South Korean FIU rejects Hanbitco’s bid to become fiat-to-crypto exchange

Bitget Exec Speaks to Utility of Enhanced KYCCrypto continues to undergo significant transformation as regulatory authorities across Asia tighten their grip on the industry. In response to these regulatory changes, Seychelles-headquartered Bitget has joined KuCoin and OKX, which have recently bolstered their Know Your Customer (KYC) measures to ensure compliance and safeguard their operations.In a recent interview with Cointelegraph, Bitget Managing Director Gracy Chen spoke to the utility of KYC measures, stating that KYC is useful in filtering out illegitimate users, particularly those engaged in activities such as money laundering.Photo by Pixabay on PexelsMeeting Asian regulatory requirementsThe Seychelles-based exchange with ties to China and Singapore recently announced updates to its KYC protocols. These changes come in the wake of the Monetary Authority of Singapore’s (MAS) directives, which advise financial institutions, including cryptocurrency exchanges, to implement robust risk management procedures. The MAS has taken a stringent stance, shutting down certain digital payment token service providers to prevent them from facilitating lending and staking activities by retail customers.Starting from October 1, Bitget will require users who have not completed level 1 KYC verification to be restricted from creating new trading orders. This move aims to ensure that users comply with the newly updated guidelines and maintain the integrity of the exchange’s operations.Following industry peersKuCoin and OKX, two other prominent exchanges which, like Bitget, have their corporate headquarters in Seychelles and a strong presence in Asia, have also revamped their KYC policies. While KuCoin initially introduced KYC in 2018, the exchange has strengthened its identity verification procedures, requiring users to upload documents and complete face checks.Furthermore, in July, it announced a mandatory KYC requirement, in line with anti-money laundering (AML) regulations. While the mandatory KYC requirement is already in force, the other changes are set to take effect at the end of the month.OKX, on the other hand, has implemented stringent requirements, including the submission of a government-issued ID selfie for users to access all its services. The exchange recently set a deadline for service users to complete KYC.Bitget’s Chen highlighted that its decision to embrace KYC measures was driven by a commitment to serving the market responsibly. She acknowledged that while some users may have reservations about KYC, it is a necessary step to maintain the integrity of the exchange and prevent illicit activities. Speaking at the fringes of the firm’s EmpowerX Summit in Singapore, Chen said:“I’m pretty sure if the user is a financially healthy user, such as, like, if they’re not doing something illegitimate, such as money laundering, they should be pretty comfortable with the KYC process.”Tightening regulationThe tightening of regulations in Asia is not limited to Singapore alone. Japan has also taken steps to enhance anti-money laundering measures related to cryptocurrency transactions, responding to international calls for stricter oversight. Additionally, South Korea’s Financial Services Commission (FSC) has announced plans to require companies to disclose details about their cryptocurrency holdings, expected values, and related business models in their financial statements, aligning crypto accounting with conventional financial reporting.These regulatory developments signify a broader trend in the region, with cryptocurrency service providers proactively adapting to the changing landscape. As governments and regulatory authorities take steps to address the potential risks associated with cryptocurrencies, exchanges are prioritizing compliance to ensure their longevity and continued growth.

Hong Kong is gearing up for the potential approval and implementation of both bitcoin exchange-traded funds (ETFs) and stablecoin regulations in 2024, with further progress achieved through the first filing of a spot bitcoin ETF in the Chinese autonomous territory.Photo by André François McKenzie on UnsplashHarvest Fund filesHarvest Fund (HFM), a major asset manager based in China, has taken the lead by filing for a spot bitcoin ETF with the Hong Kong Securities and Futures Commission (SFA), as reported by Tencent News. While details on the Harvest Fund bitcoin ETF remain limited, the company is hoping for its debut on or after the Lunar New Year holiday, which lands on Feb. 10. Reports suggest that Hong Kong's regulatory body may follow a path similar to the U.S. SEC, approving multiple spot bitcoin ETF applications to ensure fair market access. Although Harvest Fund was the first to apply, other regional financial institutions have expressed interest in launching similar products within the year. Livio Weng, Chief Operating Officer of crypto exchange HashKey, revealed that approximately ten asset management firms are developing spot crypto ETFs for Hong Kong, with applications already submitted to the Hong Kong Securities Regulatory Commission. Earlier this month, Venture Smart Financial Holdings (VSFG) announced its plan to launch a spot bitcoin ETF within the first quarter of this year, contributing to the growing momentum. Stablecoin interestIn tandem with the push for spot crypto ETFs, there is a rising interest in stablecoins. Multiple Hong Kong companies, including Harvest Global Investments, RD Technologies and VSFG, are reportedly engaging in discussions with the Hong Kong Monetary Authority (HKMA) about potential stablecoin trials. These trials aim to explore use cases ahead of anticipated stablecoin regulations in Hong Kong. The HKMA's December consultation paper outlined licensing requirements for fiat-pegged stablecoins, positioning them as a bridge between traditional finance and crypto markets. Sean Lee, senior advisor and head of stablecoin at VSFG, told The Block that it is committed to applying for sandbox inclusion, along with consortium partners, to showcase the potential of programmable digital money while meeting prudential requirements. An HKMA spokesperson confirmed ongoing preparations for the imminent launch of the stablecoin sandbox arrangement. The key criterion for applicants is a demonstrated commitment to a reasonable plan for issuing fiat-reference stablecoins (FRS) in Hong Kong. FRS refers to fiat-reference stablecoins pegged to the value of a fiat currency and backed by a government-issued currency, aligning with the most common stablecoin model. Eddie Yue, CEO of the HKMA, highlighted the potential of stablecoins, stating they could serve as the interface between traditional finance and the virtual asset market. The parallel development of spot crypto ETFs and stablecoin regulations underscores Hong Kong's commitment to fostering digital assets while ensuring investor protection through effective market oversight. Crypto ETFs offer expanded access, while stablecoin trials enable controlled experimentation, establishing gateways between traditional finance and the emerging crypto sectors.  

Nasdaq-listed Bitcoin Depot, an American cryptocurrency ATM specialist, is expanding into Hong Kong, citing the city’s burgeoning status as a crypto hub and rapid digital asset adoption across Asia. The Atlanta-based company, which provides kiosks for converting cash into cryptocurrency, went public in July 2023. Its move into Asia follows a recent acquisition of assets from National Bitcoin ATM that boosted its domestic market share to a reported 30% as well as the strengthening of its compliance program. "Hong Kong is quickly becoming a global center for crypto, with the right mix of regulation, demand, and momentum," company president Scott Buchanan said in a Nov. 12 statement.Photo by Keller Chewning on UnsplashHong Kong's digital asset pushBitcoin Depot’s expansion aligns with a concerted push by the special administrative region to position itself as a global hub for digital assets. Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), recently highlighted this ambition, which was underscored by a Nov. 11 announcement of an additional HK$10 billion ($1.3 billion) issuance of digital green bonds. The tokenized bond issuance, the third under the government's program, was denominated in Hong Kong dollars, Chinese yuan, U.S. dollars, and euros, and involved major banks like HSBC, BNP Paribas, and J.P. Morgan. The move also reflects a broader regional trend. In September, Tokyo-based Coinhub launched Japan's first officially registered crypto ATM network, installing 25 machines with plans to expand to 3,000 nationwide. Industry faces regulatory headwindsDespite the growth, the industry faces scrutiny from law enforcement over the use of crypto ATMs in criminal activity. In 2024, the FBI logged nearly 11,000 fraud complaints tied to the kiosks, with reported losses topping $246 million. According to Cointelegraph, increased regulatory attention has prompted several U.S. cities to ban crypto ATMs outright, while some states are introducing new restrictions. Concerns are growing over scams targeting vulnerable groups, especially seniors. Regulatory pressure is also mounting elsewhere. Australia's financial crimes watchdog, AUSTRAC, issued a $56,340 infringement notice last month to local operator Cryptolink, which the company paid. Cryptolink must now appoint third-party reviewers to ensure its anti-money laundering and counter-terrorism financing (AML/CTF) controls are adequate. The action followed findings from AUSTRAC’s Crypto Taskforce that 85% of transactions by the 90 most frequent crypto ATM users were linked to scam proceeds or money mule operations. AUSTRAC CEO Brendan Thomas urged the public "to be cautious of making transactions to any wallet they don’t control and thinking twice in circumstances where someone asks you to deposit money into a crypto ATM.”