Crypto Titans Clash on Elon Musk’s X

Fair Weather Day for Rain With Abu Dhabi License ApprovalRain, the cryptocurrency exchange that serves the Middle East and North Africa (MENA), Turkey, and Pakistan, has scored a significant regulatory win in the United Arab Emirates (UAE). On Tuesday, the Abu Dhabi unit of Rain secured a license to operate as a virtual assets brokerage and custody service within the country.Photo by Agnieszka Kowalczyk on UnsplashCoinbase backingHeadquartered in Bahrain and backed by Coinbase, Rain’s Abu Dhabi Global Market financial free zone entity will now have the authority to offer virtual asset services to institutional and select retail clients in the UAE. This includes the ability to facilitate the buying, selling, and custody of cryptocurrencies.According to Co-Founder Yehia Badawy, the newly acquired license brings additional advantages to Rain. Notably, the exchange will be able to open a bank account in the UAE, simplifying fund management for its clients who can now utilize the local payment network.For Rain, this regulatory approval holds particular significance, as it addresses the hesitancy among local asset managers to engage with crypto firms lacking a domestic license. With this stamp of approval, these managers are expected to feel more at ease collaborating with Rain, thus expanding the potential demand from institutional investors.$500 million valuationRain has been gaining traction since its establishment in 2017 by Badawy and three other co-founders. Kleiner Perkins and Coinbase Ventures, two prominent investors from Silicon Valley, have backed the exchange. Both participated via a Series B funding round in January 2022 that saw Rain raise $110 million. Interestingly, Rain’s leading investor, Coinbase, also expressed an interest in developing a base in Abu Dhabi in recent months.There has been a lot of speculation in recent times with regard to where Binance, the world’s largest cryptocurrency exchange, is headquartered. Although still not certain, many believe that Abu Dhabi provided that base for the company. Meanwhile, US-headquartered cryptocurrency exchange Gemini, is working towards establishing a base in the UAE.Overcoming challenging market conditionsLast year’s Series B fundraise resulted in the company achieving a valuation of $500 million. The funds from that round were earmarked for the expansion of Rain’s operations throughout the region. Later that same year, the company laid off dozens of employees as bear market conditions within the digital assets space began to bite. As market conditions worsened later that year, the firm announced a fresh round of job cuts in September.The UAE has been positioning itself as a crypto-friendly destination, aiming to attract major players in the cryptocurrency industry. By enabling cryptocurrency payments in sectors like real estate and education, the UAE has spurred adoption rates and transaction volumes. Additionally, the country has been actively working on developing virtual asset regulations to accommodate new business opportunities in a highly competitive Gulf region.Rain’s recent licensing achievement signifies a significant milestone for the exchange and contributes to the UAE’s ongoing efforts to establish itself as a leading hub for the cryptocurrency sector.

Polymarket activity under scrutiny in Taiwan due to election contractsTaiwanese law enforcement is currently delving into the activities of online influencers and community members promoting Polymarket contracts related to the upcoming presidential election which is due to be held on Jan. 13.Polymarket is a New York-based Ethereum-centric prediction market. The platform runs on the Ethereum layer-2 scaling solution network Polygon. The project invites platform users to bet on the outcomes of a broad spectrum of events, ranging from politics to entertainment.Users deposit USDC stablecoin, choose an event to bet on and purchase “outcome shares” through USDC. The user has the ability to trade those shares anytime before the resolution of the contract.Photo by Ethan Lin on UnsplashPossible election law violationsThe Taiwanese investigation came to light in a report by Taiwan-based crypto publication BlockTempo, which was published last week. The investigation comes as concerns arose about potential violations of Taiwan’s Presidential and Vice Presidential Election and Recall Act, which explicitly prohibits gambling on election outcomes.Multiple influencers and crypto community members have reportedly been subpoenaed for their involvement in Polymarket contracts, allowing users to place bets on the January election. At present, the betting pool for the election holds over $300,000, with a market prediction favoring the Democratic Progressive Party’s Lai Ching-te, also known as William Lai, with a 78% chance of winning.However, the legality of such betting activities is in question under Article 88–1 of Taiwan’s election law. It stipulates that anyone gambling on the outcome of an election or recall in a public place or a place open to the public may face imprisonment, short-term detention or a fine of up to NT$100,000 ($3,196.85).Sherman Lin, an attorney at Taipei-based Lin & Partners, emphasized the seriousness with which law enforcement views gambling activities related to presidential elections in Taiwan. He explained that broad legal interpretations under the Presidential Election and Recall Act have led to investigations and convictions of gambling website operators targeting Taiwanese gamblers. Lin stated:“Law enforcement agencies in Taiwan are vigilant in investigating any gambling activities related to presidential elections.”“Broad legal interpretations have been applied to gambling crimes under the Presidential Election and Recall Act, leading to investigations and convictions of gambling website operators in Taiwan targeting Taiwanese gamblers,” he added.Prohibited in United StatesComparing the situation to the United States, where gambling on election outcomes is illegal in most states, Lin noted that enforcing such regulations often falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC). Polymarket’s Terms of Use explicitly prohibit usage by U.S. persons.Despite potential legal consequences for gambling activities in Taiwan, including participation, promotion and platform hosting for betting pools like Polymarket, Lin pointed out that enforcing actions against overseas entities poses jurisdictional challenges. Taiwan’s legal reach is primarily limited to domestic actors, creating complexities in addressing decentralized platforms like Polymarket.Lin suggested that law enforcement may focus on online influencers who promoted the Polymarket contract, as seen in previous cases involving the collapse of the unlicensed crypto exchange JPEX in Hong Kong.Moreover, while there are legal precedents for pursuing centralized entities organizing election gambling, Lin highlighted that no established legal precedent in Taiwan currently exists for decentralized platforms organizing election betting.

Samsung Plans to Expand Its Business Through NFTsSamsung Research, the research arm of Samsung Electronics, set up a new task force earlier this year to launch new projects to combat slowing demand for home appliances.Photo by Markus Winkler on PexelsSamsung’s endeavors in NFTsOne of its projects will involve non-fungible tokens (NFTs), in which Samsung has been showing its continued interest. Last February, Samsung Electronics displayed NFT artworks on their high-end televisions, and more recently, the high-tech company signed a memorandum of understanding with Hana Financial Group to develop NFT-related products.TVs to offer NFT art trading functionalityIt is predicted that in the first half of this year, Samsung will release a premium television with an application that allows TV viewers to trade NFT artworks. It is analyzed that the leading hardware manufacturer now attempts to expand its business models through NFTs and other content services while maintaining its dominance in the TV market.