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Oman’s Regulator Invites Feedback on Virtual Asset FrameworkProgressing toward the establishment of its own virtual asset regulations, the Sultanate of Oman is embarking on a significant step by soliciting public feedback on its comprehensive framework.The framework, which governs digital assets, is being developed by the Capital Market Authority (CMA) of Oman. The move reflects the country’s commitment to creating a robust regulatory environment for the virtual asset sector.The CMA’s consultation paper, released last week, outlines the agency’s objectives in crafting this regulatory framework. It aims to provide a viable financing and investment avenue for issuers and investors while also addressing the inherent risks associated with the virtual asset class. Central to this initiative is the integration of business requirements and measures to prevent market abuse.Photo by Niklas Weiss on Unsplash26 key questionsAt the heart of this regulatory endeavor are 26 crucial questions presented to industry stakeholders. Their valuable input will help shape the framework’s core components. These include provisions related to regulatory standards and licensing prerequisites for virtual asset service providers (VASPs), corporate governance, risk management, and the issuance of virtual assets.The proposed framework, as disclosed in the consultation paper, encompasses a spectrum of digital assets. This spans utility tokens, security tokens, fiat-backed and asset-backed stablecoins, and other currencies adhering to the Financial Action Task Force’s (FATF) definition of virtual assets. However, a noteworthy proposal that has garnered attention is the potential prohibition of privacy coins issuance, a decision pending public feedback.Aiming to reinforce accountability and stability, the CMA may mandate that VASPs establish a local presence in Oman through legally recognized entities and physical offices. Additionally, minimum capital requirements could be imposed on these entities. The envisaged framework may also stipulate that virtual asset firms maintain a low percentage of assets in hot wallets, conduct audits of safeguarded assets, and provide evidence of reserves.Shaping regulation through feedbackWith the consultation phase set to conclude on August 17, the public’s valuable feedback will shape the direction of Oman’s virtual asset regulations. The most salient viewpoints may find their place on the CMA’s official website. Following this consultation period, the CMA will proceed to finalize the regulatory framework.Although the public announcement regarding the launch of a regulatory framework was made on February 14, Oman’s journey toward regulating the virtual asset industry began well before. In November 2020, the National Committee for Combating Money Laundering and Terrorist Financing initiated discussions on forming a task force.Comprising officials from the CMA and the Central Bank of Oman, the task force explored whether to permit or prohibit virtual asset activities. Subsequently, in December 2022, consultants were engaged to facilitate the establishment of this new regulatory landscape.The United Arab Emirates, and in particular, the individual emirates of Dubai and Abu Dhabi, have led the way in the Middle East in progressing a workable framework for the digital asset industry. Oman’s proactive approach is following the example set by its regional peer.Shaping its virtual asset framework underlines its desire to foster innovation while ensuring the integrity of its financial landscape. Its latest effort in seeking public feedback is a positive development that should assist it in arriving at a progressive framework.

Dunamu Loses Lawsuit Seeking $19M in Corporate Tax Refunds After Venture Status RemovalDunamu, the operator of South Korea’s largest cryptocurrency exchange Upbit, lost a 24.8-billion-won (approximately $18.7 million) corporate tax lawsuit, according to local news outlet The Korea Economic Daily. This legal action emerged after Dunamu was removed from the list of registered venture firms in December 2018. The Seoul Administrative Court ruled that since Dunamu was no longer a venture, it was not eligible for the associated tax benefits.Photo by Tingey Injury Law Firm on UnsplashLosing venture statusIn September 2017, Dunamu obtained certification as a venture company from the Ministry of SMEs and Startups. However, this certification was revoked in December of the following year. This revocation was due to an amendment to the Enforcement Decree of the Venture Businesses Act in October 2018, which resulted in the exclusion of “blockchain-based crypto asset trading and brokerage” from the venture business classification. Consequently, the withdrawal of this certification rendered the company ineligible for government tax incentives.Tax refund request deniedIn August 2020, Dunamu took action by formally requesting a refund of KRW 24.8 billion in taxes previously paid to the tax office. The foundation of its claim rested on its entitlement to venture company tax benefits up until the corporate tax period of 2018. However, its request was turned down, leading Dunamu to escalate the matter by initiating an administrative case against the tax authorities, following an unfavorable decision by the Korean Tax Tribunal.Meanwhile, an amended version of the Act on Special Cases Concerning Taxation Restrictions, which excluded cryptocurrency-related industries from benefiting from tax reductions, went into effect in January 2019. Pointing to the effective date of this act, Dunamu argued that the company should be entitled to benefits applicable up until the corporate tax cycle of 2018. Furthermore, Dunamu highlighted its legal action, which had led the administrative court to suspend the effects of the venture company certification revocation from December 31, 2018, to January 18, 2019.Court’s stanceDespite these arguments, the court rejected Dunamu’s argument and upheld that tax relief could not be granted for the tax year encompassing the date of the removal of its venture status. Additionally, the court affirmed that the tax authorities’ decision was valid since the venture status had been revoked in 2018, regardless of the amended Taxation Act’s implementation.In disagreement with the court’s ruling, Dunamu has filed an appeal against the decision.

Kazakhstan’s central bank has begun testing a stablecoin tied to the national currency, advancing a broader plan to modernize the country’s financial infrastructure. According to Cointelegraph, the pilot, run inside the National Bank of Kazakhstan’s Digital Assets Regulatory Sandbox, introduces Evo, a token with the ticker KZTE that is built on Solana and backed by the tenge. Intebix, a local crypto exchange, and Eurasian Bank are issuing KZTE. Mastercard is preparing connections that would link the token with major stablecoin issuers worldwide. The central bank is not minting the asset, but it is providing the regulatory framework that allows the token to be created and tested. Intebix founder Talgat Dossanov said the initiative is the first instance of the monetary authority directly engaging in the process of stablecoin issuance.Photo by GuerrillaBuzz on UnsplashBuilding a national crypto ecosystemEarly use cases focus on practical payments and on-ramps. The token is designed to widen the bridge between crypto and fiat, support conversions on exchanges, and enable spending through crypto cards. Officials described the pilot as a building block in a national digital asset ecosystem that aims to nurture new financial tools and deepen the local market. The program aligns with guidance from President Kassym Jomart Tokayev, who in a Sept.  8 address urged faster development of a comprehensive digital asset environment. He called for a new banking law to boost competition, attract new players, strengthen fintech, and ease the circulation of digital assets. Tokayev also cited progress with the digital tenge, already in use to finance projects through the sovereign wealth fund, and proposed creating a state crypto fund under the central bank’s investment arm to launch a strategic reserve of promising tokens. USD stablecoin accepted as regulatory feesRegulatory efforts extend beyond the sandbox. On Sept. 4, the Astana Financial Services Authority (AFSA), the independent regulator of the Astana International Financial Centre (AIFC), launched a pilot that lets companies based at the center pay regulatory fees using stablecoins backed by the U.S. dollar. More than 4,000 firms from over 80 countries are registered at the AIFC, and Bybit was the first to sign a multilateral memorandum of understanding with the regulator. Under the fee pilot, licensed Digital Asset Service Providers may join as Providers and act as agents for payers who choose to settle obligations to the regulator with stablecoins. AFSA chief executive Evgeniya Bogdanova said the initiative is meant to position the financial center as a hub for digital finance and to keep pace with global trends in stablecoin adoption. Together, the sandbox stablecoin, the digital tenge rollout, and the AIFC payments pilot signal a coordinated push to make digital assets a larger part of Kazakhstan’s financial system. Authorities are testing how these tools can operate within clear rules, with an eye to drawing investment and keeping the country connected to fast-moving changes in global finance.