February 2023: Rules of the Road Ahead

February 2023: Rules of the Road Ahead

February 28, 2023

In our last piece, we talked about Crypto's 2023 New Year's resolution to restore confidence in the industry through enhanced security, transparency, and better market structures. It's not an easy task, but an achievable one if everyone plays their part. And it looks like that is finally starting to happen. 

Regulatory frameworks are taking shape, major players are upping their transparency game, and to top it off, the markets are starting to pick up. The knock-on effects of the FTX scandal may not have fully settled, but it has already served as a valuable lesson for the industry: the only way forward is to play by the rules.

Rules are like the base foundation of a house. If they're shaky, the whole building can come crashing down. But if they're structured the right way, investors feel protected and service providers know what's expected of them. The sense of security attracts more institutions to the space, and creates a solid base for growth and innovation. 

Earlier this month, the SEC proposed a framework for qualified custodians in the US. At the same time, the SFC in Hong Kong began developing its own guidance to protect investors and provide clarity to virtual asset service providers.

However, the SFC’s proposed framework doesn't mandate independent custody, which means the exchanges themselves are the only ones licensed to safeguard client assets. This is a missed opportunity, and it must be addressed if Hong Kong is to regain its position as a leader in the digital asset industry. 

We need to build a strong foundation for this industry. That starts with clear common-sense rules to protect investors, and a level playing field for all players. 

Can you hear me now?

But it’s not enough to just write about it on Twitter. We need to take action and make our voices heard on the global stage.

That's why our CEO & Co-Founder, Alessio Quaglini, went on CNBC TV to talk about the role that government bodies like the SEC can play in regulating centralized entities such as exchanges. It's time to cut through the noise, and work together towards a brighter future for this industry.

Custody as a business model has been around since the early days of finance itself, but it hasn’t always been in the spotlight. The downfall of companies like FTX is what really pushed the industry to pay more attention to the role custodians play, and why they’re needed for crypto to come back stronger and leaner. 

To learn about our experience on the ground in Asia, TVB News paid a visit to our office in Hong Kong. Alessio shared his thoughts on the growing demand for regulated and secure service providers in the digital asset space. He highlighted how institutional interest in digital assets is still going strong despite the industry's recent turmoil, and the need for enhanced investor protection. 

We’re going to continue making our voices heard, and shed light on how custodians can help enhance investor protection. 

Certified. Twice.

We believe that trust is earned, not given. That’s why we go the extra mile to get the right licenses and certifications – to ensure our clients’ safety and protection.

We’re proud to share that we obtained two more certifications the past month: our SOC 2 Type II and SOC 1 Type I certifications. These certifications represent our commitment to integrity and accountability, and are the result of incredibly in-depth and time-consuming assessments of our platforms and internal processes.

Providing global coverage across key financial hubs is another core pillar of our business. We received our MVP license from Dubai’s Virtual Assets Regulatory Authority (VARA) back in November 2022, and we’re excited to share that Hex Trust is now the first fully operational virtual asset custodian in the region.

Building tech & knowledge 

Japan's growing acceptance of Web3 technology has opened up new opportunities for startups in the sector, and we are proud to be part of this exciting development. Through our partnership with GMO-Z.com, we are providing institutional-grade custody for $GYEN, the first regulated Japanese yen stablecoin, making it easier for institutional players to enter the local digital asset ecosystem.

To be a leader in the industry requires more than technical expertise. We need to be thought leaders who can educate others on the industry’s development and challenges. That’s why we dedicate ourselves to not only advancing our technical capabilities, but to share our insights with the community.

Our latest report on blockchain scaling is a prime example. With an in-depth analysis of blockchain scaling, solutions that have emerged over time, and pioneering projects in the sector, learn about a topic that’s captivated the Web3 space since the early days of blockchains. 

Behind every great company…

…is a great team. All of these achievements wouldn’t be possible without our dedicated team, so we’d like to introduce you to some of them.

Filippo joined us in April last year as the Regional Director of MENA, and is now heading our operations in Dubai. He played a big role in setting up our newly opened office at the time, and most importantly, in obtaining our Dubai MVP license. A lover of techno music and crypto, Filippo is dedicated to cultivating digital asset growth in the MENA region. 

Get to Know Filippo

James has been with the Hex Trust team since 2021 as an IT Governance & Compliance officer. He ensures our internal controls and processes follow rigid industry standards, and attaining our SOC certifications wouldn’t have been possible without him. Fun fact: he’s one of the first 20 publicly listed Certified Cryptocurrency Security Auditors in the world. 

Get to Know James

We’re also excited to introduce Paolo Gagliano, the newest member on the Hex Trust Advisory Board. Bringing decades of senior experience in Corporate & Investment banking in Europe and Asia, we are dedicated to continue building a strong Advisory Board with high-profile and experienced industry veterans. 

Read the announcement 

The past few months have been challenging for the industry to say the least. But as they say, tough times don't last, tough people do. And our industry has proven just that.

In a growing industry, collaboration is key. Only through collective efforts from regulators, institutions, and market players will trust truly be restored in the industry. That's why we're committed to playing our part and upholding the highest standards of compliance and transparency.

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