Upbit Reassures Investors Following False APT Token Deposits

OKX collaborates with Polygon Labs on layer-2 network launchSeychelles-incorporated OKX, one of the world’s largest cryptocurrency exchanges, has collaborated with blockchain development firm Polygon Labs to unveil the testnet for its latest zero-knowledge layer-2 network, named “X1.”Photo by Shubham Dhage on UnsplashIntroducing “X1”The company announced initial details on X1 via a press release published on Tuesday. This Ethereum-based ZK network has been constructed using the Polygon Chain Development Kit (CDK), with OKX playing a pivotal role as a core contributor to the CDK. Substantial engineering resources are being invested by OKX to strengthen the Ethereum scaling solution.The new network will serve to bolster the utility of OKX's native token, OKB. OKB will be used for X1’s gas fees. There has been a lot of chatter about the utility of exchange tokens following the collapse of FTX, as that platform was over-reliant on its native token in propping up the exchange. Similarly, critics are speculating that a comparable dynamic may be at play at Binance, relative to its native token BNB.Likely buoyed by news of this development, OKB observed a 10% unit price increase on Tuesday. However, that move has retraced downwards in the meantime.ZK proof technologyX1 has been designed with ZK proofs, a method through which one party can convince another that a particular claim is true without disclosing details of the claim itself. In this way, X1 ensures high security and scalability while mitigating transaction costs. The network seamlessly aligns with Ethereum, facilitating the secure deployment of EVM-based dApps and connectivity with a wide array of smart contracts, wallets and tools. OKX underscores X1’s status as its new native network.Chief Innovation Officer of OKX, Jason Lau, expressed optimism about X1, deeming it integral to the firm’s efforts in guiding users into the realm of Web3. Lau emphasized the scalability and accessibility of X1, especially for developers who can leverage it to construct user-friendly Web3 applications while maintaining interoperability with other networks.The collaboration with Polygon Labs marks another milestone in the evolution of Polygon’s CDK. Launched in August, the CDK enables the development of layer-2 blockchains on Ethereum, emphasizing zero-knowledge proofs. Networks deployed using the CDK gain the ability to connect to a shared ZK bridge, fostering interoperability.Sandeep Nailwal, co-founder of Polygon, underscored the significance of X1’s adoption of Polygon CDK technology, envisioning a future where CDK-deployed chains interoperate and coexist within a larger network of ZK-powered layer 2s in the Polygon CDK ecosystem. The CDK has gained traction, with various Layer 2s, including Immutable zkEVM, IDEX, Palm Network and Astar zkEVM, currently in development using this technology.Industry trendA trend is developing among crypto exchange platforms and their involvement in establishing layer two networks. Earlier this year, U.S. crypto platform Coinbase introduced the Base network, an Ethereum layer-2 network that focuses on offering a safe, low-cost and developer-friendly mechanism to build on-chain.Last week, it emerged that another leading U.S.-based crypto platform, Kraken, is on the lookout for a development partner to enable it in building out its own layer-2 blockchain network. According to those reports, it’s understood that Kraken is considering partnering with Polygon Labs, Matter Labs or the Nil Foundation.As this OKX-Polygon Labs collaboration progresses, the industry will continue to observe how X1, with its innovative technology stack and seamless integration with Ethereum, contributes towards broader Web3 development.

Hong Kong regulators consider opening up crypto ETFs to retailHong Kong regulators are now exploring the possibility of allowing retail investors to participate in spot crypto exchange-traded funds (ETFs).The CEO of Hong Kong’s Securities and Futures Commission (SFC), Julia Leung, was cited by Bloomberg on Sunday as having indicated that provided that the necessary regulatory approvals and checks are in place, the regulator may be open to the notion of retail participation where spot crypto ETFs are concerned. Leung emphasized the regulator’s openness to innovative technology that enhances efficiency as long as it addresses potential new risks.Photo by Markus Winkler on Pixabay‘Happy to give it a try’She stated: “We welcome proposals using innovative technology that boosts efficiency and customer experience. We’re happy to give it a try as long as new risks are addressed. Our approach is consistent regardless of the asset.”While both the United States and Hong Kong currently permit futures-based cryptocurrency exchange-traded funds (ETFs), the adoption of such instruments has been relatively modest in comparison to the broader fund industry.In Hong Kong, there are currently ETF listings for products like Samsung Bitcoin Futures Active, CSOP Bitcoin Futures and CSOP Ether Futures, with a total combined asset value of approximately $65 million. In June, Hong Kong’s largest ETF manager, Hang Seng, suggested that it too was considering a crypto product offering.In accordance with the SFC’s digital asset regulations, individual investors already have the opportunity to trade prominent cryptocurrencies like Bitcoin and Ether on licensed cryptocurrency exchanges since June 1. Presently, BC Technology Group Ltd.’s OSL and HashKey Exchange are the only platforms in Hong Kong with permits for cryptocurrency trading. Additionally, there are expectations that mandatory regulations concerning stablecoins will be introduced over the course of the next year.Prioritizing investor protectionLeung expressed the regulator’s cautious approach, stating:“As the crypto ecosystem evolves step-by-step to the point where we’re comfortable, then we’re happy to open up more access to the wider investing public.”Notably, Hong Kong also recently unveiled its Web3 plans, highlighting its commitment to embracing blockchain and decentralized technologies.Hong Kong introduced a specialized regulatory framework for virtual assets in June which are designed to attract businesses while prioritizing investor protection. That need to protect consumers has been underscored recently by the alleged fraud that has subsequently been uncovered involving HK$1.6 billion ($204 million) at the unlicensed JPEX cryptocurrency exchange in the city.Market reactionThe significance of such a move isn’t lost on crypto market participants. Taking to X, one wrote: “Seismic shift. Hong Kong’s play could reshape the Asian crypto landscape. #Bitcoin ETFs? A strategic move to anchor HK as the digital nexus of Asia.” Another claimed that this “might redefine the crypto landscape and fuel the next bull market.”A report published by the Hong Kong Stock Exchange in April found that crypto ETFs have the potential to play a significant part in the next phase of digital asset innovation in Asia.Leung emphasized the importance of a strong and comprehensive regulatory structure, highlighting the SFC's efforts to enhance transparency in processing license applications for virtual asset exchanges.Moreover, the Hong Kong Monetary Authority (HKMA), the Chinese autonomous territory’s central bank, is actively exploring the possibility of offering guidance to banks regarding the provision of digital asset custodial services. These services are considered vital for nurturing the growth of a digital asset ecosystem and ensuring investor security.

Nomura-Backed Digital Exchange Acquires Trading License in DubaiKomainu, a digital exchange backed by Japanese financial services conglomerate Nomura, has achieved the milestone of acquiring an operational license in Dubai.The occasion marks a significant moment for Komainu’s expansion efforts in the Middle East, highlighting the progress the company has made in terms of regulatory approval. It follows Komainu’s previous success in obtaining its MVP license in November 2022, establishing the company as one of the first entities to receive such authorization from the local regulator.The operational license was granted by Dubai’s Virtual Asset Regulatory Authority (VARA) on Friday, with the firm being added to the regulator’s virtual asset service provider register.Photo by Emma Harrisova on UnsplashEnabling a broader service offeringWith this operational license in hand, Komainu is now equipped to introduce extended institutional staking and collateral management services to clients within Dubai. These services will be facilitated through Komainu Connect, a purpose-built platform tailored to cater to the precise needs of institutional clients.While Komainu is a Jersey-based entity, the company has an active presence in the Dubai market as it has established subsidiary firm Komainu MEA FZE, which is based within the city. This local presence indicates Komainu’s intention to play an active role in the institutional digital asset business in the region.Dubai growth potentialSebastian Widmann, Head of Strategy at Komainu, emphasized the exciting growth prospects that Dubai’s flourishing digital asset ecosystem offers. He noted that the region is currently experiencing an influx of assets driven by the launch of new exchanges.Widmann stated: “Dubai has a vibrant digital asset ecosystem and impressive talent pool, and we are proud to contribute to the growth of this innovative financial hub.” He further emphasized that Komainu’s presence and its favorable regulatory status position the company uniquely as it embarks on the next phase of its business journey.It’s been a good month for Nomura-backed digital asset businesses in Dubai. A few weeks ago, another Nomura-funded company, Laser Digital Middle East FZE, was also successful in acquiring an operating license from VARA.VARA’s approach to crafting regulations has been instrumental in fostering a framework that supports permissible activities and services for customers and investors in Dubai. These regulations are designed to enhance clarity, establish certainty, and mitigate potential market risks. VARA’s overarching objective is to create a model framework that promotes both global economic sustainability and innovation.Bridging market gapFounded in 2018, Komainu’s inception was driven by the need to bridge a gap in the market by delivering secure and compliant custody services for institutional players venturing into digital asset investments.Komainu’s foundation is built upon a strategic joint venture involving prominent entities such as Nomura, CoinShares, and Ledger. It acquired its first client for Komainu Connect, the firm’s regulated settlement and custody system for institutions, in June when it signed up Seychelles-based crypto exchange OKX to the service.Headquartered in Jersey, the Jersey Financial Services Commission (JFSC) and Dubai’s Virtual Asset Regulatory Authority (VARA) now provide regulatory governance where Komainu’s activities are concerned.