Bitget Adopts Stricter KYC Measures in Line with Global Regulations

In response to the expanding demand for cryptocurrencies in Indonesia, the government has laid down a directive, requiring crypto exchanges operating within the Southeast Asian country to register with the recently inaugurated Commodity Future Exchange (CFX).Photo by Bisma Mahendra on UnsplashMandatory requirementThe CFX was established back in July as the world's first national bourse exclusively dedicated to digital assets. The national exchange has been modeled to replicate exchanges in traditional markets like the NASDAQ, but in this case, focusing entirely on digital assets. Under regulations introduced in 2019 by the Indonesian Commodity Futures Trading Regulatory Agency (Bappebti), crypto exchanges in the country must seek authorization. Even exchanges operating legally since 2014 fall under the category of "prospective crypto exchanges" and must undergo a rigorous process to gain recognition as legitimate entities affiliated with the CFX. Safeguarding investorsThis regulatory initiative aims to create a secure environment for crypto investors while simultaneously serving as a platform for tracking digital asset transactions for taxation purposes. Beyond the regulatory oversight, registering with the CFX also acts as a gateway for the Indonesian government to monitor cryptocurrency transactions for taxation purposes. The authorization process involves registration with self-regulatory organizations (SROs) like the CFX, followed by scrutiny by Bappebti to assess the company's suitability to operate. Only after meeting all requirements can a crypto exchange be issued a crypto exchange license (PFAK). Failure to complete the new procedures and registrations within the specified timeframe, set for Aug. 17, 2024, will result in the inability to operate in Indonesia. Currently, there are 29 prospective crypto exchanges in Indonesia that must obtain authorization to continue their operations. Regulatory oversight change in 2025It is noteworthy that a significant regulatory overhaul in 2025 will shift the oversight of cryptocurrency regulation from Bappebti to Indonesia's Financial Services Authority (OJK). This change could potentially reclassify cryptocurrencies as securities, potentially impacting taxation. While crypto assets are currently subject to Value Added Tax (VAT) and Income Tax (PPh) as commodities, reclassification as securities may lead to a reduction in taxes. In late February, Didid Noordiatmoko, head of Bappebti, announced the nation's intention to launch its state-backed crypto exchange by mid-2023. The exchange will be operated by a private-sector company rather than the government, with private-sector crypto platforms executing trades on the exchange. Crypto adoptionThe surge in demand for cryptocurrencies in Indonesia is evidenced by official data from 2023, indicating that the number of registered crypto traders exceeds that of stock traders. Data published in October outlined that Indonesia has seen a 10.1% year-on-year increase in the number of crypto investors in the country, bringing that figure to 17.79 million citizens. The increase in interest in crypto among Indonesians has not been lost on the country’s politicians as crypto appears to have become an election issue. Gibran Rakabuming Raka, a vice-presidential candidate in the upcoming Indonesian election, expressed the aim to accelerate Indonesia's position as a leader in the digital revolution by cultivating expertise in blockchain and cryptocurrencies. 

The Abu Dhabi Agriculture and Food Safety Authority has announced a ban on cryptocurrency mining on farms, addressing concerns over the misuse of agricultural land.Photo by Kamil Rogalinski on UnsplashClaims of farm misuseAccording to the Khaleej Times, the Authority has informed UAE farmers that their lands are not to be used for Bitcoin and crypto mining. This activity is deemed a “misuse of the farm for purposes other than its intended use.” The new regulation aims to preserve the primary agricultural function of these lands and imposes penalties of up to 10,000 United Arab Emirates Dirhams (approximately $2,722) for violations. Cryptocurrency mining requires significant computational power and electricity, which conflicts with the farms’ intended agricultural use.  Broader support for miningDespite this specific restriction, the United Arab Emirates (UAE) maintains a supportive stance towards cryptocurrency and cryptocurrency mining beyond a farm setting. In 2023, the country emerged as a notable player in the global Bitcoin mining industry, with a combined mining capacity of around 400 megawatts, contributing approximately 4% of the global Bitcoin hash rate. It’s proven to be a popular place in which to locate a mining facility as the country has a robust infrastructure. Stable power is essential in order for miners to be able to run their machines in a sustainable manner. Additionally, the government has generally been supportive of the activity, fostering a conducive environment for both crypto and Bitcoin mining and blockchain technology more generally. Furthermore, the country occupies a strategic location at the crossroads of major trade routes. Regulatory clarity has also been provided by the authorities in the UAE with regard to how crypto mining activity is to be carried out. While this latest move against mining within a farm setting is a restriction, it still feeds into that overall framework of regulatory clarity and certainty. Attracting mining firmsGiven the aforementioned reasons in support of mining in the UAE, the Middle Eastern country continues to attract cryptocurrency mining firms.  In December of last year, a Dubai-headquartered Bitcoin mining company, Phoenix Group, struck a $380 million deal with Chinese mining equipment manufacturer MicroBT. That same month, the company was listed on the Abu Dhabi Securities Exchange (ADX). In May 2023, Abu Dhabi-based digital assets development company Zero Two entered into a partnership with North American crypto miner Marathon Digital with a view towards developing the region’s first large-scale crypto mining facility. Beyond mining, the location is also proving popular for crypto firms more generally. In May 2023, Chainalysis, a leading blockchain analytics company, established its regional headquarters in Dubai. Similarly, Blockdaemon, a provider of institutional infrastructure, expanded its operations in Abu Dhabi, facilitated by the Abu Dhabi Global Market (ADGM), a key financial regulator. Speaking at the Dubai FinTech Summit recently, Reece Merrick, Managing Director of enterprise blockchain company Ripple for the Middle East and North Africa (MENA) region, said that “the UAE has done a remarkable job in really putting itself in a position to be the global crypto hub.”

Ripple Collaborates with Hong Kong Regulator in RWA TokenizationIn a demonstration of an extended use case, Ripple, the real-time gross settlement system, currency exchange, and remittance network, has announced that it has been selected by the Hong Kong Monetary Authority (HKMA) to showcase a real world asset (RWA) tokenization solution.Photo by Redd F on UnsplashReal world asset (RWA) tokenizationIn a press release published on Thursday, the San Francisco-based firm outlined that the objective of its participation in the HKMAs inaugural e-HKD Pilot Program is to showcase a particular approach to real estate tokenization. In principle the e-HKD project is a central bank digital currency (CBDC) scheme.Ripple is one of sixteen firms that will participate in the program. Among the other participants are HSBC, one of the largest banking and financial services institutions in the world, British multinational bank Standard Chartered, and Bank of China (Hong Kong).For its part, Ripple will partner with Fubon Bank, a subsidiary of one of the largest financial holding companies in Taiwan. The e-HKD Pilot Program will feature a series of pilots conducted through several industry players with a view towards carrying out in-depth research into application, implementation, and design issues relative to the e-HKD.Real estate tokenization is a leading example of RWA tokenization, which overall is anticipated to become a multi-trillion dollar industry by the end of this decade. Its plan is to build the solution on a private and secure ledger, guided in principle by the same technology that the company has utilized for XRP, the native token of the Ripple ecosystem.Illiquid assetsThe company points out that people’s homes are usually one of their primary assets. Notwithstanding that, unlocking value in real estate can be problematic, having considerable friction. The idea is that this illiquid wealth can be unlocked through tokenization. It’s a concept that is seeing a lot of interest from competing projects. Start-ups like Securitize and Provenance Blockchain would be among a long list of start-up firms that see the potential in the tokenization of RWAs.In Asia, Japanese trading and investment firm Mitsui has gotten involved in the tokenization of real estate through its Alterna investment platform. Tokeny and CoFund offer other examples of innovators that are pioneering real estate tokenization.In its press release, Ripple outlined that it aims to use its technology in this particular instance to enable Hong Kong citizens to experience the faster and more efficient release of equity relative to real estate.James Wallis, Ripple’s VP of Central Bank Engagements & CBDCs, expanded on this idea further:“The Asia Pacific region has many forward-looking regulators such as the HKMA, who are looking to leverage the capabilities of blockchain and crypto technology. It’s a huge honor for Ripple to be one of the select few organizations participating in the HKMA’s e-HKD Pilot Programme. We now have the opportunity to demonstrate how real estate asset tokenization could be brought to the citizens of Hong Kong, and are confident that our fully integrated solution will be an industry-first use case demonstrating the power of leveraging a CBDC for real estate equity asset release.”