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The European Union (EU) introduced its Markets in Crypto Assets (MiCA) regulation in June of last year, refining the EU bloc’s stance relative to digital assets. However, one crypto sector entrepreneur believes that the regulatory framework may force crypto startups to relocate to the Middle East. In an interview with Cointelegraph, Anastasija Plotnikova, co-founder and CEO of Fideum, a blockchain infrastructure company geared towards institutions, outlined that the application of this regulatory framework by EU member states may have some unintended consequences.Photo by Christian Lue on UnsplashCentralization concernsWhile Plotnikova welcomes the legitimization of crypto through regulation as a net positive for the sector, she warns that this particular regulatory framework could lead to consolidation among crypto firms. That would mean a reduction in the overall number of Web3 enterprises in Europe and as a consequence, increased risk of centralization in an industry that is supposed to be all about decentralization. Whilst the regulatory framework was introduced last year, it's not due to go into full effect until Dec. 30, 2024. Plotnikova believes that the framework doesn’t give crypto startups the wriggle room to scale whereas in the case of larger entities with much more assets under management, they will find it much easier to scale. French multinational financial services company Societe Generale, an entity with around $160 billion worth of assets under management and 126,000 employees, stands out as an example. It recently announced that SG Forge, a subsidiary company, would partner with Austrian crypto exchange Bitpanda to issue and list its EUR ConVertible (EURCV) euro-denominated stablecoin. Another European TradFi behemoth, Landesbank, Germany’s largest federal bank, announced earlier this year that it will launch crypto custody services. Global competitionSpeaking to the publication on the margins of the European Blockchain Convention in Barcelona earlier this week, Plotnikova stated: “I'm afraid it will lead to consolidation between European and American companies, and they will just move somewhere to the Middle East. The European Union had has done amazing things in harmonising legislation, but enforcement comes down to local and national authorities and they vary greatly.” There’s no doubt that various world centers and regions have been competing to varying extents to become innovative hubs relative to the development of blockchain-based enterprises. Plotnikova alluded to Europe losing out to the Middle East in this instance and principal among those nations in the region vying for a share of the business has been the United Arab Emirates (UAE).  The UAE itself, together with individual emirates such as Abu Dhabi and Dubai, has been putting in place a regulatory framework relative to crypto that has been broadly praised by the crypto sector. As recently as earlier last week, the Dubai regulator continues to fine tune its regulatory framework, tightening up requirements related to the marketing of crypto products and services. A recent report by Chainalysis found that the Middle East region accounted for 7.5% of global crypto trading volume, with the UAE and Saudi Arabia having been found to demonstrate a strong interest in decentralized platforms. 

Illiquid Token Sinks OPNX’s $30 Million Hodlnaut BidThe interim judicial managers overseeing the restructuring process of troubled Singaporean crypto lender Hodlnaut have firmly opposed the takeover offer presented by OPNX, the Dubai-based crypto bankruptcy claims trading platform associated with the founders of the now-defunct hedge fund, Three Arrows Capital.Photo by Image Hunter on PexelsSpeculative token valueIn a report published on Tuesday, Bloomberg referred to a recent court filing in which the administrators of Hodlnaut had characterized OPNX’s $30 million bid in FLEX digital tokens as “illiquid” and bearing “speculative value.” Additionally, a significant portion of Hodlnaut Group’s creditors, representing 60% of the total debt, had also voiced their dissent towards the proposed OPNX deal.Hodlnaut, headquartered in Singapore with operations in Hong Kong, found itself among the casualties of the $1.5 trillion crypto market downturn last year. OPNX had expressed its interest in taking control of Hodlnaut last month.Among the concerns raised by managers were the absence of a cash injection or assets with readily available liquidity, such as Bitcoin or Ether. Furthermore, there was no clear timeline provided for the repayment of creditors’ debts, and the proposal lacked detailed information regarding payments, which are limited to just 30% of liabilities, according to the court-appointed supervisors of Hodlnaut’s restructuring.FLEX token offeringThe FLEX token, associated with the CoinFLEX exchange, whose founders Mark Lamb and Sudhu Arumugam launched OPNX earlier this year, is at the center of the proposal. Currently, it holds a market value of approximately $54.4 million. However, its trading volume remains low. Moreover, its unit value stands at $0.55, marking a substantial 95% decrease from a month ago when the offer was first submitted to the Singapore court, as per data from CoinGecko.The deal would have meant OPNX taking a 75% stake in the business. Previously, Hodlnaut’s founders Simon Lee and Zhu Juntao had put forward a proposal of a business sale rather than liquidating the company as the preferred option.Su Zhu and Kyle Davies, co-founders of Singapore’s Three Arrows Capital, played instrumental roles in the inception of OPNX, joining with the CoinFLEX founders in establishing the bankruptcy claims trading platform. Despite their initial contributions, it’s worth noting that Zhu has previously clarified that neither he nor Davies are involved in the day-to-day management of the exchange.Regulatory sanctionsIn recent developments, Zhu and Davies were sanctioned with a nine-year ban by the Monetary Authority of Singapore due to violations connected to their collapsed hedge fund firm, which operated out of Singapore. Furthermore, in August, authorities in Dubai levied fines against Zhu, Davies, Mark Lamb, OPNX CEO Leslie Lamb, and Arumugam for operating and promoting OPNX without the required local license.The rejection of OPNX’s bid by Hodlnaut’s bankruptcy administrators underscores the challenges implicated by illiquid tokens. The fate of Hodlnaut remains uncertain, pending further developments in the ongoing legal proceedings, and will depend upon its management’s efforts in finding a new buyer for the business.

Former Coinbase Japan CEO Joins Fidelity-Backed VCWell-known investment firm Eight Roads Ventures has recruited the former CEO of Coinbase Japan to join them as a partner within the firm.Eight Roads Ventures, a prominent investment firm backed by Fidelity with assets worth over $11 billion, has announced the hiring of Nao Kitazawa as a venture partner. Kitazawa brings a wealth of expertise and experience garnered at Coinbase Japan and elsewhere in the digital assets industry to the firm.In a recent LinkedIn post, Kitazawa expressed his excitement about joining Eight Roads Ventures to pursue his passion for fintech and Web3. He acknowledged the firm’s successful track record of supporting innovative and disruptive companies and considered it an honor to be part of such an organization.Photo by Marten Bjork on UnsplashCoinbase exited JapanKitazawa’s tenure at Coinbase Japan came to an end earlier this year, coinciding with Coinbase’s decision to exit the Japanese market due to prevailing “market conditions.” His appointment at Eight Roads Ventures indicates the increasing interest and involvement of Fidelity, the firm’s backer, in the cryptocurrency space.Fidelity has been making significant strides in the crypto industry. EDX Markets, a crypto exchange backed by Fidelity, recently announced its launch despite regulatory challenges from the United States Securities and Exchange Commission (SEC) and a bearish market environment.TradFi heavyweight in cryptoFidelity is probably the standout heavyweight firm from traditional finance which has stepped foot in the crypto space from early on. It has done so through Fidelity Digital Assets, its crypto arm. The subsidiary company quietly rolled out its trading platform this year, providing millions of users with commission-free trading of bitcoin and ether. Additionally, Fidelity has been expanding its crypto research team, demonstrating its commitment to the industry.Headquartered in Bermuda, Eight Road Ventures positions itself as a global venture capital firm that helps entrepreneurs scale. It backs and partners with game-changing technology and healthcare companies, with a presence in China, Europe, India, and Japan.Eight Roads has also been actively investing in various crypto startups, including Fireblocks and Kaiko. Kitazawa’s appointment is expected to bring significant value to the firm’s portfolio, leveraging his knowledge and insights gained from working in the cryptocurrency sector.Originally known as Fidelity Ventures, Eight Roads Ventures has been involved in investments since 1969, initially operating out of Boston. Recently, it launched a $350 million technology investment fund in China and a $250 million healthcare and life sciences fund in India, demonstrating an interest in pursuing emerging opportunities in Asia.Shifting strategic focus overseasWith the addition of Nao Kitazawa as a venture partner, Eight Roads Ventures reinforces its position as a leading investment firm with a keen interest in the evolving landscape of fintech, Web3, and cryptocurrencies. It’s likely that the firm recognizes what way the regulatory winds are blowing, and with that, it’s bringing on board someone of Kitazawa’s caliber, with expertise outside of the US.Against the backdrop of a currently adverse regulatory environment in the US, earlier this month US VC giant Andreessen Horowitz (a16z) opened its first international office in London, in what many perceived to be a move towards a more regulatory progressive environment relative to the emerging digital assets sector.