RWA tokenization gaining momentum in UAE

Suspects emerge in Taiwan in ongoing JPEX scandal falloutIn the ongoing saga surrounding the collapse of Dubai-headquartered cryptocurrency exchange JPEX, Taiwanese prosecutors have identified new suspects, marking a significant development in the case.The Taipei District Prosecutors Office (TDPO) has requested the custody of Chang Tung-ying, chief partner at JPEX’s Taiwan office, over allegations of fraud. That’s according to a report by local TV channel TVBS News on Thursday.Photo by Ricky Zeng on UnsplashMoney laundering and Banking Act violationsThis latest development brings a new twist to the scandal, which has largely been playing out in the Chinese territory of Hong Kong. The TDPO reportedly conducted searches at nine locations linked to the JPEX investigation. Chang, along with three other individuals, including JPEX lecturer Shih Yu-sheng (also known as Shi Yu), was summoned by the authorities. Chang and Shih are being investigated for violations of the Banking Act and the Money Laundering Control Act.During the investigation, JPEX salespersons Liu Chien-fu and Niu Keng-sheng were released, with Liu being granted bail of 50,000 New Taiwan dollars ($1,550). Niu, the registered person in charge of JPEX Taiwan, was released after questioning.Celebrity promoter focusThe report also revealed that Nine Chen, a Taiwanese celebrity and singer who previously served as a brand ambassador for JPEX, was summoned by prosecutors. He has cooperated with law enforcement in the role of a witness to the alleged fraud who has testified to illicit activity carried out by the platform. However, it is now understood that recent events have developed such that Chen is now being treated as a defendant.This action resonates with actions taken by the authorities in Hong Kong some weeks ago in the earlier stages of investigation into this affair. In September, one of the first actions taken by Hong Kong law enforcement was the arrest and detention of social media influencer and former lawyer Joseph Lam, known to followers as “Jolamchok” on the Instagram platform.Alleged liquidity crisisJPEX, once a successful crypto exchange, abruptly halted some services in mid-September, citing a liquidity crisis triggered by alleged “unfair treatment” from institutions in Hong Kong. The sudden implosion led to accusations of misleading investors regarding the application for a crypto trading license and other issues.The scandal surrounding JPEX has escalated into a major industry concern, prompting investigations by Hong Kong authorities. Over 2,000 complaints from JPEX users, reporting losses of nearly $180 million, have triggered significant regulatory attention.As investigations progressed in Hong Kong, the authorities took the decision to block access to the platform, with the platform responding by advising customers to circumvent this restriction through the use of a virtual private network (VPN).As of September 25, law enforcement has arrested at least 11 alleged suspects in the JPEX case, while the alleged masterminds remain at large. At that time, Hong Kong’s Securities and Futures Commission (SFC) pledged to renew its efforts to combat unregulated crypto platforms in Hong Kong.A survey conducted by the Hong Kong University of Science and Technology (HKUST) business school has indicated that the affair has had a negative impact on public sentiment towards crypto more recently.

After being targeted in a $1.4 billion hack, the global crypto exchange platform Bybit was awarded in-principle approval to establish itself as a Virtual Asset Platform Operator (VAPO) within the United Arab Emirates (UAE). While Bybit announced the milestone via a press release published on Feb. 27, the approval had been awarded on Feb. 18, three days before the platform was hacked.Photo by Saj Shafique on UnsplashRegulatory challengesIn addition to the recent exploit, the crypto exchange platform had been having difficulties on the regulatory front in recent months, and from that perspective, this licensing award is a welcome development. Last December, the Malaysian Securities Commission reprimanded the platform and its CEO, Ben Zhou, for carrying out digital asset trading activities in Malaysia without having obtained the necessary licensing. Consequently, the firm left the Malaysian market, promising to return once it had obtained the required licenses. For similar reasons, Bybit left the Indian market in January, citing a need to “operate in full compliance” with local regulations. The company said that it was working with the regulator to finalize its registration as a Virtual Asset Service Provider (VASP) in India. The platform also experienced difficulties in complying with the recently introduced Markets in Crypto Assets (MiCA) regulation in Europe. However, it has been working with regulators in Austria in an effort to acquire MiCA licensing. Consequently, the French regulator, Autorité des Marchés Financiers, removed the firm from its blacklist. Earlier this month, Japan’s Financial Services Agency (FSA) ordered Apple and Google to remove the apps of a number of unregistered crypto platforms, including Bybit, from the Japanese versions of their app stores.  Commenting on this recent achievement in the UAE, Ben Zhou stated: “This approval marks a crucial step in our journey to providing secure and transparent crypto trading solutions. Bybit remains dedicated to working hand-in-hand with regulators to foster a compliant and innovative digital asset ecosystem to both retail and institutional investors in the UAE.” Hack falloutIt’s unclear to what extent the recent hack, which is understood to be one of the largest thefts of any kind, may be diverting resources and focus away from the efforts the company was making to address regulatory issues globally. However, it’s reasonable to assume that recent events make for a challenging time for the company. On Feb. 26, the Federal Bureau of Investigation (FBI) in the United States said that North Korea was responsible for the hack. The agency warned exchanges to freeze transactions linked to the stolen funds. The FBI outlined that “TraderTraitor” actors have been converting the funds to Bitcoin and other digital assets in an effort to launder the funds and eventually extract the funds in fiat currency. North Korea’s Lazarus hacking group has gained notoriety for its successes in hacking crypto platforms and the sophisticated nature of the attacks mounted in the process. The group is suspected of having hacked the Indian crypto platform WazirX last year, which resulted in the theft of $235 million in digital assets.

Harvest Global to establish fixed income tokenized fundHong Kong investment firm Harvest Global Investments, in partnership with Meta Lab HK, is set to offer a tokenized U.S. dollar bond fund.The collaboration between Harvest Global Investments (HGI), an affiliate of Harvest Fund Management, and Meta Lab HK, backed by Harvest Digital Assets, marks a significant development in the crypto investment landscape within Hong Kong and the broader Asian region.Photo by Giorgio Trovato on UnsplashFirst fixed-income tokenized fund from Chinese institutionMeta Lab HK announced details of the new offering, detailed in a Nov. 22 post on X (formerly Twitter). The fund targets professional investors and will concentrate on U.S. dollar bonds with an investment-grade rating. Meta Lab wrote:”We have learned that this will be the first fixed-income tokenized fund introduced by a Chinese financial institution in Asia with a tokenization arrangement. The fund is exclusively available to professional investors and primarily invests in investment grade U.S. dollar bonds.”Meta Lab added, “The offering is set to be managed by HGI, a subsidiary of Harvest Fund in Hong Kong, with Meta Lab HK providing the tokenization solution.”The tokenization of the fund, a process transforming traditional financial assets into digital tokens, is expected to enhance accessibility and efficiency for investors. The notification to Hong Kong’s securities regulator has been duly completed, underscoring the compliance and regulatory adherence of the initiative.The move comes amidst a series of noteworthy developments emerging from Asia, occurring against the backdrop of persistent regulatory challenges facing the cryptocurrency industry in the United States.CoinFund market entryThis announcement follows closely on the heels of CoinFund, a New York-based investment firm, which revealed its plans to expand services into Asia earlier this week. Choosing Hong Kong as the inaugural location for this expansion, CoinFund cited the city’s appeal to crypto talents as a key factor. As Asia takes strides in pioneering tokenized funds, it suggests a competitive landscape in digital asset development that could rival the United States.It’s likely that Hong Kong is providing a workable environment for Harvest Global to take this tokenized product to market. In August, the local regulator, the Hong Kong Monetary Authority (HKMA), published a report where it indicated an interest in pursuing tokenization as a means to improve aspects of the bond market. The report presented outcomes of Project Evergreen, an initiative the HKMA had been running to examine the potential of tokenization, which also incorporated the launch of a first-of-its-kind tokenized green bond.Regional tokenization interestRecent weeks have also seen further efforts being made within the Asian region in terms of bond tokenization. Last week, SC Ventures, the Singaporean investment subsidiary of British banking group Standard Chartered, unveiled a new platform called Libeara. That platform is working towards the launch of the first-ever tokenized Singapore dollar government bond fund.In the same week, the Bureau of the Treasury in the Philippines announced that it is issuing $179 million in one-year tokenized bonds, with the bonds being facilitated by the Development Bank of the Philippines and the Land Bank of the Philippines.