Korea to Tighten Scrutiny of Crypto Exchange Shareholders Amid Rising Concerns

In Malaysia local regulator the Securities Commission has ordered global crypto exchange platform Bybit to shut down its operations within Malaysia as part of enforcement actions being taken by the regulator against the company.Photo by Esmonde Yong on UnsplashOperating without registration The Securities Commission published a statement to its website late last week outlining that both Bybit and its CEO Ben Zhou had been reprimanded for carrying out digital asset trading activities in Malaysia without having completed the necessary registration. The regulator also pointed out that both Zhou and his company have been listed on its Investor Alert List since July 2021. The Securities Commission took the opportunity to remind investors that they should only deal with what it termed “Recognized Market Operators” (RMOs), a designation it applies to entities that have completed registration with the regulator. Investors who utilize unregistered platforms are not extended any form of protection under Malaysian securities law, the Securities Commission warned, adding that such platforms could put them at risk of fraud and implicate them in money laundering activity potentially. Enforcement actions Bybit has been directed by the regulator to disable its website and mobile applications that are currently targeting Malaysian investors within 14 business days from Dec. 11.  The regulator also wants the company to curb other forms of promotion aimed at Malaysian investors. With that, it has requested that the company take down its Telegram-based support channel for Malaysian customers. Advertising activity, including social media posts, must also cease in cases where such activity is aimed at Malaysian investors. The Securities Commission acknowledged that thus far, Bybit has been compliant with its latest enforcement requests. Intentions to secure licensing Bybit has responded to these developments on its Bybit Malaysia Telegram channel, stating that the company understands that these actions “may cause some inconvenience” to Malaysian customers. “Once we have secured the appropriate licenses, we look forward to reconnecting with you again in the future,” it added. The enforcement action is likely to be a setback for Bybit given that the firm appeared to be focusing on the Malaysian market of late. In June it emerged that the company was moving to relocate Chinese employees to both Malaysia and Dubai.  This is not the first occasion in which Malaysia’s Securities Commission has taken action against a crypto platform. In 2023 the commission ordered the closure of the Malaysian operations of global exchange Huobi (subsequently rebranded as HTX). The circumstances in that instance were similar in that it acted against the exchange and its CEO for operating illegally within the Malaysian market. Within the Malaysian market, only six trading platforms have been registered. These include Hata Digital, Luno, MX Global, Sinegy, Tokenize Technology and Torum International. Earlier the Securities Commission acted similarly in prohibiting Atomic Wallet from operating within Malaysia given its failure to register its digital asset exchange activities. 

Dubai’s VARA grants WadzPay ‘initial approval’ of trading licenseIn the latest demonstration of the emirate’s crypto-friendly credentials, Dubai regulator, the Virtual Assets Regulatory Authority (VARA), has granted an “Initial Approval” license to WadzPay.WadzPay was founded in 2018 in Singapore as a business-to-business (B2B) technology firm that concentrates its efforts on enabling digital asset-based transaction processing and settlement. This licensing approval is a significant step forward for the startup, as it inches closer to obtaining a full-fledged Virtual Asset Service Provider (VASP) license.Photo by Paul MARSAN on UnsplashGearing up for service roll-outWith this approval in hand, WadzPay is gearing up to offer a range of virtual asset services, specifically under the forthcoming VASP License for Transfer and Settlement, as well as Broker-Dealer trading activities.That said, the current VARA license places certain restrictions on WadzPay’s offerings. While WadzPay is known for providing a wide array of services to businesses (B2B) and individual users through its B2B2C platform, the “Initial Approval” license limits its scope to only a subset of its virtual asset products and services.Flurry of approvalsDubai has taken center stage in the realm of crypto-friendly jurisdictions, granting a flurry of operational licenses to numerous crypto firms and exchanges in recent months. The regulatory framework in Dubai is underpinned by robust guidelines for VASPs. To operate fully within this framework, crypto firms must navigate a meticulous three-tier licensing process, starting with provisional approval, followed by a minimal viable product (MVP) license, culminating in a total market product license.One of the recent beneficiaries of VARA’s approvals is Backpack, a virtual currency wallet provider. Last month, Backpack received its VASP license, allowing the introduction of the Backpack Exchange to the market. However, similar to WadzPay’s situation, Backpack’s license comes with certain limitations.It permits the offering of crypto exchange services within Dubai but restricts the rollout of other virtual asset services. The Backpack Exchange sets itself apart with advanced features, including zero-knowledge (ZK) proof-of-reserves, multi-party computation (MPC) for secure custody and lightning-fast order execution capabilities.Nomura portfolio company approvalsKomainu, a collaborative venture involving financial heavyweights like Nomura, CoinShares and Ledger, is another notable success story. After a diligent licensing journey, Komainu secured its full operating license from VARA, approximately 10 months after obtaining its MVP license in November 2022.Laser Digital, a crypto division under the vast umbrella of financial giant Nomura, also earned its operational license from VARA in August. Through its dedicated subsidiary, Laser Digital Middle East FZE, based conveniently in Dubai, Nomura has showcased its VASP license. The permit enables the firm to offer a suite of services, including brokerage, virtual asset management and investment offerings within the emirate.Notably, Laser Digital’s licensure followed closely on the heels of Binance, the global crypto exchange. Binance secured its operational minimum viable product (MVP) license from VARA, paving the way for providing crypto exchange and virtual asset broker-dealer services within the region.This flurry of licensing activities and approvals in Dubai is suggestive of the emirate’s commitment to fostering a progressive and regulated crypto environment.

Australian venture capitalist and founder of MHC Digital Group, Mark Carnegie, is optimistic about bitcoin's potential for a bullish trend, while believing that Asia will be the real force driving the market beyond the exchange-traded fund (ETF) approval hype in the United States.Photo by Hans Eiskonen on Unsplash$50,000 bitcoin retestIn a recent interview with CNBC, Carnegie expressed his belief that bitcoin is "clearly primed for a bit of a run and a retest to $50,000." The bitcoin unit price stood at around $43,600 at the time of the interview. At the time of writing, it’s weighing in at $46,773. While there’s likely to be considerable resistance in the leading cryptocurrency getting past the psychologically important $50,000 level, the digital asset is certainly heading in the direction that Carnegie had predicted. Looking ahead, Carnegie shared his short-to-medium-term outlook, stating:"So my feeling is short term, long, medium term, which is, you know, 30 to 90 days, probably a retrace." This suggests that Carnegie anticipates a positive trajectory for bitcoin in the coming months, likely as an initial response to a spot bitcoin ETF approval in the U.S. Last week a report from Singapore-based digital asset financial services firm Matrixport speculated that spot bitcoin ETF applications would be rejected as they have been over the past few years. Market risk factorsHowever, he also voiced concerns about the current state of the U.S. equity markets and potential recession indicators. Reflecting on the recent miss on payrolls, Carnegie commented:"I feel like that miss on payrolls last week makes me feel like there's a big flip. And everyone's going to start panicking about a recession." Despite the uncertainty in traditional markets, Carnegie remains optimistic about bitcoin's performance. When asked about the specific impact on cryptocurrencies, he admitted, "How's that going to affect crypto? I don't really know." In a blog post published last Friday, Arthur Hayes, the CIO of Hong Kong-based family office Maelstrom, similarly points to market turbulence in the short to medium term while remaining bullish on bitcoin over the longer term. An Asia-powered bull runCarnegie highlighted the influence of spot bitcoin ETFs and suggested inflows, noting that there are more net flows from Asia than the U.S. He stated:“You could easily see $50 - $100 billion in net new flow out of Asia this year, and if that happens..!” He mentioned the anticipation of approximately $5 billion waiting to come into the U.S., characterizing it as substantial but perhaps not as impactful as expected in the short term. "It's an Asian story this time round,” Carnegie claimed. Carnegie also expressed a preference for bitcoin over Ethereum in the current financial landscape. He stated:"Bitcoin feels more solid to me at the moment. So on a relative basis, I can talk like I can talk to you. I feel like for the next little while, Bitcoin feels better to me than Ethereum." Mark Carnegie's positive outlook on bitcoin's potential rally to $50,000 aligns with his preference for bitcoin over Ethereum in the current market conditions, despite concerns about the broader economic landscape.