Remitano Struck by $2.7M Alleged Hack

Backpack crypto wallet secures VASP license for crypto exchange in DubaiThe Dubai Virtual Assets Regulatory Authority (VARA) recently granted a Virtual Asset Service Provider (VASP) license to the Backpack crypto wallet project. This development has paved the way for the launch of Backpack Exchange, a crypto trading platform.Details of the licensing approval and exchange launch were provided via a press release published by Backpack on Tuesday. The VASP license obtained by the fledgling startup is specific to crypto exchange services within the Dubai jurisdiction. Although it restricts Backpack from offering other virtual asset products and services, the company is embracing the opportunity via the newly launched exchange.Photo by Wael Hneini on UnsplashBackpack ExchangeThe new exchange, Backpack Exchange, incorporates cutting-edge technologies such as zero-knowledge (ZK) proof-of-reserves, multi-party computation (MPC) for custody and low-latency order execution, among other features. These technologies are poised to enhance the security, privacy and efficiency of the exchange in an effort to set it apart in the competitive crypto market.By all accounts, this will not be the last licensing announcement from Backpack. Over the past five months, Backpack Exchange has been working to secure operational licenses across multiple jurisdictions worldwide. This global expansion showcases the company’s interest in taking its product offering in the form of a secure and transparent trading experience further afield.Fiat-to-dApp bridgeWhile the wallet currently operates without specific regulatory oversight, it serves as a bridge for users to transition seamlessly from fiat to on-chain applications. Armani Ferrante, CEO and Co-Founder of Backpack, expressed his ambition to bring greater transparency to the crypto exchange sphere. He emphasized the importance of trust and verification in a sector often shrouded in opacity.Ferrante believes that leveraging cryptographic techniques such as zk-proofs, MPC, and state machine replication can elevate industry standards. Backpack Exchange aims to set a precedent by providing users with the tools and knowledge to verify transactions, ultimately fostering trust and confidence within the crypto community.Dubai’s VARA regulator has been actively enhancing its crypto-friendly regulatory environment. In February 2023, the regulator issued guidelines for VASPs operating within the emirate, emphasizing the importance of adhering to marketing, advertising, and promotion regulations. Violators may face fines ranging from 20,000 UAE dirhams ($5,500) to 200,000 dirhams, with repeat offenders potentially incurring fines as high as 500,000 dirhams.Solana ecosystem projectBackpack is very much a Solana-centric project. As a lead developer of the layer one blockchain, Ferrante is bullish in terms of future development on the Solana blockchain. His Mad Lads NFT project is the top-rated collection by market cap within the Solana ecosystem.In a podcast earlier this year, he outlined that the prospects for the blockchain are bright going forward. Backpack was first established by crypto infrastructure firm Coral, the creator of Anchor, one of the most popular smart contract developer frameworks for Solana.For existing Backpack and Mad Lads users (Mad Lads is a collection of 9,966 NFTs created by Ferrante), exciting prospects are on the horizon via the new exchange. Initial access to Backpack Exchange will be granted starting in November, with full public availability anticipated in Q1 2024. During this interim period, Backpack plans to introduce various trading functionalities, including derivatives, margin trading and cross-collateralization.

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.

Bill Winters, the American banker who heads the British financial group Standard Chartered, appeared at the Hong Kong FinTech Week conference earlier this week, where he predicted a future in which cash will give way to blockchain-based systems for everyday transactions. According to Cointelegraph, Winters’ view aligns with that of Hong Kong regulators. At the same time, he stressed the importance of continued experimentation, noting that it remains uncertain how this transformation will ultimately take shape. Winters also commended Hong Kong’s leadership in exploring the potential of digital finance. Tech-driven finance has certainly been one of the key initiatives Hong Kong has been exploring. Recently, the Hong Kong Monetary Authority (HKMA) released its e-HKD Pilot Programme Phase 2 Report, which showed public support for tokenized deposits.Photo by Shubham Dhage on UnsplashReal-world assets gain ground on the blockchainOn-chain data also underscores the rapid growth of the tokenization sector. According to RWA.xyz, the total value of real-world assets (RWAs) deployed on-chain has climbed to $35.63 billion, up 7.8% from a month ago. A study by Ripple and Boston Consulting Group (BCG) estimates that tokenized assets could be worth $19 trillion by 2033, about 530 times their current value. Among RWA assets, the BlackRock USD Institutional Digital Liquidity (BUIDL) Fund, Tether Gold (XAUT), and Paxos Gold (PAXG) currently lead the market in terms of value. Over the past 30 days, BlackRock’s BUIDL Fund slipped 0.06%, while the two tokenized gold products, XAUT and PAXG, jumped 46.65% and 14.19%, respectively. These gains mirror gold’s bullish run in October, when its price surpassed $4,000 per ounce for the first time on Oct. 7. The momentum has since eased slightly, with gold now trading at around $3,969.55 per ounce. Tokenization brings 24/7 markets and P2P flexibilityIndustry experts point to the convenience of tokenization as a key advantage. Speaking to Yahoo Finance, Will Peck, head of digital assets at WisdomTree, explained that tokenized gold allows for around-the-clock trading and direct peer-to-peer (P2P) transactions. He added that gold and Bitcoin act as complementary stores of value, both serving as deflationary assets. Ian Kane, CEO of fintech company Firepan, said tokenized gold appeals to investors as it enables them to retain ownership, leverage their holdings for loans, and generate extra yield, while preserving their principal against debasement or devaluation. These views are not new. Earlier this month, Robinhood Markets CEO Vlad Tenev described tokenization as “a freight train” that “can’t be stopped,” predicting it will eventually transform the global financial system. Similarly, in his annual letter to investors in April, BlackRock CEO Larry Fink said the tokenization of assets could fundamentally reshape the way people invest. By digitizing ownership, tokenized venture capital funds could move beyond their closed circles, giving ordinary investors a stake in early-stage innovation and greater control over their capital. Venture capital faces hurdles in tokenization pushWhile tokenization promises greater accessibility and liquidity, not all market segments are ready for it. According to TheStreet, tokenized venture capital (VC) funds could open a traditionally closed market to more investors, but the process is more complex than it appears. In an interview with TheStreet, Elena Obukhova, founder of Supermoon Ventures, said that liquidity, not technology, is the main obstacle. Unlike tokenized company shares that can be traded freely on public markets, VC funds invest in private startups whose value may take years to materialize through an exit or acquisition. Allowing such funds to trade freely could increase volatility and pressure founders, as interim valuations might distort perceptions and weaken confidence in early-stage ventures. Still, the promise of tokenized venture finance remains within reach. Firms are testing models that limit trading periods, protect investor data, and refine valuation methods to better reflect the illiquid nature of startup investments. Since liquidity events such as initial public offering (IPOs) or acquisitions typically occur only every one to two years for early-stage startups, the path forward will depend on creating systems that can maintain stable and accurate valuations in the interim. Tokenization is rapidly emerging as a transformative force in the financial world, offering greater accessibility, liquidity, and efficiency. As more assets, from gold to venture capital, make their way onto the blockchain, the potential to reshape investment and trading markets grows. While challenges remain, particularly around liquidity and valuation in sectors like venture capital, the continued advancements in tokenization demonstrate its key role in the future of finance.