Korean National Assembly Members’ Crypto Holdings to Undergo Investigation

Dunamu reports Q3 slump amid interest rate hikes and economic slowdownDunamu, the operator of South Korea’s largest cryptocurrency exchange Upbit, posted a lackluster performance in this year’s Q3 due to a decrease in trading volume caused by ongoing interest rate hikes and an economic downturn.Photo by Алекс Арцибашев on UnsplashLagging performanceAccording to the Financial Supervisory Service (FSS), Dunamu’s consolidated operating revenue in Q3 was KRW 193 billion (approximately $150 million), marking a 29% decrease from the same period a year earlier (KRW 271.9 billion). Operating income came in at KRW 101.8 billion, and net profit was KRW 29.5 billion, down 39.6% and 81.6% from the same period last year, respectively.This underwhelming financial performance reflects the sluggish crypto market amid the nation’s economic downturn and the U.S. Federal Reserve’s interest rate hikes. The decrease in the exchange’s net profit in particular can be attributed to a loss in the valuation of crypto assets due to crypto price declines compared to the previous quarter.Positive outlookHowever, with the expected approval of the spot bitcoin exchange-traded fund (ETF) next year and the next Bitcoin halving, the market outlook is expected to improve gradually. Despite the current market conditions, Dunamu plans to continuously promote the mainstream adoption of blockchain services and explore new business ventures.“We will make efforts to revitalize the blockchain ecosystem and create an advanced investment environment,” Dunamu said. “We will strive to offer innovative services building on our unique technological capabilities.”

Binance and Gulf Energy launch digital asset exchange in ThailandThe world’s largest cryptocurrency exchange, Binance, has teamed up with Gulf Energy Development, a leading energy company in Thailand, to operate a digital asset exchange in the country.Photo by Than Diep on UnsplashInvitation-only launchThe new platform, Binance.th, aims to capture the growing demand for crypto services in Southeast Asia. Binance.th, which is currently in its beta testing phase, is expected to open to the public in early 2024. A filing on Wednesday by Gulf to the Thai stock exchange demonstrates that the platform has received approval from the Thai Securities and Exchange Commission to offer exchange and brokerage services for cryptocurrencies and digital tokens. The filing states:“Gulf Binance’s digital asset platform will provide digital asset exchange and digital asset broker services for both cryptocurrencies and digital tokens, prioritizing security and compliance with SEC regulations.”The platform is initially available by invitation only, and the plan is to eventually open the exchange to the general public. It’s understood that the platform will strive to provide a “globally standardized” service that will enhance the level of service in Thailand and promote the development of the country’s blockchain ecosystem.Market opportunityBinance.th enters the Thai crypto market at a time when the local leader, Bitkub, holds a dominant share of 75.4%. Bitkub benefited from the global crypto market downturn in 2022, which affected its competitors such as FTX and Zipmex.Although it has extended market share during the downturn and as a consequence of the demise of other platforms, Bitkub has also struggled with market conditions. In July its parent company Bitkub Capital Group, reduced headcount by six percent. Bitkub recorded $28.6 billion in trading volume last year, out of the total $37.94 billion generated by the top four Thai exchanges.Binance.th hopes to challenge Bitkub’s position by leveraging Binance’s global reputation and expertise in the crypto industry.Legal woesThe launch of Binance.th comes amid Binance’s legal and regulatory troubles in the U.S. and Europe. In September, the U.S. Securities and Exchange Commission (SEC) sued Binance, its U.S. subsidiary, and its founder Changpeng Zhao (CZ) for allegedly listing unregistered securities in the form of cryptocurrencies.In June, the SEC also accused CZ and Binance of illegally marketing its international platform to U.S. customers.Binance has been trying to improve its compliance and governance standards in response to regulatory scrutiny. The company has hired former regulators and executives from the traditional finance sector to lead its operations in various regions. Binance has also applied for licenses and registrations in several jurisdictions, such as the U.K., Singapore and Japan.The origins of this deal stem from a memorandum of understanding (MOU) signed between Binance and Gulf Energy in January 2022. The joint venture business which emerged acquired a digital operator license in Thailand in May of this year.By expanding its presence in Southeast Asia, Binance hopes to tap into the potential of the emerging crypto markets and diversify its revenue streams. Binance.th also marks the first bank-backed crypto exchange in Thailand, as Gulf Energy Development is partly owned by the state-owned Krung Thai Bank.

The Korea Insurance Institute (KII), an incorporated association that trains insurance professionals, has initiated a phased process to become South Korea's first institution to hold Bitcoin (BTC), while the national tax agency is moving to enlist private crypto custodians following a recent security breach, local media reported.Photo by Kanchanara on UnsplashThe non-profit KII has established a digital asset review committee to establish internal regulations for managing cryptocurrencies as institutional holdings, Yonhap Infomax reported. The move is designed to prepare for an upcoming legal framework governing Korean won-backed stablecoins. While retail crypto investment is legal in South Korea, corporate and institutional participation remains tightly restricted. However, the institute noted that KII could still acquire digital assets through an existing regulatory channel, as non-profit organizations are permitted to hold crypto wallets. The newly established committee will draft guidelines covering crypto operations, risk management, accounting and tax standards, and internal controls. Once the regulatory framework is in place, KII plans to spend its stablecoins to acquire BTC and Ethereum (ETH). Ha Tae-keung, president of KII, said the launch of the digital asset review committee could mark a new milestone for innovation in asset management within the finance and insurance industry. He added that the institute would seek to serve as a working model for a new financial system shaped by artificial intelligence and digital assets. Tax agency seeks custodians to manage cryptoIn parallel government developments, the National Tax Service (NTS) is pushing to select custody providers to manage confiscated digital assets as early as the first half of this year, according to a ZDNet Korea report.  The policy shift follows a security breach late last month, when confiscated cryptocurrency was stolen on two occasions after a mnemonic seed phrase was inadvertently disclosed in an NTS press release detailing on-site asset seizures from tax evaders. To prevent future breaches, an NTS task force launched earlier this month is developing comprehensive manuals for the confiscation, storage, and sale of digital assets. The group is also developing criteria for selecting custodians, including security standards, company size, and required insurance coverage under the Virtual Asset User Protection Act. A source familiar with the matter told ZDNet Korea that the NTS is assessing security standards and other key criteria ahead of selecting a custodian, adding that not all providers meet the strict requirements for government appointment. The NTS task force is also preparing to set up a dedicated digital assets division to oversee crypto issues, with final details to be determined in consultation with the Ministry of the Interior and Safety.