Crypto exchange Flybit passes post-audit for ISMS-P certification

Indonesia’s Financial Regulator Appoints Hasan Fawzi to Oversee CryptoThe Financial Services Authority (OJK) of Indonesia has chosen Hasan Fawzi, a former executive of the Indonesia Stock Exchange (IDX), as the head of fintech and digital assets oversight and innovation.That’s according to a number of reports published in local and regional news outlets on Thursday. Fawzi, who has served as the Director of the Indonesia Bond Pricing Agency (IBPA) since 2008, brings a wealth of experience in the securities pricing sector. Alongside Fawzi, Lodewik Paulus Agusman, previously responsible for the internal audit department at Bank Indonesia, has also been elected as a member of the OJK Board of Commissioners. These appointments were approved by the House of Representatives Commission overseeing banking and finance.Photo by Tom Fisk on PexelsDigital asset oversightFawzi’s role as the Executive Director for the Supervision of Technological Innovation in the Financial Sector, Digital Financial Assets, and Crypto-assets places him in charge of overseeing peer-to-peer lending platforms, cryptocurrencies, and other components of the evolving industry.Indonesia’s stance on cryptocurrencies remains complex and multi-faceted. While the country is striving to launch a state-backed crypto exchange by mid-2023, as announced by Didid Noordiatmoko, head of the Commodity Futures Trading Regulatory Agency (Bappebti), recent statements by Bali Governor Wayan Koster suggest a tightening of regulations concerning crypto payments.Governor Koster emphasized that foreign tourists who use cryptocurrencies for payments, violate visa provisions, or engage in unauthorized activities will face strict consequences. The Bali Representative Office of Bank Indonesia reiterated that while cryptocurrencies themselves are legal in Indonesia, their use as a payment instrument is not.The appointment of Hasan Fawzi to OJK demonstrates Indonesia’s strategic efforts to strengthen oversight and foster innovation within the fintech and digital asset sectors. Fawzi’s extensive experience in securities pricing and leadership in the Indonesia Stock Exchange make him a valuable addition to the regulatory landscape. As Indonesia navigates the complexities of cryptocurrency usage, it will be fascinating to observe the evolution of regulations and how the country’s financial authorities shape the future of the industry.Controlled innovationThese recent developments highlight Indonesia’s determination to stay at the forefront of financial technology albeit with efforts to retain strict controls over the rollout of that innovation. The country recognizes the importance of effectively regulating emerging technologies while fostering an environment conducive to innovation. With Fawzi at the helm of fintech and digital assets oversight, the OJK aims to strike a balance that protects investors and consumers while promoting technological advancement.As these appointments await final approval from President Joko Widodo, the financial industry and crypto enthusiasts will closely watch Indonesia’s regulatory landscape. The decisions made in the coming months will shape the future of fintech and crypto in the country. Indonesia’s approach to this dynamic sector serves as a case study for other nations seeking to establish oversight and embrace the potential of digital assets. Their international regulatory peers will be monitoring efforts in Indonesia to bring about effective regulation of the digital assets space.

Mohammed AlKaff AlHashmi, co-founder of the HAQQ Network, has expressed the view that Indonesia has considerable potential to establish itself as Asia’s largest crypto hub. AlHashmi made the comments in a discussion with Crypto.news. HAQQ Network claims to be a scalable proof-of-stake-based blockchain, capable of high throughput. The network is fully compatible and interoperable with Ethereum. The project also focuses on the development of a Sharia-compliant Web3.  While the project is headquartered in Niqa Al Dheeb in the United Arab Emirates (UAE), Indonesia is also a significant market for the company, given that it has just received regulatory approval for the HAQQ Network’s native token from the Indonesia Financial Services Authority (OJK). Islamic Coin (ISLM) is the network’s native token. It is being offered as a Sharia compliant digital currency, with Sharia law being the Islamic legal system that governs the lives of millions of Muslims throughout the world.Photo by Nick Agus Arya on UnsplashGateway marketOffering his thoughts on the Indonesian crypto market, AlHashmi stated: “When we look at Indonesia as a market, I would say it is incomparable. It can be number one to be honest. Because I have seen statistics of growth happening in a very big volume. The volume of trade, transactions and users, I think Indonesia can be very soon one of the top 3 countries in the world.” Indonesia takes on added importance for the HAQQ Network project. The project’s co-founder sees the Southeast Asian nation as a gateway into a broader market given that it has the largest Muslim population in the world. He said that if his project is successful in Indonesia, then there will be no barrier to enter markets in other predominately Muslim nations. The entrepreneur believes that Indonesia is on the cusp of realizing its potential within the crypto sector. He said that Indonesia has a “competitive edge” when compared with other nations. Population size and rapid economic growth feed into that potential, with AlHashmi claiming that Indonesia is primed to become the largest crypto hub in Asia. Smooth regulatory processFrom a regulatory perspective, he also feels that Indonesia is outperforming other jurisdictions. The HAQQ Network project team experienced a smooth process in acquiring regulatory approval for ISLM recently. He believes that although the process was detailed, it was completed quicker than he would expect in other countries.  AlHashmi added that “regulations are flexible enough to enable project owners to do good business to protect the community as well.” Local regulator, the OJK, has expressed an interest in exploring the development of Sharia-compliant crypto assets. Earlier this month, Hasan Fawzi, OJK's executive head overseeing crypto assets supervision, told local media that the regulator is open to advancing Sharia-based cryptocurrencies.  Hasan stated: “Globally and regionally, this is a common practice. It is not unusual to create crypto assets that adhere to Sharia principles.” The OJK executive is particularly interested in tokenization of real-world assets (RWAs). He believes that if this proves to be successful, it could lead to further Sharia-complaint crypto products being launched. The OJK is currently testing tokenized RWAs within a sandbox environment.

Hong Kong’s Bricks-and-Mortar Crypto Shops Attract Chinese VisitorsHong Kong has become a thriving destination for cryptocurrency enthusiasts, particularly mainland Chinese visitors, due to the ambiguity surrounding the regulatory status of these crypto shops.Despite the illegality of cryptocurrency transactions on the mainland and the ban on overseas exchanges serving onshore clients, Hong Kong allows legal crypto trading, and according to a recent report published by the Financial Times, the autonomous Chinese territory is being accessed by residents of the Chinese mainland for the purpose of trading crypto.Photo by Chapman Chow on UnsplashSurging demandBricks-and-mortar crypto shops, lightly regulated and scattered across the city’s popular tourism and shopping districts, have flourished thanks to the surging demand from mainland Chinese visitors. These stores offer customers the convenience of purchasing digital assets with cash, often without the need to disclose the source of funds or personal information.In contrast to the strict licensing requirements imposed on online exchanges in Hong Kong’s push to become a virtual assets trading hub, these over-the-counter (OTC) crypto stores provide customers with the opportunity to buy large volumes of cryptocurrencies with minimal or no verification checks.Before the border between China and Hong Kong reopened fully in February, mainland Chinese customers accounted for less than 5% of customers at Crypto HK, an OTC crypto outfit with two branches in the city. However, this figure has now increased significantly, making up around half of their customer base.Similarly, One Satoshi, a crypto store with nine branches in Hong Kong, reported trading volumes between January and May 2023 that were 20–25% higher than the same period the previous year. They anticipate a 35–40% increase in trading for the entire year.While some store owners, like Roger Li of One Satoshi, currently decline mainland Chinese customers due to Beijing’s crypto ban, they remain optimistic that restrictions will ease. This belief is prevalent among the crypto community in Hong Kong following the city’s announcement to become a virtual assets hub in October.Regulatory anomalyHong Kong introduced a new regulatory framework for cryptocurrency exchanges in June, requiring all online platforms operating in the city to apply for a license. However, most OTC stores still operate outside the purview of Hong Kong’s Securities and Futures Commission (SFC), presenting an area of further consideration for the government.OTC stores primarily serve as a simple way for users to convert money to and from unlicensed online exchanges, according to Carlton Lai, head of blockchain research at Daiwa Capital Markets. Hong Kong’s lenient regulations and ease of starting such businesses, as long as there is sufficient capital, contribute to the higher number of OTC stores compared to other locations.While some shops welcome increased regulation in the sector, others do not require customers to provide identification, promoting quick and anonymous transactions. However, this falls short of the investor protection measures mandated for online platforms seeking licenses to trade cryptocurrencies to retail clients.The lack of scrutiny faced by Hong Kong’s OTC shops, coupled with their proximity to mainland China — a market that ranked fourth globally for crypto trading in 2022 — makes them appealing to Chinese citizens still interested in the asset class.