Intella X teams up with Galxe to ramp up ecosystem

The Monetary Authority of Singapore (MAS), the city-state’s central bank and primary financial regulator, has set a deadline of June 30 for unlicensed digital token service providers (DTSPs) working out of Singapore to cease offering their services to clients in overseas markets.Photo by Hu Chen on UnsplashResponding to feedbackThe deadline emerged by way of a process MAS has followed as part of the Financial Services and Markets Act 2022 (FSM Act). Last October, the regulator invited feedback from stakeholders related to the authority’s approach to the regulation of DTSPs. MAS published its response to that feedback on May 30.  It stated:”DTSPs which are subject to a licensing requirement under section 137 of the FSM Act must suspend or cease carrying on a business of providing DT services outside Singapore by 30 June 2025.” It added that it was not including any transitional arrangement for DTSPs despite MAS receiving such a suggestion from a number of feedback respondents. Instead, unlicensed DTSPs will need to abide by the June 30 deadline and have acquired a license by then or cease unlicensed activity.The regulator defines DTSPs as individuals, partnerships or Singapore corporations operating from a place of business in Singapore, including those formed or incorporated in Singapore who offer digital token services outside Singapore. Those found in breach of the regulation could face up to three years in prison and fines of up to S$250,000 ($195,000). Companies who have already obtained licensing or those exempted by way of the Securities and Futures Act, Payment Services Act and the Financial Advisers Act are free to continue trading. Challenging licensing requirementsThose who wish to become compliant will have to satisfy some challenging requirements. For those granted a license, an annual license fee of S$10,000 ($7,780) applies. Small-scale DTSPs need to satisfy a $150,000 ($116,670) ongoing capital requirement, while larger, well-established DTSPs must comply with a S$250,000 ($195,000) capital requirement. Additionally, MAS has put in place competency requirements related to a DTSP's CEO, directors, partners and managers. Hagen Rooke, a partner at law firm Gibson, Dunn & Crutcher, outlined on LinkedIn that while it's possible for unlicensed operators to obtain licensing, it will be very difficult to get a license. In its feedback response document, the regulator stated: “MAS will approach the licensing of DTSPs in a prudent and cautious manner and there will be extremely limited circumstances under which MAS will consider granting an applicant a licence under section 138 of the FSM Act.” Rooke advised crypto companies that may be affected to act swiftly in order to derisk through an operational restructuring or removing the businesses' Singapore touchpoints. He suggested that firms need to consider if it has customers outside of Singapore or front-office functions located outside of the city-state to determine if they could be affected by this regulatory measure. A number of Asian countries have moved to take action against unlicensed foreign firms that have engaged with local investors, with Thailand becoming the latest country to do so recently. However, the Singaporean authorities have approached the issue from the opposite perspective, citing the potential reputational risk that unlicensed DTSPs pose for Singapore.

MaskEX Gets Initial Regulatory Approval in UAEThe online cryptocurrency trading platform and wallet provider, MaskEX has been given initial regulatory approval by a regulator in the United Arab Emirates (UAE).Photo by Carlos Alberto Gómez Iñiguez on UnsplashThe trading platform received outline approval from the Virtual Assets Regulatory Authority (VARA) in Dubai, where the company is headquartered. While the business has been around since 2021, this first compliance step is significant as it seeks to build and extend its footprint within the UAE and the broader Middle East and North Africa (MENA) region.Regulatory significanceTo say that regulation has lagged the development of crypto assets on a global basis is an understatement. However, the high profile and spectacular crypto business failures in 2022 have really captured the attention of regulators and lawmakers. Many point to inadequate regulation as a key cause of those failures. With that, most regulators recognize that it won’t be acceptable to the broader public to have such a loss impact on ordinary investors in a rerun of the collapses of 2022.VARA has been one of the most proactive regulators in that respect. The Authority has developed a regulatory framework, culminating in its current licensing regimen for crypto businesses. It wouldn’t have been feasible for MaskEX to trade without obtaining regulatory approval.Regulatory actionIn February, VARA issued Open Exchange (OPNX), a platform that specializes in the trading of crypto bankruptcy claims, with a cease and desist order, relative to the establishment of that business in Dubai. Last month, the Regulatory Authority issued an investor alert related to OPNX, warning the investing public that OPNX was not regulated by them and that investing in or using the platform was risky.That culminated with VARA sending OPNXs founders and CEO a formal warning letter. With that sort of action playing out, it’s no surprise that MaskEX has tried to go the compliant route, acquiring that initial approval.The firm is not alone in taking that approach. On May 1, BitOasis, another crypto trading platform headquartered in Dubai, became the first entity to be awarded a broker-dealer license.This milestone event for MaskEX means that it can now complete entity formation, expand its team, secure banking services and generally, open for business. In its application MaskEX requested permission to engage in the activity of acting as an exchange, offer borrowing and lending services, as well as to act as a broker and crypto asset manager.Crypto market to be driven by ME and Central AsiaOn social media on Thursday, MaskEXs VP and Chief Strategy Officer (CSO) Ben Caselin, said that the initial approval forms part of the firm’s application for a Full Market Product (FMP) license. Caselin used the opportunity to post a video offering a sneak peek at the firm’s new Dubai offices. “MaskEX will be the first crypto exchange to publicly disclose their headquarters and even allow the general public to visit,” he said.Speaking at Finoverse Arabia this week, Caselin also said that “the next crypto bull market is once again going to be driven by Asia, and the unsurprising surprise will come from the Middle East and Central Asia.” That’s a prediction that’s being floated by quite a number of industry commentators, and with the US shooting itself in the foot in its approach to digital assets, it sounds like a reasonable prediction.

The Korea Customs Service (KCS) is preparing to establish a dedicated task force to combat the surge in cryptocurrency-related crimes. According to a report by local media outlet Joseilbo, this initiative was deliberated in a meeting chaired by KCS Commissioner Ko Kwang-hyo, specifically convened to discuss strategies against foreign exchange violations. The KCS reported that last year, it uncovered a total of 198 criminal incidents related to foreign exchange activities, with the combined value reaching approximately KRW 1.9 trillion ($1.4 billion).Photo by Mathew Schwartz on UnsplashCrypto involved in 88% of forex violations Of the total amount mentioned, violations of the Foreign Exchange Transaction Act comprised KRW 1.654 trillion, with 88% of these incidents involving virtual assets. This represents a dramatic surge in the involvement of virtual assets in financial crimes, especially when compared to 2020, where crypto-related offenses constituted 3% of the total value linked to forex violations. This trend underscores the rapidly growing role of virtual assets in such illicit activities. To address these issues, the KCS is set to broaden its crackdown on illicit cryptocurrency activities. This crackdown targets practices such as transferring foreign currency overseas to acquire virtual assets for arbitrage trading and using virtual assets to conceal trade payments, thereby attempting to bypass customs duties.Task force’s international collaborationAs part of this initiative, the country's customs agency aims to build a task force focused on tackling crypto crimes. This specialized group will be responsible for gathering and analyzing data, conducting investigations and recommending regulatory enhancements. The task force will collaborate with financial regulators to obtain crypto transaction records from domestic cryptocurrency exchanges. Moreover, it will work with customs authorities of other countries, including Hong Kong, to collect details on crypto transactions conducted abroad.