Japan’s financial giants gear up for crypto exchange push

Korea Exchange sets the stage for security token tradingStarting next year, South Koreans may have the opportunity to trade security tokens, as the Korea Exchange (KRX), the sole securities exchange operator in the country, has officially begun preparations to establish a security token market. The Busan Digital Asset Exchange (BDX), slated for launch next year, is expected to play a pivotal role in spearheading the growth and development of this emerging security token market.Photo by Tierra Mallorca on UnsplashSeeking approval from financial regulatorsAs reported by local news outlet Busan Ilbo, KRX applied to the FSC last month for registration as an innovative financial service under the financial regulatory sandbox scheme. On Nov. 19, the FSC approved the creation of pilot markets for investment contract securities and non-cash trust beneficial certificates. KRX’s recent initiative is a follow-up to this development. The financial regulator is set to make a final decision after holding a main committee meeting to review KRX’s application.Investment contract securities and non-cash trust beneficial certificates represent two distinct types of security tokens. Investment contract securities provide a means for fractional investments in real-world assets (RWAs). This can include a diverse range of assets such as artworks, music copyrights, beef and carbon credits, allowing investors to own a portion of these assets. On the other hand, non-cash trust beneficial certificates function as secondary investment instruments. These certificates enable individuals to invest in financial products that themselves have invested in security tokens, offering an indirect pathway to participate in the security token market.Fractional investments on the horizonVarious industries are poised to benefit from the emerging digital market, especially platforms focused on fractional investment in artworks. Companies like Yeolmae Company, Art Together and Seoul Auction Blue are keen on this opportunity and have applied to the FSS for permission to register security tokens. Upon receiving regulatory approval, these platforms plan to accept subscription requests, enabling investors to participate in the art market in a more accessible way.The development of security token markets is expected to positively impact BDX, which is currently seeking an operator. Initially, when BDX’s operation plan was unveiled in September, it excluded security tokens due to regulatory constraints. However, with KRX now involved, it’s more probable that the Busan exchange will feature security tokens as major trading assets. Experts believe the success of these token exchanges will largely depend on the quality and appeal of the underlying assets.A local securities industry official emphasized the significant role of the security token market in enhancing the stature of Busan as a blockchain hub. The growth of this market is seen as pivotal in boosting the value and utility of BDX. The official noted that BDX’s appeal to investors would increase if it offered a diverse range of underlying assets or unique security tokens. This development could mark a significant turning point for Busan in the blockchain industry.

Galaxia Moneytree partners with Charzin to integrate security tokens into EV charging systemsKorean financial platform services provider Galaxia Moneytree announced on Tuesday (local time) that it has signed a memorandum of understanding (MOU) with Charzin, a company that specializes in developing infrastructure for charging electric vehicles (EVs), to design a security token offering (STO) platform that issues security tokens for optimizing the process of EV charging. This includes securing installation sites and facilities for EV charging stations.Photo by Andrew Roberts on UnsplashMerging blockchain and transportationHeadquartered in Daegu, Charzin is notable for its app EVZ, which uses a blockchain-based sharing module to connect EV drivers and EV charger owners for faster charging and optimized revenue acquisition.Galaxia Moneytree will be responsible for establishing and operating the STO platform, while Charzin will handle business development, support for the launch of security token products and construction of EV charging facilities.The signing ceremony for the MOU took place at Galaxia Moneytree’s headquarters in Seoul on Monday with Galaxia Moneytree CEO Shin Dong-hoon and Charzin CEO Choi Young-seok in attendance. The two companies also discussed plans to launch other products that combine finance and EV charging infrastructure.“In addition to our ongoing efforts, we plan to design STO products for various underlying assets, such as renewable energy and aviation assets,” Galaxia Moneytree said. The company recently formed an aviation asset tokenization consortium in September.Ongoing partnershipsMeanwhile, Charzin recently announced its partnership with Hi Investment and Securities to venture into the security token business. The firms plan to raise funds for developing EV charging infrastructure by issuing security tokens and subsequently share the profits from running such projects.

Bitkub Addresses Market Conditions Thru Job CutsBitkub Capital Group, the parent company of Thailand’s largest digital asset exchange Bitkub Online, has made adjustments to its workforce and employee benefits in an effort to manage costs during challenging economic conditions.Photo by Braden Jarvis on Unsplash5.5% staff reductionAccording to a statement released on Wednesday, approximately 5.5% of personnel within the Bitkub Capital Group have been let go, while around 2% of staff at Bitkub Online were also affected.Contrary to reports in local media suggesting that half of the company’s employees were terminated in late June, Bitkub Capital Group clarified that the reduction in workforce was relatively small compared to the overall number of employees in the group.Change in employee benefitsThe company did not provide specific details about the changes in employee benefits, only stating that one perk had been removed. The decision to implement these measures stems from the current economic downturn and the need to manage costs effectively, Bitkub explained.Bitkub Capital recorded a net profit of 1.3 billion baht ($37.49 million) in 2022, marking the second consecutive year of profitability for the company. However, net profit declined by 39% compared to the previous year, falling from 2.1 billion baht in 2021. Expenses also surged from 117 million baht in 2021 to 394 million baht in 2022.Bitkub Capital Group encompasses various entities in addition to the crypto exchange, including Bitkub Ventures (the venture capital arm), Bitkub Labs (also known as Bitkub Academy, the education arm), Bitkub Blockchain Technology (a consulting company focused on blockchain), and Bitkub Infinity (a portfolio management service provider).Bitkub Online, the crypto exchange unit, reported a profit of 341 million baht for the financial year ending on December 31, 2022, representing an 86% decline compared to the previous year. Total revenues for 2022 amounted to 2.8 billion baht, which marked a significant decrease of 48% compared to its peak performance in 2021 when it generated 5.5 billion baht in revenue.In a separate development, Asphere International, a game publisher listed on the Bangkok Stock Exchange, recently acquired a 9.22% stake in Bitkub Online for 600 million baht, valuing the startup at 6.5 billion baht.Broader regional trendThe downsizing at Bitkub reflects a broader trend among technology companies in the region. In June, aCommerce, a local e-commerce enabler, laid off at least 20 employees citing similar economic challenges. The same month, Grab, the Singapore-based ride-hailing and food delivery giant, announced a significant round of layoffs, with 1,000 employees, including the Thailand team, being let go.Bitkub’s decision to adjust its workforce and streamline employee benefits is a response to the economic headwinds it faces. It’s not the company’s first setback. Last year, Thailand’s Securities and Exchange Commission (SEC) penalized the firm’s CTO, Samret Wajanasathain, on the basis of insider trading.The cyclical nature of the digital asset exchange business means that Bitkub can seek to weather this storm and benefit from the upside once market conditions inevitably become more favorable in the not too distant future.