Japan’s Blockchain Group Requests Crypto Tax Revision for Web3 Adoption

CMB International Securities, the brokerage and investment banking arm of China Merchants Bank (CMB), has acquired a virtual asset trading license and rolled out related trading services in Hong Kong.Photo by Traxer on UnsplashFirst Chinese bank-affiliated brokerage to add crypto servicesThe development is significant as it marks the entry of the first brokerage firm directly affiliated with a Chinese bank into the digital assets arena. It takes on further significance due to the importance of its parent company within financial services in Asia.Recent reports suggest that China Merchants Bank has assets under management (AUM) of RMB 15 trillion, equating to around $2.1 trillion. Headquartered in Shenzhen, the bank is China’s seventh largest in terms of AUM. Compared globally, an S&P Global Market Intelligence report published in 2024 positioned the bank in 25th place by measure of AUM. CMB International Securities disclosed that it started offering such services on Aug. 18 via a post on the Chinese social media platform WeChat. It explained that the launch followed the company’s acquisition of an upgrade to its existing trading license from Hong Kong’s Securities and Futures Commission (SFC) on July 11, authorizing the brokerage to offer virtual asset trading. 24/7 digital asset tradingThe company outlined that it has added virtual asset trading via its mobile application, offering qualified investors 24/7 digital asset trading. Following the launch, eligible investors can now trade Bitcoin (BTC), Ethereum (ETH) and the USDT stablecoin. These professional or eligible investors must open a CMB International Securities cash account before they can commence trading digital assets on the CMB platform. Given the ongoing ban on crypto trading activity within mainland China, CMB International has to ensure that its product offering doesn’t reach mainland residents. At the time of the company being awarded its virtual assets trading license last month, Hong Kong Web3 Association Co-Chair Joshua Chu spoke to that requirement. He stated:“By securing this licence, CMBI gains regulated access to Hong Kong’s dynamic crypto market, yet it must operate within strict boundaries that prevent direct mainland participation, reflecting the delicate balance of innovation and legal constraint.” ‘One country, two systems’“One country, two systems” is a constitutional principle of the People’s Republic of China that enabled the reunification of Hong Kong with China back in 1997. Many believe that while Beijing continues to impose a ban on crypto and hasn’t been vocal in its support of Hong Kong’s embrace of the crypto sector, there is an implied support nonetheless of Hong Kong’s development as a crypto hub.Hong Kong’s separate system allows China to let it develop as a proving ground for virtual assets. That tacit support has encouraged companies like Beijing-headquartered Tiger Brokers to pursue virtual asset trading licensing within the Chinese autonomous territory. Similarly, Victory Securities, a Hong Kong firm with a significant presence within the mainland Chinese market, has also pursued digital asset-related licensing in Hong Kong. This isn’t CMB International’s only crypto-related venture. Earlier this month, the company partnered with Singaporean digital asset exchange DigiFT in launching the Hong Kong-Singapore Mutual Recognition Fund. The development marked the first money market fund to be hosted on the Solana blockchain. 

Korea’s Code Launches System to Detect Blacklisted Crypto WalletsCode, the only Travel Rule solution provider in South Korea, announced on Monday the launch of Protector, a detection system designed to identify blacklisted wallets in the cryptocurrency space. Established by a collaboration between three major Korean cryptocurrency exchanges (Bithumb, Coinone, and Korbit), Code aims to enhance security and compliance in the industry.Photo by Mariia Shalabaieva on UnsplashTravel RuleThe Travel Rule is a regulation that requires financial institutions to share information with each other about transactions to ensure their legitimacy and to prevent money laundering, terrorist financing, and other illicit activities.Wallet risk assessmentsThe Protector system of Code allows its members to assess risks associated with external wallets and take appropriate measures during the withdrawal and deposit of virtual assets. Risks will be categorized into three levels, represented by the colors white, gray, and black. A white designation signifies a normal status, gray serves as a warning, and black indicates a danger.Not only does Protector enable members to manage risks linked to crypto wallets more effectively, it also allows them to monitor the management status of Code’s Travel Rule.Streamlining regulatory complianceCode CEO Lee Sung-mi stated that the recently launched Protector system is designed to streamline regulatory compliance for Code members. By utilizing Protector, members can concentrate on their projects without being burdened by compliance concerns. Lee also emphasized that Code is committed to expanding its range of services for members in the future.The detection system was developed and is operated in partnership with Uppsala Security, a Singapore-based cybersecurity company specializing in blockchain-powered solutions.

Hong Kong regulator, the Securities and Futures Commission (SFC), which oversees Hong Kong’s securities and futures markets, is understood to be planning to give the go-ahead for crypto derivative products to be offered to professional investors within the Chinese autonomous territory. Chinese English-language newspaper China Daily reported on June 4 that the proposed move forms part of Hong Kong’s efforts to expand its digital assets-related product offering in order to further bolster its position as a leading regional hub for the sector. Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, told the publication that the SFC will open up crypto derivatives trading to professional investors in the city “in an orderly, transparent and secure manner.”Photo by Florian Wehde on UnsplashBoosting liquidity to spot marketsChina Daily claimed that the SFC outlined that the crypto derivatives product will enable efficient risk transfers, while boosting the liquidity of the underlying spot markets. TokenInsight data suggests that the global crypto derivatives market has reached $21 trillion in trading volume over the course of Q1 2025. By comparison, derivatives trading dwarfs spot trading, given that spot trading weighed in at just $4.6 trillion over the same period. Liquidity in the underlying spot markets can be enhanced by a broadening of crypto derivatives product offerings in instances where digital assets are traded for immediate payment and delivery. Their availability will also appeal to professional traders and investors who need access to derivatives as part of their overall strategies in order to hedge positions and add leverage when required. Industry interestReaction to news of the Hong Kong SFC’s plans has largely been positive. Back in February, Jean-David Péquignot, chief commercial officer (CCO) with the world’s largest crypto derivatives exchange Deribit, told the South China Morning Post that opening up availability of crypto derivatives products was the one item missing from Hong Kong’s push towards development as a hub for the digital assets sector. At the time, he stated:“Hong Kong is this central financial hub in the world and a big one in Asia. If regulators can solve the derivatives piece, it is a place where we love to be.” On that basis, Péquignot suggested that Deribit, headquartered in Dubai, would be interested in establishing itself in Hong Kong, suggesting that “Asia is a big market for derivatives.” He added:“We want to be in Asia. We just need to find the right place and time to engage with regulators and get a regulatory framework to work with.” The company’s acquisition by Coinbase was announced last month for $2.9 billion. Regulatory approach questionedWhile many see the move towards the approval of crypto derivatives in Hong Kong as bullish, not everyone perceives the regulator’s approach in this instance to be positive. Pseudonymous crypto trader “Pickle Cat” outlined on X that “opening crypto derivatives only to 'professional investors' isn’t progress.”  The trader points out that good regulation would concentrate on controlling issuance and not circulation. Suggesting that the SFC has missed the point in its approach, the trader claims that the regulator would serve the crypto derivatives market best by verifying what backs such products while not restricting how such tokens move.