LG CNS Chooses Six Startups to Foster Innovation in Digital Transformation

Civic Group Files Embezzlement Complaint Against Former Kakao Chairman Over KLAY TokensA South Korean civic group, known as Economic Democracy 21, filed on Wednesday a prosecution complaint against Kim Beom-soo, the former chairman of the internet giant Kakao, and several executives from Kakao’s affiliated companies. The allegations at hand pertain to embezzlement, specifically revolving around the virtual asset known as KLAY.Photo by Tingey Injury Law Firm on UnsplashKlaytn’s native tokenKLAY represents the native token of the Klaytn blockchain, which was developed by GroundX, a blockchain subsidiary of Kakao.Legal breach claimsThe complaint, formally submitted to the joint crypto-crime investigation division of the Seoul Southern District Prosecutors’ Office, asserts that Kakao executives have breached the Act on the Aggravated Punishment of Specific Economic Crimes and the Capital Markets Act.Clandestine pre-salesWithin the detailed complaint, Economic Democracy 21 alleges that following the issuance of KLAY, Kakao’s executives conducted private pre-sales of KLAY tokens before their official listing. These pre-sales activities reportedly raised between KRW 150 billion and 300 billion ($113 million and $226 million). The accusation is that these funds were not channeled into business endeavors, but rather diverted for personal use.The complaint also contends that Kim and other executives withdrew KLAY tokens from the company under the guise of investments, compensation, and service fees related to “overseas investment business” since 2022. The civic group further asserted that these corporate leaders employed a program to manipulate transaction records, presumably with the intent of preventing third parties from discovering the nature of these transactions.

During a National Policy Committee audit, South Korean lawmakers pressed financial regulators on their oversight of the domestic crypto market, focusing on Binance’s acquisition of local exchange Gopax, risks from order-book sharing with foreign platforms, and weaknesses in anti–money laundering (AML) controls.Photo by Kanchanara on UnsplashQuestions over Gopax compensationAccording to Kuki News, Democratic Party lawmaker Min Byeong-dug has urged regulators to reach out to Binance for details on its plan to compensate Gopax creditors following its acquisition of the local exchange. One of the nation’s five fiat-to-crypto exchanges, Gopax suspended withdrawals from its GoFi service, a yield-bearing product, in November 2022 after the collapse of the Bahamas-based FTX crypto exchange and the bankruptcy of Genesis, a U.S.-based crypto financial services firm. Citing investor losses estimated at 10 billion to 50 billion won (about $7 million–$35 million), Min said Binance had agreed to cover the shortfall as part of its cashless acquisition of Gopax, but full repayment to Korean users remains unresolved. He noted that the deal had faced delays due to concerns raised by the Financial Services Commission’s (FSC) Financial Intelligence Unit (FIU) over Binance’s eligibility as a major shareholder, and urged the FSC and FIU to ensure a clear and timely resolution for affected investors. Concerns over order-book sharingPeople Power Party (PPP) lawmaker Lee Heon-seung raised additional concerns about order-book sharing tied to the Binance–Gopax deal, warning it could create regulatory blind spots. According to Dailian, he asked the FIU about risks such as possible gaps in AML oversight at foreign exchanges and the potential exposure of Korean user data. FIU head Park Gwang said inadequate AML systems at overseas platforms can hinder fund tracing. He noted that separate approval is required before a domestic exchange can share its order book with a foreign platform, adding that no such request was under discussion. Park said the FIU would closely examine the matter and ensure protection of personal data. Lee also questioned how effectively regulators can supervise the crypto market given its scale, pointing to the Bithumb exchange as an example, where he had raised similar concerns about order-book sharing. Bithumb serves about 3.8 million users and records roughly 605 trillion won (approximately $426 billion) in annual trading volume. He said order-book sharing with major global exchanges such as Binance could complicate AML compliance, data protection, and regulatory oversight, and called for stronger enforcement. In response, Park said that the agency would ensure proper supervision to address these risks. Allegations of AML loopholes and illicit useAnother PPP lawmaker, Kim Jae-sub, flagged a potential AML loophole involving Binance, saying the exchange had allegedly been used by Cambodia’s Prince Group, which is linked to fraudulent schemes to conceal illicit funds. Last week, the U.S. Department of Justice filed a civil forfeiture complaint to seize roughly 127,271 Bitcoin linked to Prince Group’s operations, marking the largest seizure in its history. Kim also cited past allegations connecting Binance to illicit transactions involving Hamas and North Korea, and said the exchange’s founder faces related charges. He urged the FSC to conduct a thorough examination to determine the extent of any involvement if the claims prove accurate. As the parliamentary audit continues, lawmakers from both parties are pressing regulators to clarify standards, tighten oversight, and prioritize investor protection while maintaining fair and predictable rules for market participants. 

South Korea's central bank governor has called for tokenizing government bonds and other assets, telling global peers that moving sovereign debt onto a shared digital ledger could reinforce monetary policy and financial stability. Speaking at the European Central Bank's annual forum in Sintra, Portugal, Bank of Korea Governor Hyun Song Shin said central banks should look beyond tokenizing money and deposits to assets such as government bonds and equities, according to Korea Economic Daily TV. He made the case in a paper titled "A unified ledger in practice: lessons from Project Hangang," based on the BOK's pilot of the same name. Shin described a unified ledger as a blueprint for a future monetary system: central bank money, bank deposits and assets sharing one programmable platform. In an asset trade, payment and settlement sit on that single platform and clear at once, so ownership changes hands the instant payment is made.Photo by Markus Winkler on UnsplashTokenized bonds as a policy toolIn the pilot's first phase, launched in October 2023, the BOK and commercial banks issued a wholesale central bank digital currency and tokenized bank deposits to test the concept, which is drawn from the Bank for International Settlements. Shin said the exercise showed deposit tokens could serve as a new means of payment, and that programmable rules could stop funds being misused the moment a transaction is made. Putting sovereign bonds on such a ledger, he added, would reinforce the bank's key mandates of monetary policy and financial stability. A second phase, due in the second half of this year, will apply those programmable features to government spending, beginning with electric-vehicle charging subsidies and public-sector expenses. Shin also floated linking the system to Project Agora, a cross-border settlement effort backed by seven central banks, to clear foreign-exchange and securities trades in a single step and widen international use of the Korean won. Regulators eye exchange banking rulesBack home, the Financial Services Commission (FSC) moved on two fronts of its own. The regulator has begun canvassing won-based exchanges and their partner banks about the practice of tying each exchange to a single bank for real-name accounts, Financial News reported. At issue is whether the current setup could handle an influx of institutions as authorities prepare to open the market to companies. Currently, crypto exchange Upbit works only with Kbank, and Bithumb only with KB Kookmin. Regulators are now weighing whether to loosen this one-to-one arrangement, letting one exchange use several banks or one bank serve several platforms, and separately whether to route crypto services through securities firms' trading apps. The FSC also referred two manipulation cases to prosecutors, Maeil Business Newspaper reported. In the first, a whale spent tens of billions of won (tens of millions of dollars) to corner about half the global supply of a token listed at home and abroad, pumping its price on an overseas venue over roughly two months before using arbitrage to lure Korean buyers. The trader lost money offshore but booked bigger gains at home, concentrating the damage on local investors. In the second, a trader loaded up on a domestically issued "kimchi coin," then used an API to fire repeated buy and sell orders within a single second and posted inflated bids to push the price up before selling into the demand. The FSC urged investors not to chase coins that spike without clear cause, warned of pump-and-dump schemes, and said it would step up disclosure of activity by large holders and sharpen alerts for trading concentrated in a few accounts.