Regulatory breach sees Philippines initiate blockade on Binance

Taiwan’s Financial Supervisory Commission (FSC), the independent government agency that regulates activity within Taiwan’s securities, virtual assets, banking and insurance sectors, is planning to invite applications from financial institutions to participate in a crypto custody services pilot program, scheduled to commence in Q1 2025. The Central News Agency (CNA), the national news agency of the Republic of China, published a report on Oct. 8, outlining the FSC’s intentions with regard to this crypto custody pilot program. The media outlet confirmed that three Taiwanese banks had expressed an interest in participating in the program.  The Director of the FSC’s Comprehensive Planning Division, Hu Zehua, outlined at a press conference that the regulator is planning to provide further information relative to the pilot program 15 days in advance of inviting applications from prospective participants. Photo by 張 峻嘉 on UnsplashPublic consultationAdditionally, the FSC executive outlined that the regulator intends to collect feedback from the public relative to the proposed pilot program, and fine-tune the process based upon that feedback. Hu stated that he recognizes that based on crypto custody activity carried out overseas, operational security is of paramount importance. Therefore, the FSC is interested in placing emphasis on this aspect of the activity as part of the pilot program.  Illicit funds and money laundering is another area of concern. With that the FSC executive outlined that financial institutions must proactively block virtual assets that are found to originate from illicit sources. In August a Taiwanese couple was indicted for laundering around $50 million in illegal funds through cryptocurrencies. Earlier this month, the FSC revised Taiwan’s regulatory framework relative to anti-money laundering (AML). The update now requires digital assets firms to register with the Taiwanese government by no later than September 2025. Failure to do so may result in these crypto companies being fined up to $156,000 or company executives facing up to two years in prison. Bitcoin, Ethereum and Dogecoin mentionedPilot program applicants will be expected to specify the type of digital assets they intend to custody. Explanatory information released by the FSC gave Bitcoin, Ethereum and Dogecoin as examples. Additionally, applicants are required to outline the type of client they will cater towards in providing a crypto custody service. Among the examples mentioned were virtual asset platforms, professional investors and general investors. The FSC announced at the end of last month that professional investors are now permitted to access foreign virtual asset exchange-traded funds (ETFs) and invest in them through a re-entrustment method. Taiwan has been making progress recently in bringing about regulatory clarity and establishing conditions within which Web3 companies can develop. The FSC had been working towards the production of draft crypto regulations over recent months. This followed a move by Taiwanese legislators in October 2024 to introduce the Virtual Asset Management Bill to parliament, with the objective of strengthening customer protections and establishing industry supervision. In September, the regulator released guidelines, including a measure which bans overseas crypto platforms from operating within the country. 

Chinese Court Recognizes Virtual Assets as Legal PropertyAccording to a recent report published by the People’s Courts of the People’s Republic of China, a Chinese court has recognized the legal status of virtual assets, having analyzed their attributes within the framework of Chinese criminal law.The court unequivocally stated that virtual assets are considered legal property under the current legal policy framework and are thus protected by law.The People’s Courts of the People’s Republic of China exercise judicial power independently, free from interference by administrative or public organizations. They have responsibility for adjudicating civil, criminal, and administrative cases.Photo by Christian Lue on UnsplashProperty classificationLocal news source Odaily News reported on the development on Friday, indicating that the report, titled “Identification of the Property Attributes of Virtual Currency and Disposal of Property Involved in the Case,” explicitly recognized the economic attributes of virtual assets, leading to their classification as property.This declaration is particularly significant in light of China’s sweeping ban on decentralized cryptocurrencies. Despite this ban, the report argues that virtual assets held by individuals should enjoy legal protection within the existing policy framework.Furthermore, the report proposed recommendations for addressing crimes involving virtual assets. It emphasized that in cases where money and property are involved, confiscation should be based on the integration of criminal and civil law. The approach taken aims to strike a balance between safeguarding personal property rights while also addressing broader social and public interests.Contentious approach to cryptoWhile China has been making every effort to promote its central bank digital currency (CBDC) and the development of blockchain and metaverse-related technology within the country, its stance on decentralized cryptocurrencies has been contentious at best.Its approach in that respect has been marked by a blanket ban on crypto-related activities such as mining and trading and the prohibition of foreign crypto exchanges from serving customers within mainland China. Nevertheless, Chinese courts have consistently taken a more nuanced view without necessarily contradicting the government’s approach.Differing interpretationsThe divergence between national policy and court rulings first emerged in 2019 when the Hangzhou Internet Court found that Bitcoin is a form of virtual property, and on that basis, it is safeguarded by the law from the point of view of property rights. In May 2022, a Shanghai court affirmed that Bitcoin qualifies as virtual property and, as such, falls under the purview of property rights.Global issueIt’s not just the Chinese courts that are grappling with the issue of clarifying property rights relative to virtual assets. In April of this year, a case in Hong Kong involving defunct crypto exchange Gatecoin resulted in the courts determining that cryptocurrency is property and that on that basis, it’s “capable of being held in trust.”In July a Singaporean court determined that cryptocurrency is capable of being held in trust and on that basis, it should be recognized as property. Earlier this year, the High Court of Justice in London recognized non-fungible tokens (NFTs) as property.The report from the People’s Court reaffirms the legal status of virtual assets as protected property under Chinese law. This development highlights the ongoing divergence between China’s regulatory policy and the judicial interpretation of virtual assets, signaling a potential evolution in the country’s approach to cryptocurrencies.

International Holding Company (IHC), based in the United Arab Emirates, has green-lit the launch of 2PointZero, a holding company encompassing a diverse array of companies, marking a significant stride into various industries, including the burgeoning crypto ecosystem. Photo by Kevin Villaruz on PexelsIHC announced the launch of 2PointZero via a press release published to its website recently. The new holding company boasts a combination of entities with a cumulative asset value exceeding $27 billion, pending completion after securing all necessary regulatory approvals. IHC is one of the Middle East and North Africa’s (MENA) largest conglomerate companies. Founded in 1998 in Abu Dhabi, it contains 422 subsidiary companies with eight of them listed on the Abu Dhabi Stock Exchange Market (ADX). Business interests span sectors such as real estate, healthcare, food and beverage, industrial, IT and communications and agriculture.Tahnoon bin Zayed Al Nahyan, Chairman of IHC, expressed pride in announcing the formation of 2PointZero, positioning it as a next-generation holding company at the forefront of pioneering advancements across multiple sectors. The new holding company will concern itself with sectors that include private equity and alternative investments, venture capital operations, asset management, micro financing and insurance. Digital and cryptocurrency ecosystems is another sector that 2PointZero will invest in. Crypto mining interests2PointZero Holding will incorporate entities such as Chimera Investments, Lunate, Beltone, International Resources Holding (IRH), and Sagasse Investments. Within Lunate, one of Abu Dhabi’s newest funds, lies Citadel Technologies. Citadel stands as a key player in the cryptocurrency mining sector, operating a state-of-the-art crypto mining facility in Abu Dhabi. Specializing in Bitcoin mining, Citadel is committed to sustainable and efficient mining practices, benefiting from its strategic location in the UAE and leveraging the region's advanced infrastructure. In the fiscal year 2022, Citadel reported a revenue of AED 100 million with assets totaling AED 2.7 billion. IHC recently acquired a 10% stake in Phoenix Group, the manager of the "Citadel Project," solidifying Citadel's position as the largest crypto-mining facility in the Middle East. Potential to expand crypto-related investmentsBack in 2022, IHC had outlined its strategy to expand into new growth areas and to grow its digital assets portfolio. In December, an IHC subsidiary, Sirius International Holdings, formed a partnership with Indian infrastructure company Adani Group with a view towards developing AI, internet of things (IoT) and blockchain-based services and solutions. This recent development is encouraging in terms of the potential for far greater crypto-centric investment, given the size of the UAE-based entity. The press release states:”The 2PointZero portfolio, which is expected to surpass AED 100 billion in assets, reflects its commitment to excellence and strategic growth in the digital and crypto ecosystems, resource management, and beyond.” Al Nahyan emphasized 2PointZero's commitment to transformative global impact, particularly in areas such as technology, artificial intelligence (AI), financial services, investment banking and resource management. The vision extends beyond boundaries, with a mission to build sustainable ecosystems that empower communities, foster technological excellence and ensure financial resilience.