Suspects emerge in Taiwan in ongoing JPEX scandal fallout

OKX, a global crypto exchange, is understood to be considering carrying out an initial public offering (IPO) in the United States. That’s according to a report published by The Information on June 22. The development indicates changing fortunes for the firm in North America. In February, the company agreed to pay a fine of $84 million and surrender revenues earned through U.S. customers of around $420 million to the U.S. Department of Justice (DoJ). Photo by appshunter.io on Unsplash‘New era for OKX’The DoJ had taken action against the crypto exchange on the basis of allegations of unlicensed money transfers. Having put this matter behind it and in taking advantage of a more positive regulatory approach to the crypto sector in the U.S. by the Trump administration, in April OKX relaunched its service offering in the U.S. The company described the newly launched service as a “new era for OKX in the U.S.” Another consequence of that positive regulatory approach in the U.S. has been a renewed interest from crypto companies in pursuing IPOs. Yueqi Yang, a reporter with The Information, stated on X: “From IPOs to crypto treasury stocks, crypto is booming right now, but the rally is playing out in the stock market, at valuations that even surprised industry insiders.” USDC stablecoin issuer Circle (CRCL) executed its IPO on the New York Stock Exchange (NYSE) on June 5. Circle’s experience is likely to be encouraging for other crypto firms considering going public. Since going public, the company’s stock has surged by more than 675%. Circle raised in excess of $1 billion with an IPO share price of $31. During Monday’s trading, the company’s market cap exceeded that of Coinbase (COIN). The current market environment has encouraged other crypto firms to follow suit. In March, American crypto exchange platform Gemini filed confidentially for an IPO. Bullish has also taken this option, according to reports earlier this month. Kraken, another global crypto exchange platform, has indicated that it intends to pursue an IPO in Q1 2026. OKB token holder fearsNews of OKX’s intentions to go public has led to crypto community discussions surrounding the use of an exchange token as a means of fundraising versus a traditional stock market listing. OKX launched OKB, its native token, in March 2018.  Commentators have pointed out that those who invest in traditional shares will have access to more liquid markets whereas platform token liquidity is oftentimes concentrated on that specific exchange. Some OKB token holders fear that following the IPO, their token will be sidelined or abandoned. OKX has been working towards expanding across various regional markets recently. Last year it launched OKX TR to cater towards the crypto community in Turkey. It also acquired trading licenses in Singapore and the United Arab Emirates (UAE).  It emerged last week that the company had launched its services in Germany and Poland having acquired regulatory approval in both countries.  OKX was first founded in Beijing in 2013, later moving its headquarters to the Seychelles due to regulatory changes in China.

China’s Crypto Crackdown Reveals Capital Control LoopholesChinese authorities have been stepping up their efforts to crack down on cryptocurrency-related crimes, and with that, uncovering how digital currencies are being used to bypass strict capital controls imposed by Beijing.China may be a few years into a crackdown against the use of cryptocurrencies but despite that, their use and particularly their use for illicit purposes continue. That’s according to a report on Wednesday by the South China Morning Post (SCMP).Photo by Christian Lue on UnsplashCombating capital outflowsThe rising trend of capital outflows has prompted Chinese authorities to take action. Two prominent cases illustrate the extent of these illegal activities and the value of assets seized.In Jingmen, a city in Hubei province, police disclosed details of an online gambling case involving digital currencies used to evade regulation. The case has implicated over 50,000 individuals and a turnover of billions of dollars. Although the specific virtual currency was not mentioned, authorities revealed that they had frozen multiple accounts with a combined value of $160 million.Meanwhile, in Shanxi province, police solved a money laundering case linked to 380 million yuan worth of USDT, the US dollar stablecoin issued by Tether. China’s State Administration of Foreign Exchange is responsible for monitoring cross-border capital flows. Accordingly, it has taken steps to curb these illicit activities. Late last month, it fined ten firms in order to maintain order in the forex market.Digital yuan developmentThese recent cryptocurrency cases have exposed loopholes in China’s capital control system. Crypto mining and trading have long been banned by Chinese regulators. As an alternative, China has been actively developing its own central bank digital currency (CBDC), known as the digital yuan or e-CNY. 2023 has seen a raft of measures taken by various regional administrators throughout China to bring about further e-CNY adoption.However, the ban on cryptocurrencies and the launch of the e-CNY have driven many miners and traders underground or to overseas locations such as Hong Kong, which ironically, is vying to become a cryptocurrency hub. The continued depreciation of the yuan against the US dollar has intensified capital outflow pressures.Chinese bonds sell-offInternationally, fund managers have been selling significant amounts of Chinese securities since 2021. That goes against the current regional trend which sees emerging Asian markets experiencing substantial inflows of funds during the same period, according to the Institute of International Finance.That market activity has been in response to Chinese policies and escalating US-China tensions. An Atlantic Council report highlights that international institutional investors have been net sellers of approximately 1 trillion yuan in Chinese bonds since early 2022.China’s efforts to control capital outflows and stabilize the yuan’s value face ongoing challenges, as cryptocurrency-related crimes persist. While the crackdown exposes weaknesses in the country’s capital control system, it also underscores the difficulty authorities will have globally in trying to control digital currency use.

Nomura-Backed Digital Exchange Acquires Trading License in DubaiKomainu, a digital exchange backed by Japanese financial services conglomerate Nomura, has achieved the milestone of acquiring an operational license in Dubai.The occasion marks a significant moment for Komainu’s expansion efforts in the Middle East, highlighting the progress the company has made in terms of regulatory approval. It follows Komainu’s previous success in obtaining its MVP license in November 2022, establishing the company as one of the first entities to receive such authorization from the local regulator.The operational license was granted by Dubai’s Virtual Asset Regulatory Authority (VARA) on Friday, with the firm being added to the regulator’s virtual asset service provider register.Photo by Emma Harrisova on UnsplashEnabling a broader service offeringWith this operational license in hand, Komainu is now equipped to introduce extended institutional staking and collateral management services to clients within Dubai. These services will be facilitated through Komainu Connect, a purpose-built platform tailored to cater to the precise needs of institutional clients.While Komainu is a Jersey-based entity, the company has an active presence in the Dubai market as it has established subsidiary firm Komainu MEA FZE, which is based within the city. This local presence indicates Komainu’s intention to play an active role in the institutional digital asset business in the region.Dubai growth potentialSebastian Widmann, Head of Strategy at Komainu, emphasized the exciting growth prospects that Dubai’s flourishing digital asset ecosystem offers. He noted that the region is currently experiencing an influx of assets driven by the launch of new exchanges.Widmann stated: “Dubai has a vibrant digital asset ecosystem and impressive talent pool, and we are proud to contribute to the growth of this innovative financial hub.” He further emphasized that Komainu’s presence and its favorable regulatory status position the company uniquely as it embarks on the next phase of its business journey.It’s been a good month for Nomura-backed digital asset businesses in Dubai. A few weeks ago, another Nomura-funded company, Laser Digital Middle East FZE, was also successful in acquiring an operating license from VARA.VARA’s approach to crafting regulations has been instrumental in fostering a framework that supports permissible activities and services for customers and investors in Dubai. These regulations are designed to enhance clarity, establish certainty, and mitigate potential market risks. VARA’s overarching objective is to create a model framework that promotes both global economic sustainability and innovation.Bridging market gapFounded in 2018, Komainu’s inception was driven by the need to bridge a gap in the market by delivering secure and compliant custody services for institutional players venturing into digital asset investments.Komainu’s foundation is built upon a strategic joint venture involving prominent entities such as Nomura, CoinShares, and Ledger. It acquired its first client for Komainu Connect, the firm’s regulated settlement and custody system for institutions, in June when it signed up Seychelles-based crypto exchange OKX to the service.Headquartered in Jersey, the Jersey Financial Services Commission (JFSC) and Dubai’s Virtual Asset Regulatory Authority (VARA) now provide regulatory governance where Komainu’s activities are concerned.