GRVT snags license to become world’s first regulated DEX

150 Web3 Firms Emerge via Cyberport Within 12 MonthsHong Kong’s Cyberport, the flagship technology hub of the Chinese autonomous territory, has experienced exceptional growth over the past year, attracting more than 150 companies operating in the Web3 space.Photo by Ruslan Bardash on UnsplashA hotbed of innovationThe latest blog post by Hong Kong Financial Secretary Paul Chan, published on Sunday, sheds light on the remarkable success of Cyberport. It currently houses over 1,900 community enterprises, with a cumulative financing figure surpassing 35.7 billion yuan ($4.98 billion).One of the notable achievements of Cyberport is its portfolio of over 480 intellectual property projects, showcasing its commitment to fostering innovation. Moreover, Cyberport has played a pivotal role in nurturing the growth of several successful ventures, including six “unicorns” that have emerged from within its vibrant community.The Web3 space at Cyberport boasts prominent firms such as Hashkey Group, a licensed cryptocurrency exchange; Animoca Brands, a Web3 venture capital and game developer; and Consensys, the renowned Ethereum software company responsible for the widely-used crypto wallet MetaMask. The presence of these industry leaders further cements Cyberport’s status as a hub for cutting-edge technologies and groundbreaking ideas.Funding allocationRecognizing the immense potential of Web3 technologies, the Hong Kong government has allocated 50 million yuan ($6.9 million) from its financial budget to support Cyberport’s initiatives. This funding injection aims to expedite research and development efforts and foster the creation of innovative applications within the third-generation internet powered by blockchain technology.In addition to its achievements in the Web3 space, Cyberport has made significant strides in virtual asset trading and other sectors. Notably, in 2022, one of Cyberport’s companies became the second licensed virtual asset trading platform approved by the Securities and Futures Commission (SFC) in Hong Kong. This milestone solidifies Cyberport’s position as a driving force in the advancement of the digital asset ecosystem within the city.Emerging start-up successFurthermore, several technology-driven startups incubated by Cyberport have successfully launched initial public offerings (IPOs), showcasing the hub’s effectiveness in propelling ventures towards public market success. Notable examples include a smart logistics company and a travel platform.Hong Kong’s Web3 industry is witnessing a surge in blockchain-based security products, signaling a growing interest among investors. UBS and the Bank of China’s Hong Kong-based investment arm recently unveiled a groundbreaking blockchain-based structured note, marking the city’s first private security product on a public blockchain.The development team behind layer one blockchain, the Internet Computer Protocol (ICP), indicated in April that it planned to develop a hub within Cyberport, following its participation at Hong Kong’s Web3 Festival that month. The event was a success, attracting over 10,000 attendees.This achievement follows the successful launch of a government-backed green bond in February, which utilized a private blockchain platform provided by Goldman Sachs. These developments showcase Hong Kong’s commitment to developing its Web3 industry beyond cryptocurrencies, expanding into new realms of finance and technology.To ensure a regulated and secure environment for investors to participate in the growing sector, Hong Kong introduced licensing regulations on June 1 for cryptocurrency trading platforms catering to retail investors. These regulations demonstrate the city’s proactive approach to embracing innovation while prioritizing investor protection.

Korean Financial Authority Orders Suspension and Levies $1.4M Fine on Crypto Lender DelioDelio, a cryptocurrency lending company based in South Korea, has received a directive from the financial regulatory authority to cease its operations for a duration of three months, according to local news agency Yonhap. Additionally, the company has been levied with a fine amounting to KRW 1.896 billion ($1.4 million).Photo by Riva Ferdian on UnsplashExecutive dismissal recommendedThis announcement was made on September 1 by the Financial Intelligence Unit (KoFIU) under the South Korean Financial Services Commission. In addition to the measures mentioned above, the KoFIU advised the company to remove one of its executives.As a virtual asset service provider (VASP) registered with the financial regulatory authority, Delio offered deposit services with an annual yield reaching up to 10.7%. However, in June of this year, the company abruptly halted its withdrawal services, prompting investigations conducted by both the KoFIU and public prosecutors.Involvement with unregistered VASPsThe KoFIU saw that Delio had engaged in trading activities with unregistered VASPs and had also breached the restrictions on the trading of affiliate-issued virtual assets. These actions are prohibited under the Financial Transaction Information Act.The financial authority identified a total of 171 instances in which Delio facilitated the transfer of its customers’ virtual assets to unregistered VASPs located outside the country. Additionally, the authority also uncovered the company’s engagement in storing the virtual assets of unregistered VASPs.It was also discovered that Delio had not only neglected to assess the risks of money laundering before introducing new products or services but had also failed to fulfill Know Your Customer (KYC) obligations.

Hong Kong Reiterates Web3 Credentials and CommitmentHong Kong is committed to growing the Web3 industry under appropriate regulations, according to government officials.©Pexels/Andrea PiacquadioAt the four-day Web3 Festival, which is the largest Web3 event that the city has hosted since declaring its intention last year to become a digital asset hub, Financial Secretary Paul Chan stated that the stability of the financial system and investor protection should not be damaged, and that appropriate regulations are a must to create a sustainable development environment and a more ideal space for development.DeFi licensing requirementSome attendees were surprised to learn that the Securities and Futures Commission (SFC) believes that decentralized finance (DeFi) platforms for virtual assets need a license under existing rules. Keith Choy, interim head of the intermediaries division at the SFC, stated that people operating or performing DeFi activities should be subject to Hong Kong’s licensing requirements.This means that if Hong Kong really intends to regulate DeFi, it will have a stricter environment than Singapore. The Web3 industry has been closely watching the development of a new regulatory framework for virtual assets in Hong Kong since the city revealed at the end of October its intention to become a cryptocurrency hub. Under new regulations that go into effect in June, cryptocurrency exchanges serving customers in Hong Kong must be licensed by the SFC.10,000 Web3 Festival attendeesThe event attracted more than 10,000 people ahead of the conference, with several big-name speakers and exhibitors looking for new opportunities in the city. OKX and Filecoin were some of the large cryptocurrency firms in attendance, as were traditional tech firms like Tencent Cloud, which had a booth touting its blockchain-related services for corporate clients. Alibaba Cloud was also a co-organiser, along with Amazon Web Services and Hong Kong’s Cyberport.Binance co-founder and CEO Zhao Changpeng (CZ) also dialed in via video for a fireside chat. Last month, the US Commodity Futures Trading Commission (CFTC) sued CZ and Binance over what it alleged was “sham” compliance with domestic regulations. The company has been scrutinized over connections to its local firm Binance.US, which legally is meant to operate as a separate entity. Zhao was not asked and did not address his legal troubles at the conference. However, he did note that Binance is in talks with regulators in many markets.“We are actively engaged with regulators all around the world,” Zhao said. “Many of them are very receptive, some of them are still skeptical, and that’s fine, but we need to engage. We need to have dialogue, we need conversations, and we also need patience.”Singapore comparisonsHong Kong has frequently been compared with Singapore, which had been considered a friendlier market for related activity until Hong Kong’s policy shift. Some attendees had hoped that Hong Kong’s shift would provide some competition for Singapore in the region. “We did see a very obvious trend of people flying to Singapore to make sure their business was part of this space,” said Luke Liu, chief core ecosystem contributor at cross-chain protocol developer Poly Network. “Hong Kong and Singapore can coexist in some sense, but there is definitely a very positive change going on recently because of the Hong Kong policy announcement.”Hong Kong has reaffirmed its commitment to growing the Web3 industry under “appropriate” regulations, with the stability of the financial system and investor protection as a top priority. This has been reiterated during the largest Web3 event in the city since declaring its intention to become a digital asset hub.