Saudi Arabia Looks to Diversify Through Web3

BitGo CEO Emphasizes Separation of Trading and Custody to Prevent Crypto BankruptciesMike Belshe, Founder and CEO of digital asset trust company BitGo, emphasized the importance of separating cryptocurrency trading and custody to prevent incidents similar to those involving Mt. Gox and FTX in his keynote speech at Impact, the main conference of Korea Blockchain Week (KBW) 2023.Established in 2013, BitGo is currently the world’s largest provider of virtual asset custody services, serving more than 1,500 institutions in over 50 countries, including the US, Switzerland, and Germany. Major exchanges like Bitstamp, Korbit, Bullish, Gate.io, and Crypto.com entrust BitGo with safeguarding their virtual assets.Clear divisionDuring his speech, Belshe repeatedly stressed the need for custody services for the sustainability of the virtual asset ecosystem, asserting that separating trading and custody can enhance trust in the industry and attract traditional financial institutions.Unlike stock markets, where payment institutions and custodians are separate entities, this kind of separation does not exist in the virtual asset market. To steer traditional financial institutions toward the virtual asset ecosystem, this issue needs to be addressed, Belshe said.He went on to cite the Mt. Gox hack in 2014 and the FTX collapse last year as examples that underscored the importance of virtual asset custody. Mt. Gox, once the world’s largest Bitcoin exchange, reportedly lost some 650,000 to 850,000 Bitcoins — worth more than $450 million at the time — due to a hacking incident, leading to its bankruptcy. FTX also faced insolvency after it was revealed that it inflated its assets using its native token FTT and that its management was misusing customer investment funds.Photo by Melinda Gimpel on UnsplashBelshe suggested that when Mt. Gox employees discovered the Bitcoin theft during the hack, it was already too late. If custody had been treated separately, the theft could have been detected much faster. Regarding the FTX debacle, he argued that even with just a few auditors, the problems in that situation could have been apprehended. FTX’s ability to provide custody of customer assets themselves led to unauthorized activities, including cross trading and insider trading, ultimately resulting in the misuse of customer funds.Korea’s favorable conditionsBelshe also assessed that South Korea is well-positioned for the establishment of virtual asset custody systems due to its high trading volume and a solid commitment to drafting crypto-related legislation. Seven such bills are currently underway, reflecting the authorities’ determination to address problems in the ecosystem. Korea thus has the potential to establish itself as a hub in Asia, he said.Indeed, BitGo’s partnership with Hana Bank to establish a joint venture for digital asset custody services in Korea is driven by these factors. Through its entry into Korea, BitGo aims to share its extensive knowledge and experience in digital asset business institutionalization and investor protection. It will also apply the expertise and strategies it has accumulated through close communication with regulatory authorities and supervisory agencies in various countries, including the US, to support the integration of virtual assets into the regulated framework in Korea.Belshe commented that through this partnership, BitGo will seek to enhance its understanding of Korea and utilize its technology and expertise to boost confidence in the Korean cryptocurrency market.

Coinone Boosts Crypto Account Security with Naver Two-Factor AuthenticationCoinone, one of South Korea’s leading crypto exchanges, announced on Wednesday that it has added Naver as another channel for two-factor authentication (2FA) when signing up for an account. This move aims to enhance security and convenience for users by introducing another option for the second step of authentication in addition to KakaoTalk and one-time password (OTP) authentication.Photo by Franck on UnsplashCombatting social engineering attacks“As the popularity of investing in virtual assets is on the rise, attempts to gain unauthorized access to accounts through smishing and phishing have also increased. We hope that users can use Coinone services in a safer, more convenient manner by using Naver as an easy authentication channel,” said Cha Myunghun, CEO of Coinone.All users are required to go through 2FA when signing up for a Coinone account in order to simultaneously protect their credentials and conduct deposits, withdrawals, and transactions. Users must verify themselves with their phone number first, then once more through an additional channel like KakaoTalk, Naver, or OTP authentication.Using KakaoTalk or Naver is easy and convenient since most Koreans already have both of these apps on their phones, and it takes a relatively short amount of time to complete.Extra benefitsUsers can register for Naver authentication on both the Coinone website and the app. Once they do, they can verify themselves through the Naver app without a separate login. These users can be granted more benefits such as increased withdrawal limits, the exchange said. Those who have verified their bank accounts for storing Korean won can have a withdrawal limit of up to 500 million won (approximately $373,000).

In a historic move, Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Chairman of the Board of the Central Bank of the United Arab Emirates (UAE), executed the first cross-border payment for the UAE’s central bank digital currency (CBDC), the "Digital Dirham." Utilizing mBridgeAccording to local news source Gulf News, the transaction, valued at 50 million dirhams ($13.6 million), was conducted directly with China through mBridge. mBridge is a multi-CBDC platform which has been developed to support peer-to-peer cross-border payments in real time. The blockchain-based system was established by the Bank of International Settlements (BIS), in conjunction with the central banks of Hong Kong, Thailand, China and the UAE. The project has an additional 23 central banks and the IMF involved as observers. It’s thought that mBridge can play a vital role for nations to circumvent the use of the U.S. dollar for international trade purposes. Within each participant country, the project has onboarded multiple commercial banks.Photo by Karthik B K on UnsplashMarking CBUAE’s 50th anniversarySheikh Mansour carried out this groundbreaking payment during a celebration commemorating the 50th anniversary of the Central Bank of the UAE (CBUAE). The event also witnessed the graduation of the inaugural batch of 1,056 citizens from the "Ethraa" program, a high-level training initiative at the Emirates Institute of Finance aimed at fostering Emirati representation in the financial sector. The ceremony, held at the Abu Dhabi National Exhibition Center, showcased the significant progress and development the CBUAE has undergone over its 50-year history. The apex bank has played a pivotal role in strengthening financial and monetary stability, contributing to economic growth, and implementing innovative projects as part of the Financial Infrastructure Transformation Programme (FIT program) to accelerate digital transformation in the financial services sector. Sheikh Mansour emphasized the leadership's commitment to solidifying the UAE's position as a global financial center, praising the CBUAE's role in enhancing financial and monetary stability, ensuring efficiency in the financial system and supporting economic growth and development. He underscored the leadership's dedication to empowering UAE nationals to become fintech specialists, providing them with skills and knowledge to contribute to the nation's progress. The Vice-President also commended the efforts of all CBUAE employees, the Emirates Institute of Finance and the graduates of the Ethraa program, expressing his best wishes for their success in serving the nation. During the event, Sheikh Mansour was briefed on the services offered by the "Aani" instant payment platform, designed to facilitate fast, secure and convenient fund transfers. He also witnessed the launch of "Open Finance," allowing consumers to connect and share data across the entire financial ecosystem, and the visual identity of the Ombudsman Unit called "Sanadak," the first independent unit for settling banking and insurance disputes in the Middle East and North Africa (MENA) region. According to data from the Atlantic Council, 130 nations, accounting for 98% of global GDP, have made some efforts towards exploring the adoption of a CBDC. 11 countries have actually launched a CBDC and 19 of the G20 economies are at the advanced development stage. Meanwhile, a survey report published by the BIS last summer revealed an expectation among central banks that by 2030, we could see the launch of nine wholesale CBDCs and 15 retail CBDCs.