Web3 Security Startup Blockaid Raises $33M in Funding

Korea to Ban Virtual Asset Deposit Services from Next JulyDuring a recent criminal law seminar held at the Supreme Prosecutors’ Office, Park Min-woo, Director of the Capital Markets Bureau at the South Korean Financial Services Commission (FSC), underscored that starting next year, virtual asset service providers (VASPs) will no longer be permitted to offer deposit and management services for virtual assets. That’s according to a report by local crypto news outlet Digital Asset.This is seen as a response to the suspension of virtual asset deposits and withdrawals carried out by virtual asset yield platforms Haru Invest and Delio a few months ago.Photo by Mathew Schwartz on UnsplashLegal backgroundDirector Park referred to Article 7, Paragraph 2 of the Virtual Asset User Protection Act, clarifying that the intention behind this provision is to ensure that VASPs have the ability to fulfill asset withdrawal requests, even in the scenario where all their customers make such requests. This Act is scheduled to go into effect in July of next year, and Article 7 prohibits VASPs from entrusting customer assets to third parties.Deposit service providers receive cryptocurrency deposits and then distribute the resulting yields to their customers. In a bull market, these entities can manage yields on their own. However, in a flat or bear market, these asset managers may face challenges in paying yields unless they can generate profits by handing over customer assets to external custodians.Signs of giving upIn fact, centralized finance (CeFi) company HeyBit made an announcement last month, stating that it will discontinue its virtual asset deposit service starting from October 2. They cited this specific provision as the reason for their decision.Fraud chargesBoth Haru and Delio have been indicted by the Seoul Southern District Prosecutors’ Office on fraud charges.As an unregistered VASP, Haru suspended its deposit and withdrawal services on multiple occasions in June, causing substantial financial losses to numerous investors. This suspension was triggered by significant losses incurred at B&S Holdings, another unregistered entity to which Haru had entrusted virtual assets.Similarly, Delio, although registered, entrusted a considerable amount of virtual assets to Haru and Traum Info Tech but was unable to recover them.

Korea’s FSC Opposes Other Agencies’ Involvement in Virtual Asset BillAhead of the National Assembly’s passage of the virtual asset bill, the Korean Financial Services Commission (FSC) has repeatedly opposed the involvement of the Bank of Korea (BOK) and the Financial Supervisory Service (FSS) in regulating cryptocurrencies, according to the Korean newspaper Kukmin Ilbo.©Pexels/LukasFSC’s oppositionIn a document submitted to the National Assembly’s National Policy Committee, the FSC opposed stipulating the BOK’s right to request documents in the virtual asset bill. The agency argued that the bill is indirectly related to the BOK’s monetary and credit policy and that explicitly mentioning monetary and credit policy in the bill could lead to the misinterpretation of virtual assets as possessing the characteristics of currencies.The FSC also objected to stipulating the FSS’s right to inspect crypto enterprises. According to law, the purpose of the FSC is to inspect and supervise financial institutions. Explicitly stating the FSS’s right to inspect crypto enterprises could cause confusion to the public that they are financial entities.However, there are growing concerns about the FSC’s perceived intention to dominate virtual asset jurisdiction.At a small meeting held under the National Policy Committee last month, Lawmaker Yoon Han-hong of the ruling People Power Party expressed the view that the FSC should consider incorporating the BOK and the FSS in the virtual asset bill for crypto regulations. During the meeting, the FSC objected to the inclusion of a stipulation that excludes central bank digital currencies (CBDCs) from the definition of virtual assets. Meanwhile, the BOK agreed to include such a stipulation.Allowing class action suitsAccording to an internal document obtained by Kukmin Ilbo, the FSC also intends to allow class action suits for crypto investors. It seeks to add cryptocurrencies to a bill proposed for class action suits, which also deal with securities. Class action suits provide a means for victims to receive redress in cases where a representative is successful in winning the lawsuit against the offender.The FSC stated that it will follow the majority on the issue of whether the purpose of the virtual asset bill should include the phrase “to contribute to the development of the nation’s economy,” although it left a cautionary note that some might raise objections to this, considering the speculative nature of virtual assets.

United Arab Emirates (UAE)-based crypto market maker and Web3 investment firm DWF Labs has launched a $250 million fund for investment in mid to large-cap crypto projects. The company, which recently switched its administrative base from Singapore to Abu Dhabi, asserts that the fund will contribute towards the real-world adoption of Web3 technology. Photo by Towfiqu barbhuiya on UnsplashUp to $50M per projectTaking to X, DWF Labs Managing Partner Andrei Grachev announced the $250 million fund. He added:”Single ticket size ranged from 10 to 50M$ per a project. Cash + comprehensive support = Moon” In a statement published to the company’s website, DWF Labs outlined that the Liquid Fund initiative aligns with the firm’s commitment to contributing towards real growth within the broader crypto market. It stated: “The fund will provide strategic crypto venture capital and ecosystem support, ensuring sustainable growth for projects that drive real-world adoption and help promote change in the industry.” Initial dealsWork on the fund is already in motion. The company confirmed that it has already invested $11 million into promising blockchain projects as part of the initiative. Furthermore, DWF Labs confirmed that it is on the verge of signing two major investment deals with ticket values of $10 million and $25 million respectively. Beyond those deals, the firm asserts that other investment deals are in the pipeline. It clarified that the nature of the investment differs from traditional investments insofar as each deal incorporates a full-scale ecosystem growth strategy, devised specifically for the particular needs of each project. Grachev stated that the company believes “that strategic capital, coupled with hands-on ecosystem development, is the key to unlocking the next wave of growth for the industry.” Key aspects being considered by the company when formulating ecosystem growth strategies relative to targeted blockchain projects include public relations (PR) and brand amplification, a comprehensive go-to-market (GTM) strategy, lending markets development and a focus on stablecoin total value locked (TVL), with supporting liquidity and DeFi activity relative to layer-1 and layer-2 projects. Focus on ‘usability and discoverability’Grachev told Cointelegraph that emphasis will be placed on investing in blockchain projects that stand out in terms of “usability and discoverability.” He added that “good technology and utility alone isn’t sufficient,” asserting that "users first need to discover these projects, comprehend their value and develop trust." The DWF Labs managing partner suggested that strategic capital, together with hands-on ecosystem development, is paramount relative to efforts to realize the next iteration of growth within the crypto sector. Up until the end of last year, DWF Labs was headquartered in Singapore and still maintains a presence there. Besides Abu Dhabi, it also has a physical presence in Dubai. Hong Kong, Switzerland, South Korea and the British Virgin Islands (BVI) account for the locations of the remainder of its international offices. While Grachev and his firm can be assumed to have a positive broader view on the cryptocurrency sector given the launch of this latest fund, the DWF Labs managing partner recently pointed to a more immediate potentially bearish trend in the market.