Central Asian republics work towards crypto bank & crypto hub development

SK C&C to provide ChainZ Security Token service for Hana SecuritiesSK C&C, a comprehensive digital solutions provider and the affiliate of South Korean conglomerate SK Group, announced Tuesday (local time) that it will provide the blockchain-based ChainZ Security Token service to Hana Securities for the securities firm’s construction of a security token system.Security tokens enable the conversion of assets such as real estate, art and carbon credits into digital tokens. These digital representations open up opportunities for retail investors to make fractional investments in assets that were previously beyond their reach due to high minimum investment requirements.Hana Securities’ involvement in security tokens emerged when its parent company, Hana Financial Group, joined a consortium called the Next Finance Initiative (NFI) in June to expand the security token ecosystem. In this collaborative effort, Hana Securities is set to develop infrastructure that will enable the establishment of extensive security token services. This infrastructure will support functions such as the issuance, distribution and procurement of security tokens.Photo by Shubham Dhage on UnsplashSecurity tokens on EthereumThe ChainZ platform allows the creation, issuance and trading of tokenized assets on the Ethereum network by simply calling an application programming interface (API). The company explained that being compatible with several Ethereum standards, including ERC-20, ChainZ enables users to create diverse token-related services with just a few clicks.SK C&C will leverage the ChainZ platform, which supports distributed ledger services, to manage token offerings and allocations. Additionally, the company will offer security token-related services, which will include processing investor orders and facilitating the buying and selling of tokens.Choi Cheol, Head of SK C&C’s Web3 and Convergence Group, said that the security token system of Hana Securities will lay a foundation for securities firms to adopt security token services and engage in business collaborations with each other. According to Choi, SK C&C is committed to providing secure trading services for security tokens, catering not only to securities companies but also to a broader range of enterprises and general investors. The tech company is also planning to take an active role in NFI and other consortiums with securities firms as a part of its strategy to enhance these efforts further.

Shots Fired in New OKX Ad CampaignGlobal crypto spot and derivatives exchange OKX has launched a daring ad campaign that sets US-based rival exchange Coinbase firmly in its cross hairs.The formerly Chinese and now Seychelles-based exchange has pushed out a global ad campaign along the following theme: “The system doesn’t need an upgrade; it needs a rewrite.” The ads were launched on Tuesday, pointing out the ills of the traditional, centralized financial system.Photo by Merakist on UnsplashCrypto exchange rivalryThe advert doesn’t explicitly call out its rival, Coinbase. However, it is nuanced in taking a subtle dig at the US-based exchange. Exactly two months prior, on March 9, Coinbase released its own ad campaign. Coinbase claimed in its ad that “it’s time to update the system,” with OKX’s subsequent commercial having been carefully worded to poke fun at the Coinbase commercial.With a number of high profile epic failures of crypto businesses over the past twelve months, including the fall of FTX, the remaining exchanges in the business have been tripping over themselves in an effort to convince the alternative asset-investing public that theirs is the safest platform upon which they can securely trade.In its sixty second commercial, OKX poses the question “why don’t we change everything?”, set up by its claim that the conventional finance system is broken.The last of the big spendersThere’s been a notable change of strategy in the marketing activities of crypto businesses since the height of the last crypto bull run. Gone are the marketing excesses exemplified most by the now bankrupt FTX exchange.FTX demonstrated itself to be a profligate spender on all manner and means of marketing, particularly during 2021 and 2022. It paid Wall Street investor and Shark Tank star Kevin O’Leary $15 million to be a spokesperson for the company. Similar deals were struck with a range of celebrities including former NBA star Shaquille O’Neal, NFL stars such as former New England Patriots quarterback, Tom Brady, and a host of others.At the height of its marketing opulence, the fraudulently run firm signed a $135 million sponsorship deal that provided it with the naming rights to the home stadium of the NBA’s Miami Heat. 2022's Super Bowl, one of the world’s largest single marketing opportunities, saw FTX and others pay out big on advertising spend.By contrast, this year’s Super Bowl was almost a complete washout as far as crypto business participation was concerned. Meanwhile, all of the celebrities that featured in FTX’s marketing activities have found themselves the subject of multi-million dollar class action lawsuits filed by FTX creditors.A more sobering marketing strategyDespite the reputational damage that crypto has suffered due to these high profile failures, firms like OKX and Coinbase have continued to maintain a responsible level of advertising and marketing activity.That’s best exemplified by OKX’s ongoing marketing relationships with McLaren’s Formula One racing team and Manchester City Football Club. In March, US-based crypto exchange Kraken announced a marketing partnership with the Williams Formula One racing team.Crypto.com is probably the only crypto firm that spent excessively during the last bull run yet has continued to maintain a relatively high level of marketing activity. Much of that may have been due to commitments it had made during a more buoyant market. Notwithstanding that, the firm did fall foul of the UK advertising regulator, who banned its NFT promotion in December 2022.

Taiwan Aims to Propose Special Crypto Law by Late NovemberIn a bid to address growing concerns surrounding offshore crypto exchanges and prevent regulatory arbitrage, Taiwan is actively working towards proposing a draft special crypto law for its first reading by the end of November.Yung-Chang Chiang, a member of the Legislative Yuan, the Taiwanese parliament, emphasized the need for a dedicated crypto asset act to effectively regulate crypto businesses in discussion with The Block on Friday. Chiang believes that cryptocurrencies, as an asset class, significantly differ from traditional financial products and require oversight through a separate, specialized legal framework.Photo by Ian Chen on UnsplashPublic hearingThe Taiwanese politician recently organized a public hearing within the parliament to discuss the draft proposal with key stakeholders, including virtual asset service providers, legal experts, and academics. He argued that while Taiwan’s Financial Supervisory Commission (FSC) had released guidelines for the crypto sector to establish self-supervisory rules through a potential industry association, these measures lack legal enforceability.Chiang pointed out:“In this case, under the authority of this special law, regulatory authorities can impose administrative penalties on operators who violate these self-regulation rules. Without such a special law, the regulators would lack the ability to impose penalties.”Under the proposed special law, all crypto platforms operating in Taiwan would be required to obtain a permit. Failure to do so could result in regulatory orders to cease operations. Presently, Taiwan mandates that virtual asset service providers comply with anti-money laundering (AML) laws, which were introduced by the FSC in July 2021. However, the broader crypto industry in Taiwan remains largely unregulated.It is unlikely that the special law will pass through all three readings during the current legislative session, which is expected to conclude by the end of this year. Chiang noted: “An election is coming up, and the current legislative session focuses more on reviewing the government’s budget.”Chiang also mentioned the possibility of Taiwan’s FSC proposing its version of the special crypto law, but this is not anticipated until at least mid-2024. He explained: “It’s hard to say exactly when the special law will be enacted, but it should likely occur sometime after the middle of 2024.”Binance, the world’s largest crypto exchange, is understood to be in the process of registering in Taiwan for AML compliance, despite not currently being regulated in the country. The exchange has formed a local entity named “Binance International Limited Taiwan Branch (Seychelles),” as indicated in the Taiwanese Ministry of Economic Affairs’ database.Banking difficultiesDuring the public hearing, Damien Ho, Representative of Global Partnerships at Binance, raised concerns about the challenges faced by crypto platforms in Taiwan in securing suitable banking services. Despite the FSC’s efforts to discourage banks from treating crypto platforms as high-risk entities, crypto platforms still encounter difficulties in their interactions with banks. Ho suggested that the Taiwanese government should encourage private or public banks to become more crypto-friendly, facilitating the regulated and effective development of crypto businesses.At the public hearing, Winston Hsiao, Co-Founder and Group CRO of Taipei-based crypto exchange XREX, suggested a step-by-step approach to regulation, with smaller entities adhering to self-supervisory rules formulated by the industry association after registration. For larger entities, he proposed obtaining a permit under the special law and potentially applying for other relevant financial licenses.