UAE deepens its crypto push as Bybit wins full license and institutions move in

Korbit Report: SEC Commissioner Shares Insights on Crypto RegulationKorbit Research Center, a division of South Korea’s cryptocurrency exchange Korbit, on Monday, released a report that provides a comprehensive summary of its interview with Hester M. Peirce, a Republican Commissioner at the US Securities and Exchange Commission (SEC), which took place on August 18. The interview was conducted by Peter Chung, the head of research at Korbit Research Center.Photo by Joshua Hoehne on UnsplashKorbit’s meeting with US crypto expertsIn August, Chung made a trip to the United States, where he met with prominent figures and companies within the cryptocurrency industry to gain a deeper understanding of the ongoing institutionalization of cryptocurrencies in the United States. Through this opportunity, Korbit intends to release a series of reports that will encapsulate the valuable insights garnered during these interactions in the US.His first interviewee of the series was Commissioner Peirce, who serves as one of the five commissioners at the SEC. These commissioners are appointed by the President of the United States with the confirmation of the US Senate. To maintain political balance and impartiality, it is mandated that no more than three commissioners belong to the same political party.Peirce assumed her role as a Commissioner at the US Securities and Exchange Commission (SEC) in January 2018, following her appointment by President Trump. Before her tenure at the SEC, she held the position of Senior Counsel on the United States Senate Committee on Banking, Housing, and Urban Affairs. She is known as an advocate for technological innovation.Token safe harbor proposalPeirce earned the nickname “Crypto Mom” due to her advocacy for encouraging innovation within the cryptocurrency industry through the implementation of reasonable regulations. One notable initiative that exemplifies her perspective is the token safe harbor proposal. This proposal suggests giving blockchain network developers a three-year grace period during which they can work on building a decentralized network while being exempted from complying with the registration rules of federal securities laws, as long as certain conditions are met.During the interview, Peirce expressed concerns about recent actions taken by the SEC, which have added to the uncertainty surrounding cryptocurrency regulations. She also emphasized the need for swift legislative action to establish a framework for cryptocurrency regulation. Peirce noted that there appears to be a tendency to prioritize the classification of virtual assets over investor protection.Suggestions for KoreaAlthough Peirce hasn’t engaged in any direct interactions with Korean regulators, she suggested the Korean government optimize regulations for its own cryptocurrency industry. Her suggestion was to minimize unnecessary intervention and instead foster an environment where the sector can naturally evolve in accordance with the principles of a free-market economy.Furthermore, Peirce delved into detailed discussions on three pivotal topics: the classification of virtual assets as securities, the need for disclosure requirements, and the significance of assessing the extent of decentralization within a network.Classification of cryptocurrenciesThe Commissioner said that it is inappropriate for the SEC to contend that most cryptocurrency projects should fall under its regulatory purview. The SEC’s argument is based on the assertion that cryptocurrencies may constitute securities because they function as a medium of value exchange in fundraising activities, much like investment contracts in traditional financial markets. Despite this, she expressed optimism regarding the recent US court’s ruling on the Ripple vs. SEC case, which she believes may help rectify misconceptions surrounding the classification of investment contracts.Balancing investor protection and investor choiceMeanwhile, she expressed her viewpoint that regulations aimed at protecting investors should stay true to the disclosure principles introduced back in 1934 when the SEC was first established. However, she also argued that the SEC should avoid imposing arbitrary restrictions on investors’ choices. During the initial phases of a cryptocurrency project, there tends to be an inherent information asymmetry between crypto project leaders and individual investors. To ensure a fair investment environment, she advocated for legal mandates for disclosure. Notably, both her token safe harbor proposal and the Responsible Financial Innovation Act proposed by US Senators Kirsten Gillibrand and Cynthia Lummis incorporate such disclosure requirements.Decentralization assessmentCommissioner Peirce also approached the assessment of decentralization with a thoughtful perspective. Her Token Safe Harbor Proposal 2.0 states that after the three-year grace period, “token transactions may not constitute securities transactions if the network has matured to a functioning or decentralized network.” However, she admitted to grappling with the challenge of precisely defining what constitutes sufficient decentralization. During the conversation, she sought Mr. Chung’s perspective on this matter. In response, Mr. Chung shared that the Korbit Research Center regularly conducts measurements and assessments of the degree of decentralization for major blockchain networks every six months.Regarding the interview, Peter Chung expressed his admiration for the high-ranking official’s openness to innovation and strong communication skills. He also voiced his hope for more open discussions in Korea that could promote sustainable growth of the country’s crypto industry.

Web3 Offers Potential for Japan to Rediscover its MojoEveryone recognizes that Japan has been at the forefront of innovation and the development of technology in the past but can it rediscover that cutting edge through Web3 and blockchain? In a recent interview with Forkast News, Yudai Suzuki, Co-Founder of a Tokyo-based Web3 incubator, suggested that it has that potential.©Pexels/邱 韬Re-establishing a competitive edgeSuzuki, who heads up Fracton Ventures, believes that such a pivot is possible for Japan in making Web3 the means through which it can rediscover the innovative edge it has been lacking in more recent years.Despite an historical strength and depth in technology and innovation, Japan has struggled when it comes to adopting and implementing new technology on a global scale more recently.Legacy techEarlier this year, it emerged that leading Japanese technology companies were collaborating with a view to creating a new open metaverse infrastructure called “Ryugukoku.” That project implicates the creation of a Japan Metaverse Economic Zone. Suzuki cites this project as demonstrative of a key issue relative to the overall development of Web3 in Japan.The project involves Japan’s legacy tech companies such as Fujitsu and Mitsubishi. He goes on to clarify that the majority of Web3 projects in Japan are being led by the existing technology behemoths despite the fact that Japan is seeing the emergence of a Web3-native generation.Suzuki identifies that one of the fundamental aspects of Web3 is that every decentralized autonomous organization (DAO) that’s created is immediately global in nature. Allied with that, most of that 18–25 year old Web3 native generation in Japan want to break through language barriers and communicate on a global basis.That outward looking characteristic is positive but it’s not how venture investment has traditionally worked in Japan. He explains that the conventional approach to investing in start-ups in Japan has been to first look to dominate the Japanese market before going global. The Fracton Ventures founder believes that this is a flawed approach in today’s world and that by the time they’ve gotten to number one in Japan, it’s already too late in trying to achieve that on a global basis.Government responsibilitySuzuki places much of the responsibility in affecting a more appropriate approach on the Japanese Government. “If they focus only on these huge Japanese companies, they will not succeed,” he says. He is also critical of the regulatory approach. Suzuki believes that “the government wants to change the laws and set new regulations at an early date,” and with that, such over-regulation has resulted in crypto entrepreneurs leaving the field. Regulation needs to be set on a more flexible basis so that it can be easily updated and upgraded as the technology develops.Global MindsetHe highlights the importance of having a global mindset and being open to different ideas and perspectives in order to succeed in the Web3 space. The entrepreneur points to that Web3-native demographic in Japan, explaining that their mindset has changed to a more global one as a consequence of dabbling in Web3. The same he believes is necessary on the part of the government if Japan is to become a leader in the tech industry once again.

Binance Headlines List of Japan FSA Warning Letter RecipientsJapan’s Financial Services Agency (FSA) issued a warning letter on Friday stating that several foreign cryptocurrency exchanges have been operating in the country without proper registration, thereby infringing Japan’s fund settlement laws. The regulatory authority specifically named Binance, Bybit, MEXC Global, and Bitget as the entities in question.The FSA indicated that these exchanges need to register with the agency to continue operating in Japan. Failure to comply with the registration requirements would result in enforcement actions by the FSA, which could include the suspension of their operations in the country.©Pexels/David DibertUnregistered digital asset exchangesThe FSA’s warning letter detailed that the cryptocurrency exchanges mentioned had contravened Japan’s fund settlement regulations by engaging in crypto asset exchange operations without proper registration. The regulatory body emphasized that the current list of unregistered traders may not accurately reflect the current state of unregistered businesses in the country.The FSA intends to continue monitoring the market and taking appropriate regulatory measures to protect consumers and the integrity of the financial system. The agency also encouraged all unregistered operators to register with the FSA to avoid any possible enforcement actions.Clamping down on unregistered exchangesThe FSA’s recent action against unregistered cryptocurrency exchanges is in line with the regulatory body’s ongoing efforts to clamp down on non-compliant operators in Japan. In 2020, the FSA introduced new regulations mandating that all crypto exchanges must register with the agency and obtain a license to operate in the country. These regulations were put in place to strengthen consumer protection and enhance the transparency of the cryptocurrency market. By taking these measures, the FSA aims to foster a more stable and secure environment for the burgeoning crypto industry in Japan.The FSA’s warning to Binance is indicative of the growing regulatory scrutiny that the cryptocurrency industry in Japan and other nations is currently facing. Regulators are increasingly concerned about the potential risks associated with unregulated cryptocurrency exchanges, such as fraud, money laundering, and market manipulation. As a result, many regulatory bodies are implementing stricter rules and guidelines to promote transparency, accountability, and consumer protection in the cryptocurrency market.These regulations aim to create a more secure and reliable environment for investors and industry participants. The FSA’s actions against Binance serve as a reminder to all market players that compliance with regulatory requirements is critical for the long-term success of the cryptocurrency industry.Global regulatory variationWhile Japan is taking steps to implement new regulations for the cryptocurrency and Web3 sectors, the country has not been as stringent in its approach as some other major economies, such as the United States. However, this does not mean that regulators in Japan are not actively monitoring the industry and taking appropriate action where necessary.One example of such action is the recent lawsuit filed by the US Commodity Futures Trading Commission against the popular crypto exchange firm, Binance, and its founder, Changpeng Zhao, over regulatory violations. This highlights the fact that regulatory bodies in different parts of the world are taking a more proactive approach to monitoring the cryptocurrency industry.Moreover, the FSA in Japan issued a formal warning letter to Binance in 2021 for operating without the necessary permissions. This is an indication that the regulatory landscape in Japan is evolving, and that crypto exchanges must comply with the relevant regulations to avoid potential legal repercussions. While the severity of regulatory measures may differ across different jurisdictions, the message is clear: compliance is crucial for the long-term viability of the cryptocurrency industry.