ZkLink Snags $10M Funding Ahead of Mainnet Launch

Switzerland and Singapore-based crypto bank Sygnum has successfully closed a funding round, securing over $40 million in capital, with plans to expand its service offering in Asia. On the brink of unicorn statusThe funding round was achieved based upon a post-money valuation of $900 million, with Sygnum edging closer to unicorn status. Led by global asset management group Azimut Holdings, the funding surpassed the initial target of $35 million, reinforcing Sygnum's position in the rapidly evolving digital assets space. In a press release, Mathias Imbach, Sygnum's co-founder and CEO, expressed excitement about the successful funding round, highlighting the company's commitment to building trust through regulation and good governance. Imbach stated:”Our core thesis has always been that Future has Heritage, and our strategy to build trust via regulation and good governance has guided us throughout all market cycles. ” Gerald Goh, Sygnum's co-founder and CEO of its Singapore operations, emphasized the importance of staying ahead as clients' needs and activities grow more sophisticated. The fresh funds will enable Sygnum to continuously upgrade and enhance its product and service offerings in response to evolving market demands.Photo by Towfiqu barbhuiya on UnsplashAsian focusThe funds raised in this round will be instrumental in expanding Sygnum's geographical reach into new markets in 2024, within the Asia-Pacific (APAC) region as well as within the European Union. Sygnum has already made in-roads in Asia. Having started out in Switzerland, in 2019 the company set up a base in Singapore, establishing Sygnum Singapore and obtained a capital markets license from the Monetary Authority of Singapore (MAS). Last June, the firm achieved in-principle approval for a Major Payment Institution (MPI) license from MAS. It fulfilled the regulator’s requirements to bring about full approval in October. Goh told Bloomberg that the company envisages achieving growth in Asia and Europe through acquisition.  Developing fully regulated productsThis latest capital injection has also been earmarked to accelerate the development of fully regulated products, including the bank-to-bank platform that currently powers crypto offerings for more than 15 banks and financial institutions worldwide. Sygnum's assets under management have surged to $4 billion, with a client base exceeding 1,700 from over 60 countries. At the end of 2023, the firm reported an annualized revenue run rate (ARRR) exceeding $100 million, marking a significant milestone for the company's financial health and positive cash flow. Sygnum's expansion efforts include collaborations with key players in the industry. In November, the bank furthered its partnership with the Singapore arm of 174-year-old private bank Bordier & Cie, strengthening their initial collaboration that started in Geneva in 2021. Giorgio Medda, CEO of Azimut Holding, highlighted the strategic partnership between Azimut and Sygnum since 2021, emphasizing their joint development of the first tokenization of a private credit portfolio in Europe. Despite the recent challenges in the crypto industry, Sygnum remains optimistic about the future. The broader industry is witnessing a resurgence, with investors and market participants seeking partnerships with trusted and well-managed financial institutions. This sentiment aligns with Sygnum's vision to provide fully regulated solutions and support investors as they increase exposure to the asset class. 

In a bid to expand the utility of USDC (USD Coin) in Japan, Coincheck, a cryptocurrency trading platform based in Tokyo, has unveiled a strategic collaboration with Circle Internet Financial, the global fintech firm and the issuer of the USDC stablecoin. Broadening USDC accessibilityThe partnership, announced on Feb. 27, signals Coincheck's proactive stance towards broadening accessibility to the USD-pegged coin within Japan's cryptocurrency landscape. This move is particularly noteworthy given Coincheck's stature as a subsidiary of Monex Group, a major securities firm that acquired a controlling interest in Canadian crypto asset management firm 3iQ in December of last year. Coincheck, established in 2014 and boasting a user base of 1.91 million verified accounts as of January 2024, is poised to play a pivotal role in driving USDC adoption within Japan.Photo by Takashi Miyazaki on UnsplashRegulatory hurdlesRegulatory hurdles remain significant for the widespread adoption of USD-backed digital assets within the east Asian country. Presently, major Japanese cryptocurrency exchanges have refrained from listing such coins, awaiting regulatory approval under the jurisdiction of the Japanese Payment Services Act, which mandates obtaining "Electronic Payment Instrument Services" registration. Despite these challenges, fiat-pegged coins like USDC and USDT continue to enjoy substantial popularity across Asia, reflecting a burgeoning interest in stablecoins as reliable vehicles for value transfer and storage. Oki Matsumoto, managing director and chairman of Coincheck, emphasized the strategic significance of the partnership in catalyzing growth within Japan's crypto ecosystem and the broader blockchain industry. He expressed optimism regarding the collaborative efforts between Coincheck and Circle in advancing the adoption of digital assets in the Japanese market. Circle’s ongoing focus on JapanCircle's engagement with Japan is not unprecedented, as the company had previously entered into a memorandum of understanding (MOU) with SBI Holdings, a formidable player in Japan's financial sector. This partnership aimed to spearhead digital currency innovation, streamline cross-border transactions and enhance liquidity in the digital asset market. Last month Circle identified the Asia-Pacific (APAC) region as being ripe for stablecoin adoption. It outlined that it was particularly encouraged by the ongoing development of forward-looking regulatory frameworks in Asian centers like Singapore, Hong Kong and Japan. In a parallel development, Circle recently announced a partnership with Overdare, a joint venture which was originally formed in September between gaming firms Krafton and Naver Z, poised to redefine the landscape of mobile user-generated content (UGC) gaming. This collaboration seeks to empower game content creators by integrating Circle's user-controlled Programmable Wallets, enabling them to seamlessly receive USDC payouts for their creative endeavors. Circle's foray into the creator economy through its collaboration with Overdare demonstrates another strategy that the company is employing to bring about adoption and gain traction in the market, pivoting towards Web3 innovation and its emphasis on development within the APAC region. With USDC boasting a market capitalization of approximately $27 billion and circulating supply exceeding $24 billion, as reported in its December 2023 reserve attestation, Circle's strategic partnerships with Coincheck and Overdare herald the latest efforts to trigger adoption within the Japanese and broader APAC region’s cryptocurrency and gaming spheres.   

Hong Kong Moves to Enable Retail Crypto TradeHong Kong’s Securities and Futures Commission (SFC) has moved to enable retail participation in crypto trading within the Chinese autonomous territory.The SFC has arrived at that determination, according to a report it published on Tuesday. The report, titled “Consultation Conclusions on the Proposed Regulatory Requirements for Virtual Asset Trading Platform Operators Licensed by the SFC (Note 1),” provides an overview of the nature of feedback the Commission received as part of its consultation process relative to virtual asset trading.Photo by Ben Cheung on PexelsRetail investor protectionIn the press release which accompanied the report, the Commission outlined that “a significant majority of respondents agreed to our proposal to allow licensed trading platform operators to serve retail investors.” On that basis, the SFC is moving forward in enabling retail trading of crypto assets through licensed virtual asset trading platforms effective June 1, and it’s setting out to do so while implementing a number of measures to protect retail investors.That will include ensuring that operators provide an appropriate on-boarding process. In the case of crypto asset projects, the SFC is determined to see to it that good governance is implemented, alongside enhanced token due diligence, admission criteria, and disclosures.In the statement, the SFC’s CEO Julia Leung, said that “providing clear regulatory expectations is the key to fostering responsible development.” She added that “Hong Kong’s comprehensive virtual assets regulatory framework follows the principle of ‘same business, same risks, same rules’ and aims to provide robust investor protection and manage key risks. This will enable the industry to develop sustainably and support innovation.”Specific conditionsOne item that the SFC’s new rule-book on virtual asset trading for retail investors outlines is a ban on crypto “gifts.” Effectively any promotions or incentives that lead with free gifts, and this will likely include token airdrops, will be prohibited.In terms of capital liquidity, virtual asset exchanges will be required to maintain a minimum of 5,000,000 Hong Kong dollars ($638,000) at all times as a minimum paid-up share capital. A Platform Operator must at all times maintain liquid capital which is not less than its required liquid capital,” the document outlines.Token due diligenceThe SFC acknowledged that it can be difficult for virtual asset exchanges to carry out due diligence on new tokens. With that in mind, it has incorporated a requirement for any new token to have a twelve-month track record before it can be considered to be listed to provide an indication of such things as supply, demand, maturity, and liquidity. In that way, exchanges have some data to work with in carrying out token due diligence.Smart contracts have been a point of weakness in recent years, with considerable sums lost through hacks that have exploited smart contract code vulnerabilities. To that end, the SFC insists that as part of token due diligence, new assets will have to undergo smart contract audits performed by independent assessors.Given that the spate of recent crypto platform failures implicated loss of customer deposits, the rule-book considers the need for segregation of client funds. Exchanges will need to segregate funds and can either hold them separately from the assets of the exchange itself or have them held in escrow.