OSL Prepares for Fund Launch Following License Approval

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.

In response to the expanding demand for cryptocurrencies in Indonesia, the government has laid down a directive, requiring crypto exchanges operating within the Southeast Asian country to register with the recently inaugurated Commodity Future Exchange (CFX).Photo by Bisma Mahendra on UnsplashMandatory requirementThe CFX was established back in July as the world's first national bourse exclusively dedicated to digital assets. The national exchange has been modeled to replicate exchanges in traditional markets like the NASDAQ, but in this case, focusing entirely on digital assets. Under regulations introduced in 2019 by the Indonesian Commodity Futures Trading Regulatory Agency (Bappebti), crypto exchanges in the country must seek authorization. Even exchanges operating legally since 2014 fall under the category of "prospective crypto exchanges" and must undergo a rigorous process to gain recognition as legitimate entities affiliated with the CFX. Safeguarding investorsThis regulatory initiative aims to create a secure environment for crypto investors while simultaneously serving as a platform for tracking digital asset transactions for taxation purposes. Beyond the regulatory oversight, registering with the CFX also acts as a gateway for the Indonesian government to monitor cryptocurrency transactions for taxation purposes. The authorization process involves registration with self-regulatory organizations (SROs) like the CFX, followed by scrutiny by Bappebti to assess the company's suitability to operate. Only after meeting all requirements can a crypto exchange be issued a crypto exchange license (PFAK). Failure to complete the new procedures and registrations within the specified timeframe, set for Aug. 17, 2024, will result in the inability to operate in Indonesia. Currently, there are 29 prospective crypto exchanges in Indonesia that must obtain authorization to continue their operations. Regulatory oversight change in 2025It is noteworthy that a significant regulatory overhaul in 2025 will shift the oversight of cryptocurrency regulation from Bappebti to Indonesia's Financial Services Authority (OJK). This change could potentially reclassify cryptocurrencies as securities, potentially impacting taxation. While crypto assets are currently subject to Value Added Tax (VAT) and Income Tax (PPh) as commodities, reclassification as securities may lead to a reduction in taxes. In late February, Didid Noordiatmoko, head of Bappebti, announced the nation's intention to launch its state-backed crypto exchange by mid-2023. The exchange will be operated by a private-sector company rather than the government, with private-sector crypto platforms executing trades on the exchange. Crypto adoptionThe surge in demand for cryptocurrencies in Indonesia is evidenced by official data from 2023, indicating that the number of registered crypto traders exceeds that of stock traders. Data published in October outlined that Indonesia has seen a 10.1% year-on-year increase in the number of crypto investors in the country, bringing that figure to 17.79 million citizens. The increase in interest in crypto among Indonesians has not been lost on the country’s politicians as crypto appears to have become an election issue. Gibran Rakabuming Raka, a vice-presidential candidate in the upcoming Indonesian election, expressed the aim to accelerate Indonesia's position as a leader in the digital revolution by cultivating expertise in blockchain and cryptocurrencies. 

Hong Kong Analyzes Web3 Approach of Regional PeersHong Kong’s ambitions in Web3 are on the rise as it strives to establish itself as a global hub for digital assets. The Research Unit of the Legislative Council Secretariat of Hong Kong has recently released a summary of a document titled “Development of Selected Regional Web3 Technologies,” shedding light on the city’s involvement in Web3.According to the report summary which was published on June 14, the Hong Kong government is actively promoting the development and utilization of Web3. In the fiscal budget for 2023–2024, the Financial Secretary announced accelerated efforts to build Hong Kong’s Web3 ecosystem, along with the establishment of a dedicated development task force focused on virtual assets.Photo by Jimmy Chan on PexelsPace of developmentHowever, concerns have emerged about Hong Kong’s comparatively slower pace of development in contrast to other regions. Various regions across the globe, particularly in Asia and the Gulf region, have implemented measures to expedite the progress of Web3 and its associated technologies and applications.To address these concerns, the report suggests that Hong Kong should broaden its focus beyond financial services and virtual assets. Instead, it should actively promote innovation in other areas of Web3 technology, such as blockchain and metaverse technology.Scrutinizing regional Web3 developmentIn response to a request from Councilor Wu Kit Ching, the research group has conducted a study on leading regions in Web3 technology and application development, examining their strategies.The study primarily highlights Japan, Singapore, South Korea, and the United Arab Emirates (UAE) as these regions have demonstrated proactive approaches in developing Web3 technologies, and they have become global or regional innovation hubs. Japan, for instance, has established high-level policy guidance and dedicated offices to coordinate Web3 policies across various government departments.Other regions covered in the study have focused on specific areas of Web3. Singapore and the UAE, for example, are exploring blockchain technology through industry collaborations and the establishment of incubation centers. Meanwhile, South Korea is actively launching metaverse strategies to foster innovation across multiple sectors.The summary also provides an overview of the key characteristics, foundational technologies, and applications of Web3. It outlines recent developments in Web3 within Hong Kong and analyzes the development scenarios of selected regions, including Japan’s comprehensive approach and the application-focused initiatives of other regions.The document emphasizes that Web3 represents a decentralized network that empowers users with greater autonomy and control over their digital lives. While the Hong Kong government has introduced measures to support the development of the Web3 ecosystem, particularly in the virtual asset market and related financial services, concerns persist regarding Hong Kong’s slower progress in other areas of Web3 technology compared to its counterparts in Asia and the Gulf region. These regions are capitalizing on their strengths and exploring broader applications of Web3.Hong Kong’s engagement in Web3 and its ambition to thrive in this domain is becoming more evident with each passing day. The summary of the document sheds light on the Chinese autonomous territory’s efforts, while also highlighting the need to expand its focus and foster innovation in various areas of Web3 technology. By doing so, Hong Kong can position itself as a prominent global center for Web3 and leverage the advantages it offers for digital asset development and beyond.