Experts Discuss Korean Security Token Market

Hana Bank Teams Up with Content Distributor Danal Ent to Establish Security Token EcosystemHana Bank and Hana Securities, affiliates of South Korea’s renowned Hana Financial Group, have recently entered into a business agreement with content distributor Danal Entertainment as reported by local news outlet Newsis. The purpose of this collaboration is to establish a security token ecosystem centered around content and explore mutually beneficial business prospects.Photo by Shubham Dhage on UnsplashIP-backed security tokensUnder this agreement, their security token ecosystem will leverage Danal Entertainment’s diverse intellectual properties (IPs) associated with music, movies, goods, and concerts. Through the tokenization of copyrights, patents, and trademarks, the collaborative group aims to introduce cutting-edge digital financial services that provide convenient and user-friendly means of purchasing and managing a wide range of tangible and intangible assets.Legislative push in parliamentTheir collaboration aligns with the ongoing efforts within the Korean financial authority and political circles to promote security token legislation. It was reported earlier that proposed amendments to the Electronic Securities Act and the Capital Markets Act, which aim to legalize security tokens, will be submitted to the National Assembly later this month.Choi Won-young, the Managing Director of the Digital Division at Hana Securities, emphasized that this partnership seeks to establish a successful security token business model within the content and entertainment sector. Furthermore, he expressed the company’s commitment to delivering innovative digital financial services that utilize content-based security tokens, thereby creating new experiences and value for customers.Lim Yoo-yup, the CEO of Danal Entertainment, highlighted their aspiration to revolutionize the Korean content industry by streamlining the process of content creation and consumption. The expectation is to introduce a new paradigm in the industry by making it easier for users to engage with content.Danal’s setback and resilienceMeanwhile, Danal Entertainment’s parent company, Danal, reported a net loss in the first quarter of this year, primarily attributed to the decline in the value of Paycoin (PCI). PCI is the native token of PayProtocol, Danal’s crypto payment platform. The loss was largely a result of PCI’s delisting from the member exchanges of the Digital Asset eXchange Alliance (DAXA). DAXA consists of the nation’s five largest crypto trading platforms: Upbit, Bithumb, Coinone, Korbit, and Gopax.Despite this setback, Paycoin (PCI) has managed to secure trading support from cryptocurrency exchanges Huobi, OKX, Bitget, and GDAC. Furthermore, Danal is taking measures to remedy the situation. They are focusing on providing major cryptocurrency payment solutions and wallet services within the Korean market, seeking listings on foreign crypto exchanges, and expanding their presence in global markets.Hana’s blockchain initiativesIn a separate development, the Hana Financial Group has recently been actively promoting businesses utilizing blockchain technology. Earlier this month, Hana Bank joined forces with Korean blockchain firm Trackchain to develop and operate a platform that facilitates art banking services based on Web3 technology. These services involve the exhibition, advertisement, and distribution of artworks.

Hana Securities Opens Doors to Fractional Investments in Digital ComicsHana Securities announced yesterday that the South Korean securities company signed a memorandum of understanding (MOU) with digital comic platform Webtoonall. The purpose of this collaboration is to offer investors fractional investment opportunities.Photo by Yulia Matvienko on UnsplashFractional investments in digital comicsThrough the partnership, the two companies are set to open up the avenue for fractional investments in webtoons, a form of digital comics that originated in South Korea. Webtoonall will take the lead in developing and providing a platform for trading these products, while Hana Securities will handle the necessary account management and trust services required for these transactions.IP rights related to webtoonsWebtoonall is engaged in the development and operation of a digital trading platform that specializes in the trading of intellectual property (IP) rights associated with webtoons. Besides webtoons, the company also ventures into various content domains, such as movies and TV series. Furthermore, Webtoonall extends its portfolio by featuring content for experiential exhibitions through augmented reality technology. Moreover, the company is actively involved in the creation of educational solutions that harness the power of webtoons generated with the assistance of artificial intelligence.Film and TV adaptationIm Sang-soo, Vice President of Hana Securities, stated that numerous movies and TV series inspired by webtoons have enjoyed significant success in recent years, driving up interest in webtoons to unprecedented levels. Through this MOU, Hana Securities seeks to open up an opportunity for customers to invest in the works that have long piqued their interest.So far, Hana Securities has been actively establishing partnerships with various companies, including Print Bakery, Itcen, and Danal Entertainment. These collaborations aim to develop fractional investment platforms and security token projects, leveraging a wide range of underlying assets, such as artworks and mobile content.

OKX Appoints Nomura Portfolio Co as CustodianSeychelles-headquartered OKX, the world’s second-largest cryptocurrency exchange, has partnered with Komainu, a digital asset storage firm backed by Tokyo-based global financial services group, Nomura, to provide digital asset custody services for institutional customers.This collaboration allows institutional users to store their cryptocurrencies within Komainu’s custodian while utilizing the funds for trading on the OKX exchange. The partnership highlights the trend of vertically integrated crypto exchanges adopting practices from traditional finance, employing third-party custodians to segregate operations and mitigate risks.Photo by Karolina Grabowska on PexelsInaugural Komainu clientAs the inaugural client of Komainu Connect, a regulated settlement and custody system for institutions, OKX now offers its customers 24/7 trading with a combination of cold storage, multiparty computation (MPC), and hardware security modules (HSMs). Lennix Lai, the Chief Commercial Officer of OKX, explained that funds deposited in a Komainu custody wallet are transferred to a Komainu collateral wallet, which is then linked to an OKX account. This integration allows for seamless balance mirroring and active trading across OKX’s extensive range of spot and derivatives markets.Asset custody optionalityIn a tweet posted on Tuesday, OKX President Hong Fang wrote: “We are agnostic re how customers want to custody their assets. Third party, platform, self-custody.”Komainu Connect’s collateral wallet, with full transparency to OKX, operates within a tri-party legal agreement involving Komainu as the custodian, OKX as the liquidity venue and provider, and Komainu’s client as the client of OKX. Sebastian Widmann, Head of Strategy at Komainu, elaborated on this agreement, emphasizing how it enables Komainu’s clients to trade directly on the exchange while Komainu handles the settlement requirements. This framework ensures a secure and efficient trading experience for institutional users.While specific details about the volume of assets to be transferred to Komainu were not disclosed, Lennix Lai stated that the amount was “significant” and expected to increase as both firms enhance their institutional product offerings. OKX believes in providing users with a range of solutions, including on-exchange, off-exchange, and third-party balance mirror custody options. By partnering with Komainu, the erstwhile Beijing-based exchange aims to expand its service offerings and cater to the evolving needs of its institutional clientele.Komainu was established in 2020 through a joint venture involving Nomura, digital asset manager CoinShares, and digital asset security company Ledger. The firm operates under regulatory oversight in St. Helier in the Jersey Islands and in Dubai, with offices located in London, Dublin, and Singapore. Its robust regulatory compliance measures and strategic partnerships position Komainu as a trusted custodian within the crypto industry.Market maturationThe collaboration between OKX and Komainu represents a significant development in the maturation of the crypto market. By leveraging Komainu’s custody services, OKX aims to enhance the security and reliability of its platform, mitigating potential risks associated with holding customer assets. This partnership also underscores the growing demand for institutional-grade infrastructure and services in the cryptocurrency ecosystem.As the crypto industry continues to evolve and attract institutional investors, custodial solutions provided by trusted and regulated entities like Komainu are crucial for fostering confidence and facilitating broader participation. The OKX-Komainu partnership demonstrates the convergence of traditional finance practices with the emerging crypto landscape, highlighting the importance of robust custody solutions and risk management frameworks in the digital asset ecosystem.