HashKey secures $30M in funding from Chinese VC firm

Taiwanese cryptocurrency exchange under investigation for money launderingBitgin, a cryptocurrency exchange in Taiwan, is currently under police investigation for alleged money laundering, with its Chief Operating Officer, Yuting Zhang, arrested in connection to the infamous “88 Guild Hall” money laundering incident. The exchange is cooperating fully with the investigation and has assured users that its operations remain unaffected.Photo by Adam Jang on Unsplash‘88 Guild Hall’ scandalThe “88 Guild Hall” scandal, which unfolded from late 2021 to March 2022, implicated Zhang in a massive money laundering network. The controversy exposed a multi-billion dollar operation orchestrated by local businessmen Zhemin Guo and Chengwen Tu, utilizing a network of foreign exchange offices and crypto exchanges.Yuling Tsai, General Counsel of the Taiwan VASP Association, addressed the situation, stating: “This time, a member of the preparatory group was involved in the investigation case. The preparatory group immediately held a meeting and issued a public response. The members involved in the case also took the initiative to suspend participation in the work of the preparatory group.”Business as usualIn an official statement, Bitgin confirmed Zhang’s association with the scandal and clarified that the ongoing investigation has not disrupted its operations. The exchange emphasized its commitment to cooperating with authorities, providing all necessary assistance to facilitate a smooth investigation process.The statement reads: “At present, Bitgin is fully cooperating with the investigating unit and actively providing all necessary assistance to ensure the smooth conduct of the investigation and hopes that the facts can be clarified as soon as possible.”Bitgin also confirmed that in light of the charges, the COO has ceased all communications with counterparties.Focus on regulationTaiwan’s Financial Supervisory Commission (FSC) outlined earlier this year its intention to restrict the activity of non-compliant offshore crypto exchanges. While cryptocurrency exchanges are not officially regulated yet, local operators have taken cues from the FSC to move towards self-regulation. A preparatory group was formed in September with Bitgin participating as a founding member.While Taiwan still doesn’t have a regulatory framework in place, it has applied anti-money laundering (AML) regulation to crypto businesses. In August, leading crypto exchange Binance initiated steps to register for AML compliance in Taiwan.Earlier this year, Taiwanese officials suggested that they would foster self-regulation while proposing the classification of crypto regulations within their own unique business category. Efforts were furthered last month when legislators introduced a cryptocurrency bill for its inaugural reading.JPEX falloutBeyond Bitgin, Taiwan is grappling with the fallout from wayward crypto exchange JPEX, which is accused of orchestrating Hong Kong’s largest financial scam. The authorities raided the local office of JPEX and identified suspects involved in the alleged fraud. To compound matters, local police also uncovered a $320 million crypto money laundering operation earlier this month.The incidents highlight the ongoing challenges faced by regulators in the region as they strive to protect investors from fraudulent activities.As the investigation unfolds, the Taiwanese cryptocurrency industry, along with its self-regulatory initiatives, remains under scrutiny, emphasizing the broader need for regulatory frameworks to safeguard the interests of investors and maintain the integrity of the market.

Sygnum Bank, a digital asset bank based in Switzerland and Singapore, has conducted a survey which has identified that investors in Singapore are more interested in increasing their allocation to crypto than their international peers. The bank’s 2024 Future Finance survey states that while a global average of institutional investors of 47% plan to increase their exposure to crypto next year, in the case of Singapore-based institutional investors, 57% of them expressed the view that they would increase their crypto holdings in 2025.Photo by Precondo CA on UnsplashThe report states:  "Singapore investors exhibit a higher risk appetite and motivation to invest on average than respondents from other countries.” The annual survey, which was published on Nov. 14, collated insights garnered from more than 400 institutional and professional investors, distributed across 27 countries, with average investor experience of in excess of 10 years. 121 of the survey’s participants were based in Singapore, with the survey having been conducted during Q3 2024. Long-term confidenceSingaporean respondents suggested that they were confident in the long-term potential and outlook where cryptocurrencies are concerned. While the main reason for investing in crypto was to gain exposure to digital assets in line with a global trend (56%), 41% of respondents from the city-state cited portfolio diversification as their reason for investing in the emerging asset class.  75% of investors expressed the belief that regulatory clarity has improved recently. Growing confidence among institutional investors generally is likely to be developing due to increasing certainty relative to digital asset regulation. While Donald Trump had not been elected in the United States at the time that survey participants responded, it was looking increasingly likely that he would win the election.  That’s likely to have had a bearing on investor outlook, not just within the United States but internationally, given the implications in terms of positive regulation and an overall positive approach to crypto. 39% of Singaporean respondents cited yield-generation opportunities as their motivation in investing in digital assets. The recent advent of spot crypto exchange-traded funds (ETFs) stood out as another motivation for investors.  Breaking down specific areas of interest within the crypto sector, 71% of Singaporean respondents were interested in investment in layer-1 blockchain networks. Meanwhile, 56% expressed an interest in Web3 infrastructure investment options, with 41% showing an interest in layer-2 blockchain networks. Interest in asset tokenizationIn relation to tokenization, 47% of those surveyed in Singapore indicated an interest in tokenizing mutual funds and corporate bonds over and above other financial assets and products. When first proposed, real estate was considered the most obvious asset primed for tokenization but mutual funds and corporate bonds now appear to be gaining more traction. Asset tokenization has been garnering considerable attention in mainstream finance but especially so in Singapore. Local regulator, the Monetary Authority of Singapore, (MAS) has been running Project Guardian, a collaboration between MAS and the financial services industry with an emphasis on asset tokenization. The project recently brought in the German central bank, the World Bank, HSBC and markets infrastructure firm Euroclear as participants. 

Japan’s largest bank, MUFG, has teamed up with KlimaDAO Japan, the provider of a digital reserve currency backed by carbon credits, to explore the use of the JPYC stablecoin for settling tokenized carbon credit transactions on the Progmat blockchain platform. Settlement on ProgmatProgmat provides the infrastructure to enable the issuance of various stablecoins. Last September, MUFG announced a collaboration with Binance geared towards stablecoin issuance. The JPYC stablecoin, operational since 2021, functions as a prepaid money instrument, similar to a prepaid card, due to its existence before Japan’s stablecoin legislation. Under new regulations, JPYC can either obtain a money transmitter license or issue a trust-style stablecoin with a bank like MUFG acting as the trustee for the stablecoin's reserves. Last year, JPYC formed a partnership with MUFG implicating the use of the Progmat platform.  This partnership, along with the involvement of Kansai Electric subsidiary Optage as the integration partner, sets the stage for the KlimaDAO stablecoin experiments. Optage will provide the corporate infrastructure required to manage the carbon credits added to the blockchain and provide a means for funds settlement to be achieved via bank transfer. Through the use of various local stablecoins for the purpose of settlement, it’s hoped that improved liquidity on a global basis may be achieved.Photo by Dan Meyers on UnsplashInitially recognized for making tokenized carbon credits accessible on public blockchains, KlimaDAO's functionality extends beyond this. The organization also offers the capability to retire credits. Last year, KlimaDAO expanded its reach by launching Carbonmark, an enterprise-focused marketplace.  This platform, which utilizes blockchain technology, namely Polygon, and smart contracts, offers a user-friendly experience by integrating traditional payment methods like bank transfers and SAP integration.  J-CreditsJapan operates a national scheme known as J-credits, and the Tokyo Stock Exchange has introduced a secondary market for these credits. J-credits are designed to certify the amount by which greenhouse gas emissions have been reduced through the use of carbon sinks in Japan. However, the volume of J-credit transactions remains low, reflecting the broader state of Japan's voluntary carbon market.  KlimaDAO aims to address this by launching the KlimaDAO Japan Market, simplifying the process for domestic companies to purchase and utilize carbon credits. This initiative will involve tokenizing J-credits, referred to as D-Carbons.  Andrew Bonneau, KlimaDAO co-founder, outlined on X that “@KlimaDAO is in a unique position to facilitate an efficient J-Credit market on chain, while serving as the base infrastructure for integrating these assets with 3rd party services.” While the initial phase will use traditional bank payments, the ultimate goal is to transition to using stablecoins, particularly the JPYC stablecoin. Norbert Gehrke, an observer of developments within the Japanese fintech scene, outlined on Medium that the Japanese carbon credit market is likely to reach three trillion yen ($19.15 billion) by 2030. Meanwhile, the global carbon credit market has a current value of 39 trillion yen ($249 billion). KlimaDAO Japan has mentioned the use of a permissionless blockchain for this initiative but has fallen short of confirming that the Polygon network will be relied upon. Japan has several homegrown blockchains, which might be considered for this project.  At the time of writing, the KLIMA token had risen 31% over the course of the previous 24 hours, with a unit price of $3.53 according to CoinGecko.