Zodia Custody, a digital asset custody service provider backed by Standard Chartered, has reportedly expanded its operations in Hong Kong. According to a report by The Block, Zodia Custody has obtained a trust license from the Hong Kong Monetary Authority (HKMA), which allows it to offer custodial services for cryptocurrencies and other digital assets in the city.
Zodia Custody was launched in December 2020 as a joint venture between Standard Chartered and Northern Trust, a global asset management firm. The company aims to provide institutional-grade custody solutions for cryptocurrencies, such as Bitcoin, Ethereum, XRP, Litecoin and Bitcoin Cash. Zodia Custody claims to combine the security and compliance standards of traditional finance with the innovation and agility of the crypto industry.
The expansion of Zodia Custody in Hong Kong is a sign of the growing demand for digital asset custody services in the region, especially from institutional investors. Hong Kong is one of the leading financial hubs in Asia and has been attracting crypto-related businesses with its supportive regulatory environment and vibrant ecosystem. Zodia Custody is not the only crypto custodian operating in Hong Kong. Other players include Hex Trust, BC Group and OSL.
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Zodia Custody’s CEO, Maxime De Guillebon, said that the company is committed to supporting the development of the crypto industry in Hong Kong and beyond. He added that Zodia Custody will leverage its global network and expertise to offer customized solutions for its clients, while adhering to the highest standards of governance, risk management and compliance.
Zodia Custody is also planning to expand its services to other jurisdictions in the future, such as Singapore, Switzerland and the UK. The company said that it is working closely with regulators and industry associations to ensure that its offerings are aligned with the evolving regulatory frameworks and best practices for digital asset custody.
Zodia Markets receives virtual asset service provider registration in Ireland.
Zodia Markets, a leading provider of digital asset custody and brokerage services, has announced that it has obtained a virtual asset service provider (VASP) registration from the Central Bank of Ireland. This is a significant milestone for the company, as it enables it to offer its services to clients across the European Union under the Fifth Anti-Money Laundering Directive (5AMLD).
5AMLD is a legal framework that aims to prevent the use of the financial system for money laundering or terrorist financing and introduces new requirements for virtual currency providers and custodian wallet providers, among others. It also lowers the thresholds for customer due diligence measures for electronic money and remote payment transactions.
Zodia Markets was launched in 2020 as a joint venture between Standard Chartered and Northern Trust, two global financial institutions with a strong track record in innovation and compliance. The company aims to bridge the gap between traditional finance and the emerging digital asset ecosystem, by offering institutional-grade solutions that meet the highest standards of security, governance and regulation.
Zodia Markets’ VASP registration in Ireland follows its earlier authorization by the UK Financial Conduct Authority (FCA) in July 2023. The company is also pursuing VASP registrations in other jurisdictions, such as Singapore and Hong Kong, to expand its global footprint and serve a diverse range of clients.
“We are delighted to receive our VASP registration from the Central Bank of Ireland, which demonstrates our commitment to operating in a robust and transparent regulatory framework. This will allow us to provide our clients with access to the European digital asset market, which is one of the most dynamic and fast-growing in the world,” said Maxime de Guillebon, CEO of Zodia Markets.
He added: “As a regulated digital asset custodian and broker, we are uniquely positioned to offer our clients a seamless and secure way to invest in this new asset class, while benefiting from the expertise and backing of two well-established financial institutions. We look forward to working with regulators, industry partners and clients to foster the development and adoption of digital assets in Europe and beyond.”
Taiwan proposes Crypto Bill with first reading passed at Parliament
Taiwan has taken a major step towards becoming a crypto-friendly jurisdiction, as the island nation’s parliament passed the first reading of a bill that aims to regulate cryptocurrencies and digital assets. The bill, titled “Digital Asset and Cryptocurrency Management Act”, was proposed by a group of lawmakers from the ruling Democratic Progressive Party (DPP) and the opposition Kuomintang (KMT) parties. The bill seeks to provide a clear legal framework for the development and innovation of the crypto industry in Taiwan, while also protecting the rights and interests of investors and consumers.
According to the bill, digital assets are divided into two categories: cryptocurrencies and digital tokens. Cryptocurrencies are defined as decentralized digital currencies that use cryptography to secure transactions and control the creation of new units. Digital tokens are defined as digital representations of rights or interests in goods, services, or assets. The bill also distinguishes between two types of digital asset service providers: custodial and non-custodial.
Custodial service providers are those who hold or manage digital assets on behalf of their customers, such as exchanges, wallets, or custodians. Non-custodial service providers are those who do not hold or manage digital assets for their customers, such as peer-to-peer platforms, decentralized applications, or smart contracts.
The bill stipulates that both custodial and non-custodial service providers must obtain a license from the Financial Supervisory Commission (FSC), the main financial regulator in Taiwan, before operating in the country. The FSC will also be responsible for overseeing and enforcing the compliance of digital asset service providers with relevant laws and regulations, such as anti-money laundering, consumer protection, and cybersecurity.
The bill also imposes certain obligations on digital asset service providers, such as conducting due diligence on their customers, reporting suspicious transactions, maintaining adequate capital and reserves, and disclosing information on fees, risks, and disputes.
The bill also grants certain rights and protections to digital asset holders and users, such as the right to access their own digital assets, the right to request refunds or compensation for losses caused by fraud or negligence of service providers, and the right to file complaints or lawsuits against service providers for breach of contract or violation of laws. The bill also establishes a dispute resolution mechanism for digital asset-related disputes, which will involve mediation by the FSC or arbitration by a designated institution.
Taiwan is poised to become one of the most progressive and forward-looking countries in Asia when it comes to crypto regulation. Taiwan stands out as a leader in creating a supportive and innovative regulatory framework. The island nation has been proactive in embracing the potential of blockchain technology and digital assets, while also ensuring consumer protection and financial stability.
Taiwan’s approach to crypto regulation is based on three main principles: flexibility, inclusiveness and experimentation. Flexibility means that the regulators are willing to adapt to the changing needs and challenges of the crypto industry, rather than imposing rigid and outdated rules. Inclusiveness means that the regulators are open to dialogue and collaboration with various stakeholders, including crypto exchanges, developers, investors and academics. Experimentation means that the regulators are supportive of pilot projects and sandbox initiatives that allow for testing new ideas and solutions in a controlled environment.
One of the key achievements of Taiwan’s crypto regulation is the establishment of the FinTech Regulatory Sandbox Act in 2018, which allows for innovative financial services to be offered without being subject to existing regulations for up to one year. The sandbox has enabled several crypto-related projects to launch and operate in Taiwan, such as a blockchain-based identity verification system, a crypto custody service and a tokenized real estate platform.
Another milestone of Taiwan’s crypto regulation is the recognition of security tokens as securities under the Securities and Exchange Act in 2019, which provides legal clarity and certainty for issuers and investors of such tokens. The regulators have also issued guidelines for initial coin offerings (ICOs) and anti-money laundering (AML) compliance for crypto businesses, as well as encouraged self-regulation by industry associations.
Taiwan’s crypto regulation is not only progressive but also forward-looking, as the regulators are constantly monitoring the global trends and developments in the crypto space and seeking to learn from best practices. Taiwan is also actively participating in international forums and initiatives on crypto regulation, such as the Financial Action Task Force (FATF) and the Global Blockchain Policy Forum. By creating a conducive and competitive environment for crypto innovation, Taiwan is poised to become one of the most progressive and forward-looking countries in Asia when it comes to crypto regulation.
Taiwan is ahead of many other countries in Asia and beyond in terms of its regulatory vision and support for the crypto industry. While some countries have banned or restricted crypto activities, Taiwan has adopted a balanced and pragmatic approach that fosters innovation while mitigating risks. Taiwan has also shown leadership and cooperation in shaping the global standards and norms for crypto regulation, contributing to the development of a more harmonized and interoperable framework.
The bill is seen as a positive development for the crypto industry in Taiwan, as it will provide legal certainty and legitimacy for digital asset activities and transactions. The bill will also foster innovation and competition in the crypto space, as it will encourage more entrepreneurs and investors to enter the market. Moreover, the bill will enhance consumer protection and investor confidence, as it will prevent fraud, money laundering, and other illicit activities involving digital assets.
The bill still needs to pass two more readings in parliament before becoming law. However, given the bipartisan support and public interest in the bill, it is expected that it will be enacted soon. Taiwan is poised to become one of the most progressive and forward-looking countries in Asia when it comes to crypto regulation.