedges these positions on various venues, including their own exchange, to maintain risk neutrality. Crypto.com emphasized that their exchange provides a level playing field for institutional traders.According to insiders, Crypto.com’s proprietary trading desk engages in trading activities on the company’s exchange and other platforms, solely focused on generating profits rather than facilitating an exchange. The market making desk, on the other hand, aims to enhance liquidity on the platform.Not a revenue sourceCrypto.com defended its practices by stating that comparing trading volumes to competitors is common in the industry. It said that the company’s priority is to continuously improve order book liquidity and reduce spreads, benefiting all participants. The firm told Decrypt that trading is not a source of revenue: “While we do have some market making activity, for example, we have internal market makers for our CFTC-regulated product Up/Downs in the United States.”As a private company, Crypto.com publishes accounts in different countries, but revenue breakdown by business line is not disclosed.Closure of institutional tradingFollowing the SEC’s enforcement actions, earlier this month Crypto.com announced the closure of its exchange for institutional US traders due to limited demand in the current market landscape, effective from June 21.In any marketplace transparency and fairness are crucial. It’s fair to say that there has been some level of sharp practice among some actors in the marketplace while regulators have been lacking in getting up to speed with the emergent sector, and moving to protect consumers. With the major crypto platform failures of 2022 has come renewed interest in resolving these issues. That may make for some short-term difficulty, but in the longer term, it should mean greater protections for market participants so long as a common sense approach is pursued.

Amid the heightened excitement about the potential incorporation of virtual assets into the traditional financial system, the Korea Exchange (KRX), the country’s only securities exchange operator, plans to run a pilot test on central bank digital currency (CBDC) transactions using distributed ledger technology (DLT). The pilot test is scheduled in the second half of this year, as part of KRX’s effort to respond to rapidly evolving financial technologies, Yonhap Infomax reported.  The KRX is targeting the carbon trading market for this pilot test, aiming to develop a DLT-driven carbon trading system. The objective of this initiative is to check the feasibility of applying the Delivery versus Payment (DVP) to carbon credit trading facilitated by dedicated tokens. The project will be undertaken in cooperation with the Bank of Korea (BOK), with whom the KRX signed a memorandum of understanding last year to forge digital financial infrastructure. Additionally, the exchange is planning to create a cloud-based settlement and payment system for brokerage and non-brokerage firms.Photo by Marcin Jozwiak on UnsplashLG CNS, an integrated security system provider, and Koscom, a financial IT company, will supervise the CBDC pilot program. They are tasked with conducting a comprehensive assessment of the entire process, from developing the decentralized ledger payment system to assuring its quality.  Broad application of DLTA DLT system records all transactions on a peer-to-peer network and verifies them through every participant. This eliminates the need for a central authority, thereby increasing its reliability and transparency. Currently, the DLT is of particular interest to many financial institutions worldwide, including the SIX Swiss Exchange. These financial institutions are actively experimenting with CBDC to improve the security and efficiency of their DVP settlements.  In particular, the carbon credit market is experiencing a significant integration with the DLT. A KRX official said that the exchange plans to test the maturity of DLT systems and the interoperability between the BOK’s network and those of other organizations. This will evaluate DLT’s effectiveness within the carbon credit market. The person added that this pilot test aims to establish technological standards regarding the CBDC payment and blockchain network registration, which will provide a critical reference for future technical experiments in the industry. 

Lotte Group’s Bellygom NFT Project Garners Global Fanbase of Over 300KDaehong Communications and Lotte Homeshopping shared yesterday that their NFT project has now garnered a global fanbase exceeding 300,000 members. The two companies are subsidiaries of South Korean industrial conglomerate Lotte Group.Photo by Khinaii van Laren on UnsplashPartnership initiatives as global expansionTheir NFT initiative, operated by the group’s marketing arm Daehong, is based on Bellygom, the pink bear character representing Lotte Homeshopping. As part of its global strategy, the Bellygom NFT project has formed partnerships with various international projects and has been actively involved in communication efforts. Notably, Bellygom’s X (formerly Twitter) account, created earlier this year, has attracted 100,000 followers within a span of five months.At the end of last month, Daehong successfully completed the minting of Bellyland, the second NFT collection of the Bellygom project. The minting event was accompanied by Jelly Adventure, a universe where users can participate in a wide range of missions and games to earn “Bubble Gums.” Notably, Jelly Adventure is not only accessible to Bellyland NFT holders but also to those of other projects such as YogaPetz and Mocaverse.It’s worth highlighting that the minting event achieved the sale of over 5,000 NFTs, even during a period of reduced activity in the NFT market. Despite the declining minting prices and quantities, it managed to raise over 750,000 MATIC.Joining of new international usersAdditionally, the minting event attracted new international users to the Bellygom project, underlining its sustainability. The successful debut of Bellyland NFTs has significantly contributed to the project’s global expansion and presence.Furthermore, Daehong is pursuing a range of initiatives aimed at cultivating a fan-centric ecosystem with the ultimate objective of driving broader adoption of Web3 technologies. With the belief that the fanbase provides a strong foothold for the brand’s growth, the marketing firm plays a crucial role in facilitating the introduction of the Bellygom brand to the Web3 space. To this end, Daehong is constructing a universe with a story that embodies the brand’s identity while seamlessly integrating it with conventional marketing strategies.