SGX to list Bitcoin perpetual futures in H2

Many Countries Are Welcoming Traditional Financial Institutions Into Crypto — When Will Korea Catch Up?Although overseas traditional financial institutions are gradually expanding their reach into the crypto market by launching related services and products, this remains challenging for institutions in South Korea, where it is difficult for them to even invest in virtual assets.Photo by NASA on UnsplashMajor developments in other countriesAccording to industry sources, traditional financial companies such as Japan’s largest investment bank and brokerage group Nomura Group, and New York-based investment banking company Citigroup are starting to bring new crypto-related services and products to the market.Laser Digital, the asset management unit of Nomura Group, launched a Bitcoin adoption fund targeting institutional investors, according to an official press release from last Tuesday (local time), which will provide institutional investors with direct and secure access to investments in Bitcoin.Similarly, Citigroup’s Treasury and Trade Solutions (TTS) is piloting its new crypto-based cash management and trade finance service dubbed Citi Token Services, which caters to institutional clients by utilizing blockchain and smart contract technology to provide digital asset solutions. “Digital asset technologies have the potential to upgrade the regulated financial system by applying new technologies to existing legal instruments and well-established regulatory frameworks. The development of Citi Token Services is part of our journey to deliver real-time, always-on, next-generation transaction banking services to our institutional clients,” said Shahmir Khaliq, Global Head of Services at Citi.Earlier this summer, several asset managers in the US, including BlackRock, applied for a spot-traded Bitcoin exchange-traded fund (ETF) with the US Securities and Exchange Commission (SEC), drawing the interest of the industry as a whole. The SEC has been delaying its decision regarding approval for the ETF and will likely do so until its allotted 240-day review period is over, but industry experts predict that the approval will go through for several reasons including BlackRock’s implicit influence as the world’s biggest asset manager and the SEC’s former court loss against Grayscale for its review of the firm’s spot Bitcoin ETF.These developments are made possible through the commonly held opinion that the involvement of traditional financial institutions in the crypto sphere is beneficial for the industry due to their ability to increase liquidity by moving much larger amounts of capital than the crypto market alone.Moreover, many countries around the world already allow institutions to invest in virtual assets. For instance, the US Nasdaq Stock Market has already listed crypto futures-based ETFs such as Bitcoin and Ether, and there are trust products on the market like Grayscale’s Bitcoin Trust that target qualified investors. Countries like Hong Kong have also gradually begun to allow individual investments in virtual assets again, while institutional investment has always been permitted.Roadblocks in KoreaIn contrast, it remains impossible for institutional or corporate investors in Korea to invest in virtual assets, let alone offer virtual asset fund products. Although local asset managers like Mirae Asset Global Investments and Samsung Asset Management have listed Bitcoin-related ETFs in the US and Hong Kong, such products do not exist in South Korea.Korean authorities also banned financial institutions from holding, purchasing, or investing in virtual assets back in 2017 on the grounds that their investment in cryptocurrencies could stimulate investor sentiment. Also, shadow regulation after the enactment of the Act on Reporting and Using Specified Financial Transaction Information in 2021 practically bars local corporations and institutions from using crypto exchanges, though there is no provision that explicitly prohibits opening corporate bank accounts on crypto exchanges.In response to this situation, an anonymous industry insider highlighted the need for a nationwide drive to support virtual assets and Web3 technology. “This is the time to push emerging industries, and we should not overlook industry trends. The current situation is somewhat frustrating,” they said. “Japan was the most conservative country in this regard, but it has recently opened up and subsequently gained momentum. Korea should also take a more progressive approach.”

CityLabs Secures 8.55% Stake in GopaxCityLabs, a company listed on the KOSDAQ stock exchange, has stepped in as a rescue investor for the South Korean cryptocurrency exchange Gopax.The company announced last Friday that it has acquired a total of 76,308 shares of Streami, the operator of Gopax, securing an 8.55% stake in the company. The investment amounts to a total value of KRW 5.4 billion (approximately $4 million).Photo by Precondo CA on UnsplashGopax’s turbulent historyGopax has recently been facing public and regulatory scrutiny due to its internal struggles, such as undergoing major changes in leadership earlier this year following its acquisition by Binance, with Lee Jun-haeng resigning and Binance’s Asia Pacific Head, Leon Sing Foong, taking over.After this event, Streami submitted reports to the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSS) in line with requirements to inform the regulatory body about such changes. However, due to delays in the FIU’s approval process likely influenced by Binance’s various legal and regulatory challenges, there was yet another leadership transition — Foong stepped down, and Lee Joong-hoon, Gopax’s former Vice President, took over. Notably, Foong recently left Binance altogether amid regulatory crackdowns.During this process, Gopax also struggled to make principal and interest payments on its own decentralized finance (DeFi) service, GOFi, in the wake of last year’s FTX collapse. The amount of customer funds locked in GOFi totals KRW 56.6 billion, according to an announcement made by Gopax in April. Binance acquired a stake in Gopax on the condition that it would inject enough capital into Gopax to repay this amount in full.CityLabs steps inAs a result, there have been speculations that a Korean company would invest in Gopax and deliver the exchange from its woes. Some even predicted that this company might become a major shareholder, although CityLabs has acquired only an 8.55% stake due to the fact that the funds required to do so far exceed CityLabs’ annual revenue.Last year, CityLabs reported a consolidated revenue of KRW 28.4 billion and an operating loss of KRW 6.1 billion. Although its revenue increased by 2% compared to the previous year, operating losses grew by 46.9%. While the company may not have sufficient funds at present to become a major shareholder, there lies the possibility that it may increase its stake in the future.The acquisition seems to be driven by CityLabs’ interest in blockchain businesses and the crypto market. While it currently specializes in intelligent transportation systems (ITS), it was formerly Dayli Blockchain, which was affiliated with the crypto exchange Coinone and Dayli Financial Group (now known as Gowid). In 2017, Yellow Mobile became the largest shareholder of Dayli Financial, and in February 2018, it became the largest shareholder of DailyBlockchain, making Dayli Blockchain its subsidiary. Coinone was also a subsidiary of Yellow Mobile at the time. All of these ownership relations have now been restructured.CityLabs has thus been involved in the blockchain industry for some time now with previous connections to cryptocurrency exchanges while also offering decentralized identity (DID) and blockchain as a service (BaaS) products. Observations point to the possibility that its history has influenced its decision to invest in Gopax.“We acquired shares to secure an entry point into the crypto market and position ourselves as a major player,” the company said in a statement.Meanwhile, financial authorities are considering plans to examine the eligibility of major shareholders when reviewing applications from crypto businesses.

Korea’s ABB Joins Hands with Vietnam’s DTS Group for Web3 DevelopmentSouth Korean Web3 consulting firm ABB announced Monday that it has signed a comprehensive memorandum of understanding (MOU) with DTS Group, one of the fastest-growing companies in Vietnam.The agreement was signed at the 20th World Web 3.0 NFT META Marvels Bangkok 2023 conference held in the Thai capital last Friday, with ABB’s CEO, Jung Joo-pil, and DTS Group’s Chairman, Truong Gia Bao, in attendance.Photo by Shubham Dhage on UnsplashFostering Web3 innovation and diplomatic tiesThis collaboration is expected to contribute significantly to the development of Web3 in both Korea and Vietnam. They will start by discovering and investing in promising blockchain startups and expand into more diverse business areas, then further enhance their cooperation in Web3 technology development and promotional marketing in the future.About ABB and DTS GroupABB is primarily engaged in consulting, promotional marketing, and fundraising for blockchain-related projects. It is widely known as the publisher of the Korean blockchain monthly magazine Blockchain Today, through which it contributes to the growth of the Korean blockchain industry.DTS Group, on the other hand, is one of the fastest-growing firms in Vietnam and operates via four main subsidiaries, including DTS Foundation, which focuses on the incubation of blockchain startups; DTS Ventures, a venture capital firm that invests in blockchain startups; DTS Media, which engages in marketing and event organization; and Mira Blockchain Center, which focuses on the development and support of blockchain and AI technologies.