Over Half of Leading Korean Conglomerates Are Venturing Into Web3 and Blockchain

Zipmex proposes creditor repayments of 3 cents on the dollarBeleaguered Singaporean crypto exchange Zipmex has unveiled a restructuring proposal aimed at repaying creditors. According to a report published by Bloomberg on Wednesday, the initial offer stands at 3.35 cents for every dollar of the creditors’ claims.Photo by Alexander Grey on UnsplashRestructuring challengesThis restructuring proposal unfolds against the backdrop of a challenging period for Zipmex, triggered by the aftermath of last year’s crypto price downturn. The crypto exchange, which operates in Thailand, Indonesia, Australia and Singapore, is currently undergoing a court-supervised restructuring process based in Singapore.In its efforts to restructure the business, Zipmex is grappling with a debt of $97.1 million. That total debt level is contingent upon the eventual recovery of assets. Bloomberg cited sources familiar with the matter, suggesting that depending on the success of these recovery efforts, the repayment figure could potentially surge to 29.35 cents per dollar.Creditor dissatisfactionHowever, not all major creditors are on board with Zipmex’s proposed plan. Expressing reservations, they are pushing for an independent review to scrutinize recent changes in the company’s assets and liabilities, as outlined in an Oct. 4 court document. This external examination is deemed crucial to ensuring transparency and fairness throughout the restructuring process.In response to these developments, Marcus Lim, the Group Chief Executive Officer of Zipmex, refrained from providing detailed comments due to the confidentiality of the ongoing arrangement. While acknowledging inaccuracies in information sourced from external outlets, he chose not to elaborate on them further.Investor deal failureA previous attempt to sell Zipmex to V Ventures, a subsidiary of Thoresen Thai Agencies, fell through. To add to the struggling company’s woes, it emerged earlier this week that Thailand’s securities regulator, the Securities and Exchange Commission (SEC) recently instructed Zipmex to halt operations in the country due to insufficient net capital.The company had been fined 11 million baht ($315,000) by the SEC earlier this year. The SEC cited the co-mingling of corporate and customer funds as one regulatory breach. Furthermore, the Thai regulator claimed that between May and July 2022, Zipmex “did not have in place a system to effectively prevent conflicts of interest in such matters and the business operation does not have an adequate risk control system.”In response to this recent regulatory directive, Zipmex Limited issued a statement to its customers, expressing its commitment to ensuring proper and compliant business operations in line with the criteria set by the Thai SEC. Consequently, the temporary suspension of digital asset trading and deposit of all types was deemed necessary.The intricacies of Zipmex’s financial restructuring will be closely watched by market observers, especially considering the volatility in the crypto market and the regulatory challenges faced by the company in multiple jurisdictions. The success of the proposed repayment plan, contingent upon asset recovery, remains uncertain, leaving creditors and industry stakeholders on edge.As Zipmex grapples with these multifaceted challenges, its future trajectory hinges on navigating both the demands of the bankruptcy process alongside regulatory requirements.

U.S. regulator, the Commodity Futures Trading Commission (CFTC), has fined Seychelles-headquartered crypto prime brokerage Falcon Labs as part of an overall settlement with the company.  The CFTC had found that the company had operated as an unregistered futures commission merchant (FCM) and furthermore, that it had enabled access to digital asset exchanges without the requisite registration.Photo by Joshua Hoehne on UnsplashSettlement termsIn a press release published to its website on May 13, the CFTC set out the nature of its settlement with Falcon Labs. The parties have agreed that Falcon Labs must discontinue its activities in acting as an unregistered FCM, with particular emphasis on it having provided U.S. individuals with access to digital asset derivatives trading.  Furthermore a fine of $1,179,008 has been applied in disgorgement and in addition, Falcon will have to pay a civil monetary penalty of $589,504. These penalties have been significantly reduced by comparison with the CFTCs original ask, on the basis that Falcon Labs cooperated fully with the CFTC’s Division of Enforcement over the course of the regulator’s investigative process into the activities of the company. In its statement the regulator set out its intent relative to enforcement going forward. Ian McGinley, the CFTC’s Director of Enforcement, stated:”The CFTC is taking the fight one step further by, for the first time, charging an intermediary that inappropriately facilitated access to those exchanges. Today’s action highlights that the CFTC will not hesitate to charge any entities—exchanges or intermediaries—who are providing customers access to digital asset products and services that require registration but have failed to appropriately register.” McGinley added that “the CFTC’s enforcement program has made clear it will not tolerate digital asset exchanges that fail to register with the CFTC or comply with the agency’s rules that maintain integrity in the derivatives markets.” No admission of guiltIn responding to the CFTCs original complaint, Falcon Labs tried to up the ante in terms of compliance. It moved to improve customer identification controls. As a consequence of its market position as a trading intermediary Falcon Labs enabled customer trading on a number of digital asset exchange platforms.  That activity included facilitating U.S.-based institutional customers relative to crypto derivatives trading. It allowed its own account with various digital asset trading platforms to be used, through a system of sub-accounts, by its customers, oftentimes without adequate customer information having been sought. In reaching this settlement with the CFTC Falcon Labs has not made any admission of guilt relative to the regulator’s findings. Alongside paying the agreed upon fines, it will voluntarily agree to adhere to the implementation of improved controls and to withhold its services from user groups that are deemed to be restricted, including all U.S. nationals. Taking to the X social media platform to comment on the matter, Mike Sellig, a partner at New York-based law firm Willkie Farr & Gallagher, claimed that the settlement demonstrated that the CFTC was following in the footsteps of the Securities and Exchange Commission (SEC), establishing “a body of widely applicable precedent.”

Real-World Asset Investment Platform Alterna Launches in JapanMitsui & Co. Digital Asset Management (Mitsui & Co. DAM) has unveiled Alterna, a novel platform designed to offer retail investors the chance to invest in real-world assets (RWAs). The service launched on Monday following receipt of the necessary regulatory approvals.Photo by Louie Martinez on UnsplashRWA-backed security tokensAlterna enables users to conveniently invest in RWAs that generate stable rental income and other returns. RWAs encompass a wide range of assets, including large-scale real estate properties and infrastructure such as logistics facilities and power plants. By offering security tokens, Alterna opens the door to previously out-of-reach investment opportunities, allowing individuals to invest with a minimum of 100,000 yen. This new service represents an exciting alternative for individuals traditionally more comfortable with cash savings.The first investment opportunity on the platform will be “Stage Grand Nihonbashi Ningyocho,” a residential building located in the Nihonbashi district. The application begins on June 2.The platform’s name, Alterna, emphasizes its role as an alternative investment service, offering a fresh approach distinct from conventional options such as bank deposits, stocks, and investment trusts.More effective portfolio managementCompared to traditional investment types like stocks and bonds, RWAs offer unique risk-return characteristics. With RWA-backed investments, investors can potentially achieve more effective portfolio management. These alternative assets have been garnering interest from institutional investors as well.The Japanese Government Pension Investment Fund (GPIF), the world’s largest institutional investor, has been investing in alternative assets since 2014. To pursue yields, the GPIF has been expanding its investment portfolio in real assets like real estate and infrastructure.Easy investment with smartphonesTraditionally, retail investors encountered difficulties investing in large-scale real estate and infrastructure assets. Mitsui & Co. DAM aims to establish an environment where such investments can be made easily via security tokens using smartphones.Interest in Alterna has been substantial even before its official launch, with over 10,000 pre-registrations recorded earlier this month.