Multiple crypto corporate treasury announcements across Asia

Japanese cabinet approves crypto tax reformThe Japanese government has green-lit an amendment to its fiscal 2024 tax reform plan, specifically targeting the taxation of companies holding third-party-issued cryptocurrencies.Photo by Louie Martinez on UnsplashIntroducing tax exemptionAccording to local news sources, this amendment brings about a crucial change by exempting such companies from the year-end mark-to-market valuation tax.The Fiscal Year 2024 Tax Reform Outline, now approved by the Japanese cabinet, marks a departure from the previous tax regime. Under the new framework, companies holding crypto assets will no longer be subjected to mark-to-market valuation at the end of the fiscal year. Instead, they will be taxed solely on the actual profits realized from the sale of virtual currencies and tokens.Alleviating the tax burdenThe primary motivation behind this amendment is to alleviate the tax burden on corporations engaged in the holding and operation of crypto assets. Previously, corporations holding third-party-issued cryptocurrencies were required to record profits or losses based on the difference between market value and book value at the end of the fiscal year. The new reform, however, exempts assets assumed to be held continuously from this mark-to-market valuation.News of moves to implement such reform emerged at the beginning of December. At the time, a report by Nikkei Asia suggested that Japanese lawmakers were working towards addressing issues related to crypto taxation. Japanese regulator, the Financial Services Agency (FSA) had first proposed such changes to the tax code via a 16-page submission on Aug. 31.Signaling investor-friendly approachThis policy shift aligns the taxation of companies with the tax system applicable to individual investors, signaling a more investor-friendly approach. Lawmakers from the Liberal Democratic Party and their coalition partner Komeito had reportedly considered a proposal to exempt corporations from taxes on unrealized crypto gains. This move is seen as Japan’s effort to boost liquidity in the market, putting it in line with other Asian regions striving to become prominent centers of crypto activity.The amendment, influenced by the Japan Cryptoasset Business Association’s (JCBA) call for tax reform, is anticipated to stimulate the growth of local startup businesses utilizing blockchain technology and attract international projects to the Japanese market.The proposal is set to be presented at the regular session of the National Diet (Japan’s national legislature) in January of the upcoming year, where it will require approval from both the House of Representatives and the House of Councilors.Notably, the Fiscal Year 2024 Tax Reform Outline encompasses a broader spectrum of economic policies, including a plan to reduce income tax and resident tax by 40,000 yen per person from June 2024 onwards.News of the crypto tax reform has been well-received by most industry commentators and market participants. Daiki Moriyama, Director of Singapore-based gaming blockchain project Oasys, reacted positively to the development. He told The Block:“The fact that the Japanese government has demonstrated its willingness to grow Web3 business by enacting tax reform for the second year in a row is extremely important to all Web3 business stakeholders around the world.”

With local regulator the Securities and Futures Commission (SFC) having set out guidelines for crypto firms regarding the provision of crypto staking services, two prominent Hong Kong companies have moved forward with staking-related offerings. HashKey Capital, a crypto-focused institutional asset manager, and crypto trading platform OSL, have announced the addition of staking to an Ether exchange-traded fund (ETF) and in the case of OSL, a partnership with Kiln to offer ETH staking.Photo by Raymond Yeung on UnsplashFirst spot crypto ETF in APAC to support stakingIn a press release published on April 11, HashKey Capital outlined that its Bosera HashKey Ether ETF, which was jointly launched with Bosera Asset Management in April 2024, has received approval from the SFC to engage in Ethereum staking activity from April 25 onwards.  HashKey claimed that its ETH ETF product is the first spot crypto ETF within the Asia-Pacific (APAC) region to support staking. The company stated: “By enabling staking, the ETF aims to enhance potential returns for investors, creating a new avenue to participate in the Ethereum ecosystem through a regulated virtual asset investment vehicle.” The staking service will be extended to the ETF by another HashKey Group company, HashKey Cloud, a Web3 infrastructure provider. HashKey Capital and HashKey OTC Global CEO Deng Chao said that the institutional-grade staking infrastructure of HashKey Cloud was being leveraged in order to provide a secure, efficient and regulated vehicle to access staking rewards with ease to both professional and retail investors.  The ETF is listed on the Hong Kong Stock Exchange (HKEX). It tracks the price of Ether via the CME CF Ether-Dollar Reference Rate, a daily benchmark index price that aggregates Ether trade data from various sources. Competitive edgeBoth HashKey and the Hong Kong authorities have stolen a march on their international counterparts with the launch. In recent months, efforts have been building in the United States by spot ETH ETF providers to add a staking element to these offerings.Robert Mitchnick, head of digital assets at the world’s largest asset manager, BlackRock, told last month’s Digital Asset Summit in New York that the lack of availability of a staking yield as part of U.S. spot ETH ETFs is likely to be holding the development of the products back. He added:”A staking yield is a meaningful part of how you can generate investment return in this space, and all the [ether] ETFs at launch did not have staking.” HashKey and OSL were the first two entities to be issued trading licenses by the regulator in Hong Kong. OSL is also looking to take advantage of the new regulatory clarity related to crypto staking in Hong Kong. On April 10, it published a press release, outlining details of a partnership that it has formed with enterprise-grade staking infrastructure firm, Kiln. By integrating with Kiln’s API infrastructure, OSL is now enabled in offering clients of its custody platform access to staking services.Kiln co-founder and CEO Laszlo Szabo underscored the significance of regulatory approval of staking in Hong Kong, while stating:”With the future integration of staking, these products will offer investors both exposure to ETH price movements and rewards for securing the Ethereum network.”

Digital asset insurer funds Middle East expansionOneDegree, a Hong Kong-based InsurTech startup is expanding its area of engagement to the Middle East, funded through an undisclosed investment from Dubai Insurance.Fresh funding round to finance growthThe seven-year-old startup announced on Friday that it has secured further funding, solidifying its commitment to Middle East expansion while building upon the success of OneDegree’s $55 million Series B round in June. Total funds raised are believed to be in the region of $100 million.The Series B round was required to expand its digital assets insurance portfolio. Similarly, the partnership with Dubai Insurance is aimed at facilitating OneDegree’s expansion into the digital asset insurance sector within the United Arab Emirates (UAE) and the Gulf region. The startup firm will now proceed to establish a new entity in Dubai and hire staff locally to take on new business in the region.Among its notable investors are Alibaba Entrepreneurs Fund (AEF) Greater Bay Area Fund, Sun Hung Kai & Co and Cathay Venture, the venture capital arm of Taiwanese billionaire Tsai Hong-tu’s Cathay Financial Holdings. OneDegree’s CEO, Alvin Kwock, has stated that the company is on track to achieve profitability by the second half of 2024.Photo by Roman Logov on UnsplashMinisterial interestIt’s understood that the UAE’s economy minister, Abdulla bin Touq Al Marri, had outlined his interest in OneDegree bringing its service offering to the UAE when he met with representatives from the company at the Belt and Road Summit in Hong Kong in September.Given that OneDegree is planning to service the digital assets sector in the UAE, the move aligns with Dubai’s new crypto regulatory framework implemented earlier this year, which mandates insurance coverage for licensees engaged in crypto-related businesses to safeguard users’ funds. Major players in the crypto industry, such as Binance, Crypto.com and OKX, have already established a presence in Dubai.Only digital asset insurer in AsiaIn a video interview from Dubai on Friday with Forbes, Alvin Kwock emphasized OneDegree’s unique position as the first and only licensed insurer in Asia capable of providing digital asset insurance.Kwock revealed that approximately half of the world’s top 20 crypto exchanges have approached OneDegree for its digital asset insurance, with some of them already being clients. The startup has extended its services to around 30 companies, including Cactus Custody, the custodian unit of Singapore’s Matrixport; Rakkar Digital, backed by Thailand’s Siam Commercial Bank; and Hashkey, one of Hong Kong’s licensed crypto exchanges.In July it penned a deal with blockchain infrastructure firm Blockdaemon. Meanwhile, it has been underwriting digital assets for crypto custodian METACO since November 2022.Anticipating substantial growth, Kwock expects the number of OneDegree’s digital asset insurance customers to surpass 100 by the end of 2024. He foresees this segment constituting about half of the company’s total business in the coming year, up from the current level of 30%. Kwock underscored the evolving dynamics in the crypto market, emphasizing the increasing importance of risk management and the essential role of insurance in the digital asset industry.OneDegree’s expansion into the UAE aligns with the nation’s crypto-friendly policies, actively attracting firms to leverage its supportive regulatory environment. Indirectly, it also serves the Hong Kong government’s strategy to deepen business ties with the Middle East.