Asia-Pacific leads a wider crypto uptake as legal and security risks persist

Binance’s venture capital arm, Binance Labs, has made an investment in South Korean blockchain games developer, GOMBLE. Binance Labs is a division of the global crypto exchange entity that identifies, invests, and empowers viable blockchain entrepreneurs, startups and communities. In a blog post published by the company late last month, Binance Labs outlined that it has participated in funding GOMBLE at a seed funding round stage. GOMBLE  is an affiliate of South Korea-based 111Percent, a casual mobile game publisher. Sustainable blockchain gamingFor its part, GOMBLE’s objective is to enable the global casual gamer community to experience blockchain games through reward mechanisms that are sustainable. An additional focus for the project is advancing NFT interoperability, through the development of mobile-based blockchain.The start-up plans to use the funding in order to develop and release its first mobile game, RumbyStars. Furthermore, it will continue to pursue a games-as-a-service (GaaS) model, with funding also being used to expand that GaaS-based platform.While blockchain-based gaming had something of an initial breakthrough through the emergence of Axie Infinity, that success was secured with a focus on blockchain rather than gaming, attracting participation via a play-to-earn approach from those already focused primarily on blockchain. Subsequently, many have questioned the sustainability of this approach from the perspectives of gameplay and the tokenomics that support it. A $25 billion market opportunityGOMBLE is focusing on addressing these two factors through its approach. Casual games in the Web2 sphere have seen an uptick in popularity. The casual games sector has the potential to reach a $25 billion market volume within four years. Bringing that Web3 focus on enjoyable game play to Web3 gaming extends that opportunity to blockchain-based gaming.Additionally, GOMBLE is working towards mistakes made with blockchain based gaming tokenomics in the past. It will focus on more balanced tokenomics using its $CRT token for governance. $CRT can be earned by players through a tournament prize system. From the other perspective, it can be spent on NFT purchases, tournament passes and in buying in-game items.This is how Yi He, Head of Binance Labs interprets GOMBLE’s approach: “Blockchain gaming needs to move away from the concept of ‘earning’ to what truly captures the hearts of billions of gamers: entertaining gameplay. GOMBLE’s experienced team and focus on building engaging, social, and sustainable blockchain games with flexible governance offers a pathway for delivering the value of Web3 to existing casual gamers, thus welcoming new users to the BNB Chain ecosystem.” RumbyStarsThe blockchain gaming start-up is planning for a soft release of its first game, RumbyStars within SouthEast Asia in Q2, 2023. Following that limited regional launch, the project will then broaden the offering to North America, South America, East Asia and Europe.Gomble’s CEO Jihoon Byun said that “Unlike existing blockchain games that focus on core games, GOMBLE aims to target the global market with easy and fun casual games that even non-gamers can enjoy. Starting with RumbyStars, GOMBLE is focused on building to provide users around the world with a pleasant experience and a greater diversity of games in the future.”In order to execute on the roadmap the project has set out for itself, it will recruit more development and design manpower. Furthermore, investment will be made in infrastructure in order to enable real-time service.

After being targeted in a $1.4 billion hack, the global crypto exchange platform Bybit was awarded in-principle approval to establish itself as a Virtual Asset Platform Operator (VAPO) within the United Arab Emirates (UAE). While Bybit announced the milestone via a press release published on Feb. 27, the approval had been awarded on Feb. 18, three days before the platform was hacked.Photo by Saj Shafique on UnsplashRegulatory challengesIn addition to the recent exploit, the crypto exchange platform had been having difficulties on the regulatory front in recent months, and from that perspective, this licensing award is a welcome development. Last December, the Malaysian Securities Commission reprimanded the platform and its CEO, Ben Zhou, for carrying out digital asset trading activities in Malaysia without having obtained the necessary licensing. Consequently, the firm left the Malaysian market, promising to return once it had obtained the required licenses. For similar reasons, Bybit left the Indian market in January, citing a need to “operate in full compliance” with local regulations. The company said that it was working with the regulator to finalize its registration as a Virtual Asset Service Provider (VASP) in India. The platform also experienced difficulties in complying with the recently introduced Markets in Crypto Assets (MiCA) regulation in Europe. However, it has been working with regulators in Austria in an effort to acquire MiCA licensing. Consequently, the French regulator, Autorité des Marchés Financiers, removed the firm from its blacklist. Earlier this month, Japan’s Financial Services Agency (FSA) ordered Apple and Google to remove the apps of a number of unregistered crypto platforms, including Bybit, from the Japanese versions of their app stores.  Commenting on this recent achievement in the UAE, Ben Zhou stated: “This approval marks a crucial step in our journey to providing secure and transparent crypto trading solutions. Bybit remains dedicated to working hand-in-hand with regulators to foster a compliant and innovative digital asset ecosystem to both retail and institutional investors in the UAE.” Hack falloutIt’s unclear to what extent the recent hack, which is understood to be one of the largest thefts of any kind, may be diverting resources and focus away from the efforts the company was making to address regulatory issues globally. However, it’s reasonable to assume that recent events make for a challenging time for the company. On Feb. 26, the Federal Bureau of Investigation (FBI) in the United States said that North Korea was responsible for the hack. The agency warned exchanges to freeze transactions linked to the stolen funds. The FBI outlined that “TraderTraitor” actors have been converting the funds to Bitcoin and other digital assets in an effort to launder the funds and eventually extract the funds in fiat currency. North Korea’s Lazarus hacking group has gained notoriety for its successes in hacking crypto platforms and the sophisticated nature of the attacks mounted in the process. The group is suspected of having hacked the Indian crypto platform WazirX last year, which resulted in the theft of $235 million in digital assets.

Hong Kong-based ZA Bank has published a “2023 in review” blog post that suggests that the virtual bank is preparing to bring virtual asset trading to retail customers through its ZA Bank App.Photo by David McBee on PexelsEmbracing retailIn the blog article which was published to its website last week, Hong Kong’s largest virtual bank expressed its dedication to bolstering Hong Kong’s aspiration to emerge as a global hub for Web3. As the city embraces a new licensing regime for virtual asset trading platforms, ZA Bank unveiled its plans to introduce fiat currency-based virtual asset trading services for retail investors through the ZA Bank App. The bank first aired the notion of such an offering back in May. Its renewed coverage of the topic would seem to suggest that such a product offering is much closer to launch. Additionally, the bank anticipates the launch of its U.S. stock trading service after obtaining necessary approvals, promising a stream of innovative and exciting services in the future. Regulatory trendNews of the bank’s proposed retail offering aligns with moves being made by local regulators over the course of recent months to enable retail access to crypto-based products within the Chinese autonomous territory. In June, a regulatory framework was put in place by the Securities and Futures Commission (SFC) to enable licensed virtual asset platforms to market to retail investors. In recent days it has emerged that regulators are prepared to accept applications for spot crypto exchange-traded fund (ETF) products which would be made available to retail investors. Banking the crypto sectorZA Bank also announced that it has been providing banking support to more than 80 Web3 companies since the beginning of this year, aligning with its commitment to “Banking for Web3,” introduced in April. Notable among the roster of supported companies is OKX Hong Kong, with ZA Bank serving as the trusted banking partner for locally licensed virtual asset trading platforms (VATPs) such as HashKey and OSL. The bank, which was established by ZhongAn Online and Beststar in 2018, has served an important banking role in respect of the digital assets sector in Hong Kong in 2023. While the authorities in Hong Kong appear to have pulled out all of the stops over the course of the past year to nurture crypto business, banking was identified as an area of difficulty. In June, the Hong Kong Monetary Authority (HKMA) explicitly questioned the reluctance of some major banks to extend services to crypto companies, applying pressure on them to do so. Given that background, ZA Bank, being a first mover in embracing the industry, has played an important role in Hong Kong. ZA Bank’s impact is evident in its notable market presence, with one in 10 Hong Kong adults choosing the institution for their banking needs. The ZA Bank App earned the distinction of being the highest-rated banking app on Hong Kong’s Google Play in 2023. The bank has surpassed HKD 10 billion in customer deposits and secured the top spot in Asia in the Sia Partners 2023 International Mobile Banking Benchmark, maintaining the sixth position globally.