Bybit joins quest for VATP license in Hong Kong

UAE Starts to Accept Crypto License ApplicationsEarlier this week, the United Arab Emirates (UAE) announced that it has commenced the process of accepting license applications from crypto companies.©Pexels/Andrea PiacquadioThe announcement was made by the Middle Eastern country’s Securities and Commodities Authority (SCA) on Monday. The decision comes in the wake of last year’s UAE Council of Ministers opting to regulate the country’s crypto sector as per Decision №111.VASP approval processAs part of the process, virtual asset service providers (VASPs) are obliged to apply to the SCA for approval with those already licensed within the UAEs financial-free zones not required to undertake the process.When it comes to the individual Emirates of Dubai and Abu Dhabi, both have already implemented their own licensing process relative to crypto service providers. In the case of Dubai, it already has its Virtual Assets Regulatory Authority (VARA) and its procedures have been deemed to be unified with the process now being implemented by the UAE.The SCA suggested that the initiative offers the opportunity for crypto companies to “regularize their status.”Key rulesThe SCA has set out nine articles as part of the process it is asking crypto companies to apply for and sign up to. Article 3 stipulates that VASPs can only trade digital or virtual assets that have been accepted and approved within an official list of virtual assets.Article 4 sets out the tasks and responsibilities of the virtual assets platform operator. It considers the need for integrity, transparency and professional behavior. Service access must be organized through procedures that facilitate access only for permitted persons.Article 5 highlights the obligations of VASPs relative to seven areas. These include operational efficiency and flexibility, and the provision of operational rules. That incorporates the need for the setting and maintenance of operational business rules and meeting operational rules according to a predefined set of standards.The policy sets out the right of the SCA to request provision of documents and data from a VASP and their receipt within a specified time period.Jurisdictional arbitrageThe UAE and particularly its Abu Dhabi and Dubai emirates are demonstrating that they’re open for business where the digital assets sector is concerned. It’s one location that’s on the rise in terms of coming to global prominence in competing for crypto business alongside places like Singapore and Hong Kong.The Biden administration in the United States has shifted policy relative to digital assets to the down side. On Wednesday it emerged that leading US exchange Coinbase has received approval to operate in Bermuda. It’s being speculated that negotiations are also underway in Abu Dhabi to secure a license for the company to trade there.On the day in which Securities and Exchange Commission (SEC) Chair Gary Gensler received a harsh grilling in front of the House Financial Services Committee on Capitol Hill, Coinbase CEO Brian Armstrong confirmed that the company is prepared to move overseas if the regulatory environment doesn’t improve in the United States.Meanwhile, earlier on Thursday, the European Union officially passed its Markets in Crypto-Assets (MiCA) legislation in the European Parliament, providing clarity for the digital assets industry in Europe. In moving forward with crypto licensing, the UAE is jockeying for position among a field of global centers that are vying for crypto business while the US falls behind.

A Beijing-headquartered venture capital firm has invested $30 million in Hong Kong’s HashKey Exchange. That’s according to a report published by Bloomberg on Feb. 14, citing unnamed sources understood to be familiar with the matter. HashKey’s capital injection has come from Gaorong Ventures.  The Chinese VC firm was founded in 2014, initially known as Banyan Capital before rebranding as Gaorong Ventures in 2018. The VC firm focuses on early and growth-stage investments, with a specific interest in new technology.  Gaorong has 23 IPO portfolios on its books, together with 30 projects valued at in excess of $1 billion. It has been an early-stage investor in Chinese tech firms such as Chinese shopping platform Meituan and online retailer PDD Holdings.  Last year, the company participated in a funding round for Dongchedi, the car information and trading platform belonging to ByteDance, the parent company of TikTok.Photo by Towfiqu barbhuiya on UnsplashBeyond unicorn statusIn this instance, the funds were invested with HashKey Group weighing in with a post-money valuation in the region of $1.5 billion. That puts the company well beyond unicorn status, which it achieved in a previous $100 million funding round over a year ago. At that time, HashKey didn’t disclose the names of investors other than to state that they were “prominent institutional investors” and “leading Web3 institutions.” It’s understood that the round included both existing and new investors. Surging VC investment in crypto startups This latest investment comes amid a backdrop of a surge in venture capital investment into the crypto sector. Well-known American venture investors Sequoia Capital and Andreessen Horowitz (a16z) invested almost $1.2 billion in crypto projects last month.  In 2024, $13.7 billion was invested in crypto and blockchain startups by venture capital firms, marking a 28% increase on the previous year. In Q4 2024, the United States took first place, accounting for 46% of investment into startups across the market in general. Hong Kong weighed in with 17% in second place.HashKey is also playing its own role in crypto and blockchain startup investment. HashKey Exchange’s sister company, HashKey Capital, is an institutional asset manager that also invests in crypto startups. In recent weeks, the company has invested in SignalPlus, a crypto trading software firm focused on the Asian market, and Kelpr, a Cosmos (ATOM) ecosystem wallet project. More crypto VC investment in 2025In January, HashKey Capital CEO Deng Chao told Cointelegraph that he expected more VC capital investment in crypto startups in 2025. He stated: “As we enter into a supportive macro environment driven by stimulative US policies and the formalization of crypto regulatory frameworks, these macro tailwinds are set to drive more VC investments heading into 2025.” Meanwhile, the overarching HashKey Group is positive in its outlook with regard to the crypto and blockchain sector in 2025. Last month, it outlined that it expects Bitcoin and Ethereum to surge in price, the share of the market held by decentralized exchanges (DEXs) to increase, capital inflows into the sector from institutions to grow, the approval of more crypto ETFs and further development of layer-2 networks over the course of the year.

Dtcpay Looks to Extend Crypto Payment Services to Hong KongDtcpay, a Singapore-based payment processor catering to both fiat and cryptocurrencies, has set its sights on expanding into Hong Kong by the end of this year. The company also has plans to establish an office in Dubai, another prominent crypto hub, by 2024.Photo by Jonas Leupe on UnsplashNorth Asia potentialIn an interview with Tech in Asia, Kanny Lee, the group CEO of Dtcpay, expressed optimism about the North Asia market, citing clear regulations and rules for digital assets and the recent opening up to retail participants. Lee believes that the region holds significant potential for growth over the course of the coming years.Dtcpay generates revenue through crypto conversion rates on transactions and has already acquired approximately 12 merchants. The company aims to onboard up to 100 merchants by the end of 2023. Since the beginning of this year, the firm has experienced a fourfold increase in transaction volume.Seamless regional paymentsLee acknowledged that most consumers view tokens primarily as investments. Dtcpay’s objective is to unify various payment methods across different countries, including Indonesia, Malaysia, India, Vietnam, and Singapore, providing a seamless experience for both merchants and consumers.As an example, Dtcpay enables users to purchase cars using cryptocurrencies, significantly reducing transaction fees from approximately 4% to just 0.5% compared to cash payments. Notable partnerships in Singapore include Cars and Coffee and DM Autohaus.In June, Dtcpay secured a pre-series A funding round, raising $16.5 million from Kwee Liong Tek. Tek, the chairperson of the Pontiac Land Group, which owns renowned hotels such as the Ritz-Carlton and Conrad Hotels in Singapore, has enabled Dtcpay to target the hospitality sector. At the time Lee said that there are an increasing number of businesses expressing interest in collaborating with regulated entities in the digital assets space and combined with an increase in the adoption of digital payments, that’s turbocharging DTCpay’s business.RebrandThat focus on digital payments led to the company rebranding back in April from Digital Treasures Center to Dtcpay. It appears that Hong Kong was already on the company’s radar back then as Lee stated at the time that “in Asia, particularly the key tier 1 financial capitals such as Singapore, Hong Kong and Tokyo, [they] have experienced a rapid rate of digital adoption primarily due to transparent regulatory frameworks for digital financial inclusion.”Additionally, Dtcpay obtained a major payment institution license from the Monetary Authority of Singapore in August 2022. The company plans to launch a debit card in Q4 2023. That product will allow cardholders to convert their cryptocurrencies into multiple currencies without incurring foreign exchange fees.The company was co-founded in 2019 by Sam Lin, Band Zhao, and Alice Liu, with Lee joining the company earlier this year with a view towards expanding its area of operations beyond Singapore.With its expansion plans into Hong Kong and its focus on innovation, Dtcpay is certainly aiming to establish itself as a leading player in the crypto payment services industry, catering to the evolving needs of merchants and consumers alike.