Hong Kong and Saudi Arabia Collaborate on Tokenization and Payments

Animoca Brands’ Japanese market expansion via strategic partnershipAnimoca Brands Japan, in collaboration with Animoca’s subsidiary KLKTN, a digital experience label, has unveiled a strategic partnership with Cool Cats Group, marking a significant move into the Japanese anime market within the Web3 space.Photo by Yu Kato on UnsplashConquering the Japanese anime marketAs part of this strategic venture which was announced on Tuesday, Animoca Brands Japan has acquired equity shares in Cool Cats Group. Cool Cats is a U.S.-headquartered global character brand. It entails Cool Cats and Cool Pets NFT collections, notable for their distinctive and colorful cat designs.In addition to this, Animoca’s digital experience label, KLKTN, has acquired NFTs from all three of Cool Cats’ collections on the secondary market. Notably, this NFT purchase took place through San FranTokyo, KLKTN’s virtual “decentralized city,” which is known for its focus on licensed anime and Web3 intellectual property.Daisuke Iwase, CEO of Animoca Brands Japan, highlighted that the partnership goes beyond business growth. According to Iwase, it is about cultural exchange, understanding and delving into what makes Japan’s digital and artistic realm globally appealing. He emphasized their commitment to creating more opportunities for the Cool Cats IP’s growth through Animoca Brands Japan and San FranTokyo.Accessing Web3 intellectual propertyRobby Yung, CEO of Animoca Brands, expressed his enthusiasm for the partnership, telling The Block that it revolves around building Web3 intellectual property. He emphasized the company’s excitement about collaborating with an iconic Web3 IP holder like Cool Cats to explore the potential of Web3 products and traditional Japanese media products, including manga, to engage the community.The partnership also introduced several strategic initiatives that are set to roll out. One of the key initiatives is the creation of a “Cool Cats Manga,” which will blend the world of Cool Cats with Japan’s renowned manga tradition. This manga will be crafted by a Japanese manga artist, promising a unique fusion of creative elements.Japanese Cool Cats brand expansionAnother significant aspect of the partnership involves expanding the Cool Cats brand within Japan. Animoca Japan and San FranTokyo will work collaboratively to promote the Cool Cats IP through various channels. They are also committed to establishing new connections for Cool Cats with prominent organizations in the Japanese entertainment and intellectual property sectors, enhancing the brand’s presence in the country.The narrative of the Cool Cats IP will be seamlessly integrated into the virtual city of San FranTokyo. This initiative will encompass interactive e-figurine drops and align with the marketing efforts of other iconic Japanese IPs, creating a vibrant digital ecosystem within the city.David Taing, Co-Chief Operating Officer of KLKTN, expressed their dedication to Japanese and Web3 IP, emphasizing the importance of forging a path forward in the Web3 space. They are committed to bringing together diverse worlds, styles, ideas, industries and technology to drive collaboration to new heights, shaping the future of web3.The strategic partnership between Animoca Brands Japan, KLKTN and Cool Cats Group represents a significant step toward embracing Web3 in the Japanese anime market, not just in terms of focusing on business growth but also in aiming to bridge cultures, bringing together the rich traditions of Japanese manga and the innovation of Web3.

Japan Set to Tighten Crypto AML RulesJapan is working on tightening anti-money laundering (AML) rules relative to digital assets shortly. That’s according to a report by local media outlet Kyodo News.The stricter enforcement measures will take effect from June 1. The objective is to include the tracing of cryptocurrency asset transactions into the legal framework relative to AML, and in that way, bringing the application of AML in Japan into line with global standards.Photo by Louie Nicolo Nimor on UnsplashTravel ruleIn December of last year, the Financial Action Task Force (FATF), a global money laundering and terrorist financing watchdog based in Paris, France, deemed that the approach taken to crypto-related AML in Japan fell short of international requirements and best practice.Specifically, it’s the FATF’s “travel rule” that the Japanese are about to implement. Otherwise known as FATF Recommendation 16, the travel rule is a set of guidelines devised to prevent both terrorist financing and money laundering.The measure puts an onus on all crypto companies to screen all crypto transactions that exceed the value of $1,000 or a variance of this amount based on implementation by each FATF member state. As an example, in the United States, the FATF travel rule is being implemented with transaction monitoring being applied on transactions to the value of $3,000 and above.Once identified, the crypto firm must record details of the transaction and communicate that information, including both sender and recipient data, to the authorities. That would involve the sender and receiver’s legal names, their account numbers, and addresses. Relevant transaction activity includes exchanges between one or more forms of digital currency and the transfer of virtual assets.G7 alignmentThe move follows a decision taken at a Japanese cabinet meeting on Tuesday, as a direct response to FATFs recommendations. Following discussions earlier this month, the intergovernmental political forum of the G7 group of countries indicated its support for the FATF’s call for the establishment of the travel rule as a global standard. Japan is currently leading the group through its G7 presidency and likely wants to align with the views of its international peers.The country had been moving towards travel rule implementation in the past but in a less decisive way. Two years ago, Japan’s Financial Services Agency (FSA) requested virtual asset service providers (VASPs) to implement the travel rule. In a self-regulatory approach in 2022, the country’s Virtual Currency Exchange Association issued a recommendation for members to apply the rule.Those approaches lacked teeth, leading to a cabinet decision to amend existing legislation late last year and this more recent move to apply and enforce the rule.Regulatory frameworkWhile Japan may not be top of the class in terms of AML regulation relative to crypto, it is a forerunner in terms of crypto regulation generally. It was the first country in the world to suffer a serious crypto-related failure when the Mt.Gox cryptocurrency exchange collapsed in 2014.The fall-out from that collapse led to the Japanese introducing more stringent regulations although it took until 2017 to get them implemented. As a consequence, when the next major collapse occurred, the fall of FTX in November 2022, the Japanese have fared much better than investors located elsewhere. Regulation meant that a separate Japanese entity, FTX Japan, was established. It had to adhere to stricter conditions, meaning that FTX Japan customers have been allowed to withdraw their funds since February while their international counterparts must undergo a much longer process to recover their funds.

The Russian authorities are in the process of bringing in a national registry for crypto mining equipment, with registration to be a mandatory requirement for all operators. That’s according to a report published by Russia’s state-owned news agency, Tass, on Feb. 3. The registry is being established by the country’s Ministry of Energy, with Yevgeny Grabchak, deputy minister of energy, heading up the project.Photo by Egor Filin on UnsplashThe measure is being introduced as part of a raft of amendments to existing mining regulations. The objective is to improve oversight relative to crypto mining activity within the Russian Federation.  Unauthorized mining has been a concern for the Russian authorities for some time. According to the TASS report on this development, the registry would make mining without equipment registration “impossible.” Late last year, a Russian government commission moved to ban crypto mining in specific regions of the country. Management of the power grid was understood to be the main motivating force. Crypto mining activity had caused power shortages in some areas.  A seasonal ban was implemented, running from December to mid-March, with the measure to be repeated each year until 2031. In August of last year, Russian President Vladimir Putin had signed into law legislation that recognized the legitimacy of crypto mining in Russia.  Illegal mining, particularly within these restricted regions, continues to be a concern for the authorities, prompting this latest measure. Additionally, the authorities plan on establishing clear criteria in order to define crypto mining and deal with gaps in current legislation which may be enabling illegal and unregistered operators to carry out such mining activity. According to a report last month by local news media outlet Prime, Russia saw a surge in demand for Bitcoin mining equipment in Q4 2024. Crypto equipment demand increased threefold in comparison with the same quarter in 2023. Addressing the need for a crypto equipment registry, the Russian government stated: “It is important to adapt the law ‘On Mining’ to the current situation, in particular, based on practical experience, to formulate clearer criteria for classifying activities specifically as the production of digital currency.” While efforts are being made to get a firmer grasp on unauthorized mining in areas that are being impacted by power shortages, work is also being done to use crypto mining as a mechanism to fully exploit surplus energy.  Last month, it was revealed that Russian state-owned power company Rosseti is evaluating Bitcoin mining as a means through which surplus energy can be utilized in low-demand regions. In a separate development, the TASS news agency also reported on Feb. 3 that crypto miners are now in a position to report their earnings via online accounts with Russia’s Federal Taxation Service (FNS). The TASS report stated: “A new function has appeared in the personal accounts of taxpayers. With the help of the online service, users can now send information about receiving digital currency to the tax authority.” The feature appears once the registered user submits an electronic signature.