Banking Difficulties Remain in Hong Kong for Crypto Start-Ups

Recent developments relative to governance of the CRO token, a native token belonging to the Cronos blockchain, have proven controversial, with many in the community unhappy with the actions of Singapore-headquartered Crypto.com.Photo by Markus Winkler on UnsplashProposal controversyThe controversy surrounds a proposal put forward by Crypto.com, which originally developed the Cronos blockchain in 2021, to mint 70 billion CRO tokens. The move would effectively roll back a CRO token burn that took place in 2021. The governance process applicable to the proposal meant that CRO token holders could vote on the proposal between March 2 and March 16. For the majority of that voting period, the outcome appeared to be uncertain. The “yes” vote had a narrow lead, but it would have been insufficient to reach the required 33.4% quorum of eligible votes. Exceeding the quorumHowever, at 14:00 UTC on Sunday, a last-minute influx of 3.35 billion tokens tipped the balance firmly in favor of the proposal while well exceeding the minimum turnout as 70.18% of eligible votes were cast. 61.18% voted in favor, with 17.61% against. Many CRO token holders who opposed the proposal are aggrieved at the manner in which this late voting surge came about. It’s understood that these last-minute votes came from blockchain validators controlled by Crypto.com. Crypto.com is understood to hold in the region of 80% of the voting power. In exercising that voting clout, many CRO holders feel that it has undermined the will of the community. Some commentators believe that increasing the token supply will result in a loss of trust in the project, damaging investor confidence going forward. Earlier this month, Crypto.com CEO Kris Marszalek responded to community pushback against the proposal. Marszalek suggested that the proposal ties in with an overall strategy for the success of the Cronos blockchain and its CRO token in the long term.  He pointed to four items that are relevant in achieving success for an altcoin like CRO. These included finding product-market fit, the need to redeploy free cashflows, successfully launching exchange-traded funds (ETFs) and participating in reserve-building initiatives.  ‘Free to vote and free to sell’The strategy relies upon building demand in order to achieve longer-term success. On X, Marszalek wrote: “People who do not agree that this is the right approach are free to vote & free to sell. We will stay laser focused on building towards new ATHs [all-time-highs].” In another X post on March 19, the Crypto.com CEO outlined that the company generated $1.5 billion in revenue in 2024 while servicing the needs of 140 million users on the platform. The company spent $700 million on branding, user acquisition and user incentives in 2024. Its operations turned a net profit of $300 million.  Crypto.com has also made further headway on the compliance front over the course of the past week. The company received licensing approval in Dubai to offer derivatives from the Virtual Assets Regulatory Authority (VARA). On March 17 the company announced that it had successfully achieved Virtual Asset Service Provider (VASP) registration with the Argentine regulator.

Bithumb celebrates 10th anniversary with a commitment to changeBithumb, South Korea’s major fiat-to-cryptocurrency exchange, celebrated its 10th anniversary on Wednesday (local time), as per a report by local news agency Newsis.Photo by Adi Goldstein on UnsplashFoundation for the marginalizedTo celebrate this occasion, the platform has set up a foundation with a budget of KRW 10 billion (approximately $7.6 million). The foundation is dedicated to addressing the challenges faced by marginalized individuals in the community.Bithumb has also introduced a new slogan, “Deep change for customers,” reflecting the exchange’s commitment to transformation, its top core value.Demonstrating such efforts, the platform has implemented a zero-trading fee policy for all supported cryptocurrencies since October. This policy will remain in effect until further notice. In response to this competitive move, other players in the market followed suit. Later in the same month, Korbit introduced fee-free trading for all types of tokens, and Gopax removed trading fees for four major cryptocurrencies: BTC, ETH, XRP and USDC.IPO planned in 2025Furthermore, Bithumb is striving to go public on the Korean stock market, a move partly driven by criticisms of inadequate governance transparency. The virtual asset service provider aims to conduct an initial public offering (IPO) in the second half of 2025. Through this IPO, Bithumb intends to demonstrate its corporate transparency and strengthen its position as a trustworthy exchange.Identifying and fostering young entrepreneurs is another initiative Bithumb is spearheading. The crypto exchange is processing applications from aspiring business owners for its support program. These applicants will be assessed based on their creativity and the feasibility of their business models without any restriction on the type of business area they are involved in. For this purpose, Bithumb has allocated KRW 30 billion to support startups that have been operational for less than three years.User engagement eventsA customer engagement event called the “10 Bitcoin 1/N challenge” is also underway for Bithumb users. Participants in this event will have the opportunity to equally share a total of 10 BTC. To join, customers need to send the message “Happy 10th birthday, Bithumb” to Bithumb’s KakaoTalk channel. Upon successfully sending this message, customers will receive a coupon code. After receiving a coupon code, they must apply it on the Bithumb app. The distribution of rewards is set for Dec. 11.In addition, Bithumb is set to airdrop cryptocurrencies worth up to KRW 1 million to users who have been inactive for an extended period. To participate, these users simply need to log into the Bithumb app and enter the MISS-YOU coupon code. This promotional event will last from Dec. 6 to 12, with the airdrop occurring on Dec. 18.Lee Jae-won, CEO of Bithumb, remarked that Bithumb’s 10-year journey mirrors the rapid growth and evolution of the cryptocurrency market. He emphasized that the exchange believes growth stems from embracing new challenges and transformative efforts. Lee added that Bithumb is determined to implement authentic changes to better serve its customers.

Kuwait Implements Full Ban on Crypto ActivitiesIn a significant move to combat money laundering and terrorist financing, Kuwait has taken a decisive step by announcing a complete ban on all crypto-related activities.Photo by Jan Dommerholt on Unsplash“No legal status”According to a circular issued by the Capital Markets Authority (CMA), Kuwait’s top financial regulator, earlier this week, cryptocurrencies are deemed to have “no legal status” and lack the support of any government or any asset. As a result, the prices of these digital assets are vulnerable to speculative swings, exposing investors to potential substantial losses. Consequently, the CMA asserts that engaging in crypto activities can lead to adverse consequences and financial risks for individuals and businesses alike.The ban extends beyond trading and mining. It also prohibits public companies from offering any cryptocurrency-related services. The CMA emphasized that it has never granted approval for crypto services in the past, and this outright ban reinforces the country’s commitment to curbing illicit financial activities facilitated by cryptocurrencies.Aligning with FATFThe decision comes in the wake of Kuwait’s determination to align with the Financial Action Task Force’s (FATF) global requirements for handling crypto assets. The country is attempting to demonstrate its compliance with international anti-money laundering guidelines by clamping down on digital assets.Kuwait’s approach towards cryptocurrencies diverges significantly from other Gulf states that have embraced the nascent industry with more openness. The likes of the United Arab Emirates (UAE), Saudi Arabia, and Bahrain have previously engaged with crypto assets in various ways.For example, Bahrain granted approval to global crypto exchange platform Binance to provide digital asset services within the country. It’s keen to embrace digital assets as it pivots away from an oil-based economy. The Kingdom recently welcomed plans by Singapore-based private equity firm Whampoa Group to establish a crypto-friendly digital bank there.Meanwhile, Saudi Arabia’s sovereign wealth fund has also invested in several US-based venture capital funds which are focused on crypto and blockchain technologies.Dubai, in particular, has been actively working on establishing a regulatory framework for digital assets, aiming to position itself as a digital hub in the region. The UAE as a whole has recognized crypto assets as securities for several years, fostering a favorable environment for crypto businesses.CriticismNews of the ban also provoked criticism, including commentary from Alex Gladstein, Chief Strategy Officer with the Human Rights Foundation. Gladstein, taking to Twitter, stated: “ Not surprising. I expect all authoritarian regimes (especially gulf tyrannies like the UAE and Saudi Arabia) to follow in Kuwait’s footsteps and eventually pass severe restrictions on citizen use of Bitcoin.” While the UAE trends in the opposite direction, Gladstein is not optimistic about the free use of decentralized cryptocurrencies in the UAE over the longer term.As the global crypto landscape continues to evolve, each country in the Gulf region is adopting unique approaches to address the opportunities and challenges posed by digital assets. While there may be opposition to the technology, decentralized digital assets will benefit from jurisdictional arbitrage in efforts to get this innovation rolled out for the benefit of ordinary people around the world.