Japan to implement crypto insider trading restrictions

No Turkish Delight for Crypto Exchange CEO Sentenced to 11,196 YearsIn a landmark ruling, Faruk Fatih Ozer, the 29-year-old Turkish Founder and CEO of defunct Turkish crypto exchange Thodex, has been sentenced to 11,196 years in prison for orchestrating a massive fraud that left investors out of pocket.Photo by engin akyurt on UnsplashExtradited from AlbaniaBloomberg reported on Friday that Ozer, the mastermind behind the Thodex exchange, fled to Albania in 2021, vanishing along with millions of dollars in investor assets as the exchange suddenly crumbled.His arrest in Albania on an Interpol warrant marked the beginning of a lengthy legal battle. Having spent months on the run, he was finally extradited back to Turkey in June, where he faced charges of money laundering, fraud, and organized crime. During the trial in Istanbul, Ozer defended himself, claiming that his actions did not demonstrate criminal intent. He asserted:“I am smart enough to lead any institution on Earth.”“That is evident in this company I established at the age of 22. I wouldn’t have acted so amateurishly if this were a criminal organization,” he added. Nevertheless, the court found him guilty, along with his sister Serap and brother Guven, who faced the same charges.Lengthy jail termThe sentences handed down were notably long, with the defendants sentenced separately for multiple crimes against 2,027 victims. Following the abolition of the death penalty in 2004, lengthy prison sentences are quite common in Turkey.Prosecutors had initially sought a jaw-dropping 40,562-year prison sentence for Ozer, although the difference would have been purely symbolic when compared with the sentence which was ultimately handed down. The Thodex exchange, founded in 2017, quickly rose to prominence as one of Turkey’s largest cryptocurrency platforms.Ozer’s financial acumen earned him national recognition, and he even cultivated ties with influential pro-government figures. However, the sudden implosion of the Thodex exchange in April 2021 shook the cryptocurrency world. Investor assets vanished, and Ozer went into hiding.Reports initially indicated that Ozer had fled with assets worth $2 billion, but the prosecutor’s indictment put the total losses to Thodex investors at 356 million Turkish liras. The depreciation of the lira and rampant inflation since the exchange’s collapse means that this amount is now equivalent to around $13 million on the international markets.Lagging regulationThe Thodex case serves as a stark reminder of cryptocurrency market risks, given its immature state and the lag in regulators responding to the innovation in order to ensure a safe marketplace for investors.Despite this setback in the development of the crypto ecosystem within Turkey, interest in crypto is stronger than ever. A recent report produced by Seychelles-based crypto exchange KuCoin found that there has been a significant increase in crypto market participants in Turkey over the course of the past 18 months. It’s likely that runaway inflation of the Turkish lira is providing Turks with the motivation to investigate crypto as an alternative.

Global crypto exchange platform Binance has launched “Sharia Earn,” a crypto staking product that has been certified as being Sharia-compliant. Sharia-compliant financial products adhere to Islamic law, with sharia law being Islamic canonical law based upon the teachings of the Koran. The product incorporates multi-token staking featuring BNB, Ether (ETH) and Solana (SOL). The product has been built on top of existing infrastructure which Binance had already used to offer “Simple Earn Locked Products” relative to BNB and liquid staking in the case of ETH and SOL. Users of the product can earn staking rewards on crypto assets, while secure in the knowledge that they are investing in compliance with Islamic finance principles.Photo by Kanchanara on Unsplash‘Most meaningful product yet’The new product was announced by the company during a Binance Square Webinar. Binance CEO Richard Teng described it as the firm’s “most meaningful product yet.” He referred to the launch of the product as a defining moment both for Binance and the broader crypto sector. Teng said that “a truly inclusive financial system must respect the values and needs of every community, and that’s the vision behind Sharia Earn.” He added that “Islamic finance’s core tenets—transparency and shared prosperity—are universal,” asserting that these same values are at play in driving Binance. The platform contracted Amanie Advisors, a Dubai-based global Islamic finance advisory service, in order to obtain Sharia-compliant certification for its latest product. Bader Al Kalooti, Binance’s Head of Operations, Marketing & Growth for the Middle East & North Africa (MENA) region, said that “crypto adoption has surged in many Muslim-majority countries, but yield-generating products have remained largely inaccessible due to compliance concerns.” He claimed that the arrival of “Sharia Earn” addresses this issue. While this is Binance’s first Sharia-compliant product, it’s not the first major exchange to enter this market. Last year, Bybit, a Dubai-headquartered global crypto exchange, engaged with ZICO Shariah Advisory Services in order to obtain certification for the trading of Sharia-compliant digital assets. At the time, Bybit claimed to have launched the world’s first crypto Islamic account. Growing Islamic finance sectorIslamic law prohibits interest-based transactions. Crypto staking can be structured in such a way as to avoid interest. Staking is considered to be acceptable as rewards are not fixed. Staking rewards are seen as profit-sharing, with the staker retaining ownership of the asset and being open to the risk of potential losses. Some forecasts suggest that the overarching Islamic finance sector could reach $4 trillion in the years ahead. That represents a market opportunity for crypto platforms to cater to this market by taking the time to acquire Sharia-compliant certification for their crypto products. Binance and Bitget are not the only entities to spot this market opportunity. A new crypto trading platform called BurjX, founded by Canadian entrepreneurs Adam Ferris and Omar Abbas, has been established in the United Arab Emirates (UAE) with a vision of developing Sharia-compliant and regulatory-compliant crypto products.  While no definitive timeline has been established, Abbas told the UAE English language daily newspaper, the Khaleej Times, that his company “will partner with the appropriate Sharia boards, and when we do launch, it’s going to be approved by the appropriate regulators.”

Binance Weighs Up UAE Expansion Amid Regulatory PressuresGlobal cryptocurrency exchange Binance is contemplating a strategic shift towards the Middle East as it faces regulatory challenges in the United States and Europe.Alex Chehade, the General Manager of Binance Dubai, believes that the United Arab Emirates (UAE) could emerge as a preferred destination for crypto businesses due to favorable and transparent regulations.Photo by Saj Shafique on UnsplashUAE’s regulatory certaintyChehade emphasized the UAE’s ambition to establish itself as a key player in the Web3 industry and diversify away from fossil fuels, with cryptocurrencies playing a significant role in this transition. Speaking to Cointelegraph, the local branch manager of Binance highlighted the certainty and predictability offered by the UAE’s regulatory framework, making it an attractive environment for business development.Binance MENA statistics indicate that the UAE has the highest number of cryptocurrency holders, with approximately 28% of UAE residents owning cryptocurrencies. This data highlights the significant interest and adoption of digital assets in the country.Binance obtained a Virtual Assets Regulatory Authority (VARA) license in Dubai in 2022, making it one of the first exchanges to do so. The license includes a Virtual Asset License obtained in March and a Minimal Viable Product (MVP) license secured in September. The MVP license allows Binance to offer a full range of approved digital assets and related services.Facing difficulties in the US & EuropeThis strategic consideration by Binance comes at a time when the exchange is grappling with legal issues on multiple fronts. Lawsuits filed by the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) in the United States have added to the regulatory pressure. In Europe, Binance has faced challenges, including an order from the Belgian FSMA to cease operations immediately, de-registration in the UK, ongoing investigations in France, and withdrawal from the Netherlands and Cyprus.In Europe, Binance recently decided to delist privacy tokens, such as Zcash and Monero, due to changes in local anti-money laundering regulations. However, the exchange later reversed that decision on the basis that the classification of these assets has been revised to comply with legal requirements within the EU.While European officials aim to establish Europe as a hub for cryptocurrencies with the implementation of Markets in Crypto-Assets (MiCA) regulations, Binance’s actions suggest a preference for other jurisdictions.The rise in popularity of cryptocurrencies in the UAE can be attributed, in part, to the VARA. Chehade commends VARA for providing a clear regulatory framework for crypto businesses, which he believes is lacking in other regions.As Binance faces regulatory pressure in the West, the company is exploring opportunities in the Middle East, particularly in the UAE, where the regulatory framework, growing crypto community, and commitment to becoming a Web3 hub make it an attractive prospect for expansion.It is understood that Binance’s Founder and CEO, Changpeng Zhao (CZ), lives in Dubai. However the headquarters of the company has remained unclear. Originally founded in Shanghai in 2017, the firm was later moved to Tokyo and later to Malta. Perhaps the UAE will serve as the company’s base going forward.