Former SoftBank Executive Launches Stablecoin in Abu Dhabi

KCS Says Illegal Forex Transactions for Crypto Purchases Amount to $7.7BOver the past five years, the total value of illegal foreign exchange transactions associated with virtual asset purchases has amounted to approximately KRW 10.4 trillion ($7.7 billion), according to the Korea Customs Service’s report received on Thursday by Go Yong-jin, a member of the Democratic Party of Korea on the National Assembly’s Strategy and Finance Committee.Photo by Sasun Bughdaryan on Unsplash“Illegal transactions on foreign exchanges for the purchase of virtual assets are occurring due to the higher prices of virtual assets in Korea compared to prices abroad,” Go explained.Crimes incited by crypto waveThe data showed that the number of violations subject to fines was 6,066, involving forex transactions of KRW 2.3 trillion. In particular, violations made in 2020 and 2022 accounted for the majority, making up 78.7% with 4,775 cases and a value of KRW 1.9 trillion, or 83.7% of the cumulative total. This indicates a substantial increase in illegal activities during the periods when the crypto investment frenzy in Korea was at its peak.Uncovering key patternsWhile foreign exchange transactions were primarily intended for acquiring virtual assets, they were often disguised as trade payments. There were also cases where individuals withdrew foreign currency from overseas ATMs to buy cryptocurrencies. These two scenarios were the most prevalent cases for which fines were imposed. More specifically, among the 6,066 violations, there were 4,518 instances of the former and 1,486 cases of the latter. The transferred funds amounted to KRW 1.9 trillion and KRW 407 billion, respectively.During the five-year period, individuals involved in 93 cases of these forex activities — collectively valued at KRW 8.1 trillion — were penalized following the referral of their cases to prosecutors. In particular, the violations in 2022 accounted for 70.3% (KRW 5.7 trillion). This could be accredited to the breakout of suspicious large-scale forex transactions last year, which prompted local authorities such as the Korea Customs Service and the Financial Supervisory Service (FSS) to initiate planned investigations.The most common type of illegal foreign exchange transaction cases referred to prosecutors was similar to those that incurred fines: overseas remittances disguised as trade payments, constituting 49.9% (KRW 4 trillion) of all cases. Transferring foreign currency via unregistered entities was the second most common violation, making up 47.2% (KRW 3.8 trillion). These transfers breach the Foreign Exchange Transactions Act and are always reported to prosecutors.Go thereby called on authorities to intensify crackdowns on illegal forex transactions aimed at trading virtual assets and to revise foreign exchange regulations accordingly.

Hong Kong's financial watchdog, the Securities and Futures Commission (SFC), has issued a stern warning against two crypto investment schemes, namely the "Floki” and “TokenFi” staking programs. Offering high annual returnsThese programs, luring investors with enticing promises of annual returns ranging from 30% to over 100%, have triggered concerns within the regulatory authority due to their lack of authorization and questionable nature. In an update issued on Friday, the SFC emphasized that both Floki and TokenFi's staking offerings have not been granted approval for public offerings. Furthermore, the administrators of these programs have failed to provide convincing explanations about the feasibility of achieving such unusually high returns. The SFC cautioned that engaging in staking arrangements involving virtual assets without proper authorization may constitute unauthorized collective investment schemes.Photo by Sigmund on UnsplashUnsustainable yieldThe watchdog expressed its worry about the legitimacy of these staking programs, highlighting that neither has received the necessary authorization to provide services to the public in Hong Kong. Investors participating in these programs would not be protected under the SFC's regulations, potentially exposing them to significant financial losses. With the failure of many crypto platforms in 2022, a number of industry commentators began to question the sustainability of some public offerings. One such commentator, Allen Farrington, General Partner at bitcoin-native venture capital firm Axiom, repeatedly asked, “Where does the yield come from?” That appears to be the SFC’s concern in this instance. In its statement, it reaffirmed its commitment to upholding regulatory standards and safeguarding investors from fraudulent schemes. It warned that any breach of the law, including the promotion of unlicensed collective investment schemes, will result in appropriate legal action. Elon Musk-inspired meme coinFloki, initially conceived as a meme-coin inspired by Dogecoin, a project associated with Elon Musk, has evolved into a comprehensive Web3 project spanning decentralized finance, NFTs and the metaverse. TokenFi is a crypto and asset tokenization platform under the Floki umbrella, which aims to capitalize on the booming trillion-dollar tokenization industry. TokenFi, denoted by the ticker TOKEN, seeks to simplify the crypto and asset tokenization process with aspirations of becoming a leading platform globally. Launched last October, TokenFi operates as a multichain tokenization platform on both Ethereum and Binance Smart Chain. While both Floki and TokenFi offer distinct staking programs, they share a close integration. Stakers under the Floki scheme gain access to a significant portion of TokenFi's supply, while TokenFi stakers earn TOKEN rewards through a user-friendly interface. In the broader context of crypto staking, the practice allows users to earn rewards by contributing to a blockchain's security through the proof-of-stake mechanism. By staking cryptocurrency, users participate in a staking pool, similar to depositing money into a savings account. Staking rewards typically range from 5-20%, attracting investors seeking profitable opportunities. However, caution is advised against schemes promising unrealistic returns. The SFC, in collaboration with the Hong Kong Police Force, established a dedicated working group last year to enhance vigilance and enforcement in the evolving crypto sector. 

The Seoul AI Innovation Tour 2024 – scheduled from March 5 to 7 – came to an end yesterday, Korean media outlet ETNews reported. Under the theme of “Navigating the Future: Unveiling Seoul’s Prowess in AI Innovation,” the event highlighted Seoul’s potential as an AI technology hub and facilitated discussions on global cooperation to foster the Asian fintech and digital asset industry.  The event was jointly hosted by the Korea Fintech Industry Association (KFIA) and The Asian Banker, a Singapore-based consultancy in finance and banking services. Several major Asian banks and fintech industry insiders attended the event, including officials from Permata Bank in Malaysia and Bank SinoPac in Taiwan. Photo by Headway on UnsplashLee Keun-ju, President of the KFIA, stated in his opening speech that cutting-edge technologies such as AI will further accelerate innovation in financial services. He also emphasized how the Korean financial and fintech industry developed at a breakneck speed over the past decade, introducing the landscape of the Korean fintech industry to bank officials.  Sharing insights on fintech and digital asset industry In the initial session, KFIA officials delivered speeches on the current financial environment of Korea and the association’s contributions to the local fintech industry. The following discussions revolved around development strategies for the fintech industry and collaborative efforts between the association and government institutions. In the later part of the event, leading local fintech insiders discussed the outlook of the security token offering (STO) and digital asset industry, sharing strategies to broaden their businesses to overseas markets.