Maxonrow Joins the Blossoming Blockchain Industry in Kuala Lumpur and Taipei

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by Maria Konash · 5 min read

One of the emerging blockchain firms in the space, Maxonrow, views the growth of blockchain in Southeast Asia as an opportunity to set a precedent of cooperation between government agencies and blockchain enterprises.

The prominence of Asia in the ongoing progress of the blockchain industry has not been overlooked. From the influence of Chinese capital flight on the medium-term spot price of Bitcoin to the myriad firms based in Southeast Asian cities like Hong Kong, the Asian market is a key driver of blockchain innovation and cryptocurrency markets.

In particular, Singapore has emerged as a blockchain and crypto hotbed. For example, Binance, the massive cryptocurrency exchange, recently launched a fiat-to-crypto on-ramp exchange in the small nation-state. In addition, a sovereign wealth fund of Singapore, GIC Private Limited, was one of the backers of Coinbase’s $300 million funding round last year.

These developments coincide with an increasingly clearcut set of rules and guidelines for crypto assets, ICOs, and blockchain-oriented companies in Singapore.

One of the emerging blockchain firms in the space, Maxonrow, views the growth of blockchain in Southeast Asia as an opportunity to set a precedent of cooperation between government agencies and blockchain enterprises.

Slow Pace of U.S. Regulatory Action

The SEC’s recent launch of an investigation into Candian firm Kik Interactive, Inc regarding their 2017 ICO sale as an “unregistered securities sale” highlights several critical areas in the regulatory process of crypto in the U.S.

First, the enforcement action taken by the SEC, though decisive, sends more mixed signals on their position concerning digital assets. For example, SEC Director of Corporate Finance, William Hinman, articulated at the end of May how some ICOs may be subject to “no action” letters, such as the case with TurnKey Jets.

Subsequently, the SEC launched their investigation into Kik less than a week later. Not to say that the SEC’s case against Kik isn’t strong, which it reportedly is, but the muddled view of the SEC’s position is confusing at best. SEC Chairman Clayton cited most ICOs as securities last year, but the agency has gone on to pursue less than 10 percent of the ICOs detailed by the SEC in their case against Kik.

They may have chosen Kik specifically to make an example, considering it raised $100 million in its ICO, but definitive guidelines are necessary to clarify the picture for investors, developers, and token issuers.

Without a transparent regulatory framework, Asian markets are continually looking like ripe opportunities for blockchain companies to gain an early advantage – and they are taking notice.

“Maxonrow truly believes in the power of blockchain and envisions the world being positively impacted by this technology, but only if properly governed,” details Maxonrow CEO, Mark Homeier. “Southeast Asia’s willingness to have an open mind about digital assets and blockchain technology makes it congruent with our vision.”

Asia Absorbing Blockchain Innovation

As major industry players (i.e., BitMEX) continue to geo-block U.S. customers from their platforms, firms and users are fleeing the shores of the U.S. As such, areas like Singapore, Taipei, Kuala Lumpur, and Hong Kong have become some of the most desired locations

Singapore’s SGX stock exchange’s regulatory agency, SGX RegCo, has even established a set of rules for listing and issuing ICOs and blockchain-related firms on the market. The processes involved include disclosures such as strict KYC/AML checks, an area that Maxonrow is targeting.

“In Maxonrow ecosystem all users must have gone through a KYC/AML verification to use the system, and the whitelisting signature and the wallet addresses together with the KYC verification all are recorded into the Maxonrow Blockchain,” says Homeier. “Government authorities will be able to audit and, while identity is still encrypted, it could be traced back to an individual much like a normal bank account.”

The move is representative of a broader trend for incorporating government regulation into blockchains and digital asset projects, such as exchanges. Maxonrow affords users the ability to maintain control over their data, but it is subject to review by the government when necessary – such as in the case of a criminal investigation.

Collaboration between governments and blockchain projects – especially those dealing in trading digital assets – is becoming more necessary. For example, Binance has partnered with CipherTrace, a blockchain analytics firm, in a recent compliance push with the Maltese government. The goal is to reduce instances of exchange hacks becoming instruments for money laundering, particularly when hacks sometimes equate to tens of millions in stolen funds.

“A civil society requires the authorities to have the tools to enforce the law. In spite of blockchain’s great potential to bring transparency and level the playing field many cryptocurrencies are inherently anonymizing and against any form of authority,” says Homeier. “This paradox is probably one of the most complicated to reconcile. Maxonrow isn’t attempting to impose a legal hegemony on the blockchain, we simply give a method for audit and accountability. We have had great interest from a number of governments”.

The compromise between the legal autonomy of users and the willingness of governments to enable the industry is what is pulling firms from the U.S into the Asian market. The lack of an enabling regulatory framework in the U.S. is a prohibitive factor in fostering blockchain innovation, and Maxonrow’s experience in Asia, Latin America, and many Pacific nations is a marked indicator of that trend. Should that trend continue, look for the role of Asia in blockchain’s technological progress to take the global lead.

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Maria Konash
Editor-in-Chief Maria Konash

Being a successful graduate of Belarusian State Economic University (BSEU), Maria has acquired competencies in economic and social studies. Given Maria’s previous research working experience, and desire to explore what's really shaping the future, the main research focus is placed on FinTech and Blockchain Technology.