India’s Jio Financial Services to Delve Into Blockchain

A recent survey in South Korea found that 20.3% of crypto investors have fallen victim to financial losses. Conducted by the Korea Financial Consumers Protection Foundation in late December, the survey polled 2,500 adults aged 19-69, with respondents able to select multiple loss categories. Investors in their 60s were most vulnerable, reporting a 25.3% loss rate. Exchange-related problems constituted the majority of incidents (72.8%), followed by online chat room scams (44.7%) and investment fraud (35.5%).Photo by Growtika on UnsplashExchange failures lead lossesAmong exchange-related losses, 40.6% of users couldn't sell assets due to system failures, while 11.5% lost digital assets through exchange hacking. Overall, exchange technical issues accounted for 52.1% of reported losses, with another 20.7% losing assets when exchanges closed completely. Chat group scam victims experienced various forms of fraud: 23.2% paid for worthless or false information, while 21.5% suffered financial losses through market manipulation or proxy trading schemes. Investment scams included fake crypto projects or fraudulent firms (18.0%), deceptive exchanges (10.3%), and other scams (7.2%). Most victims (75.1%) reported losses under 10 million won (approximately $6,945), with 34.6% losing less than 1 million won. Due to these relatively small amounts, 67.7% took no action following their losses. Of the 32.3% who sought help through various channels, 73.9% were unable to fully recover their funds. Problem worsening across Asia and beyondThis problem extends beyond South Korea. In neighboring Japan, police reported 19,038 crypto fraud cases in 2023, with damages totaling 45.26 billion yen (about $300 million), according to Chainalysis, citing Japanese National Police Agency data. These figures surpass 2022 numbers, indicating continued growth in fraudulent activities. A recent case highlighted by the Fukushima Minyu Shimbun involved a Soma City woman in her 50s who lost approximately 116.6 million yen ($780,000) to scammers impersonating police officers. The fraud began with a fake customer service call, followed by deceptive claims about fraudulent accounts and threats of arrest, which led her to create cryptocurrency accounts and transfer funds before eventually reporting the scam. Elderly at highest risk as fraud surgesThe FBI's Internet Crime Complaint Center's 2024 report further confirms this trend, documenting 149,686 crypto fraud complaints in the U.S. with $9.3 billion in reported losses—66% higher than in 2023. Notably, people over 60 were the most affected demographic, consistent with the Korean study's findings.

Hong Kong’s OSL crypto exchange receives $91M boostBC Technology Group, the owner of the licensed OSL exchange, has secured a HK$710 million ($90.9 million) investment from BGX.Photo by Precondo CA on UnsplashBringing clarity to BitgetX market withdrawalBGX is reportedly associated with Seychelles-incorporated crypto exchange Bitget. The investment, which was announced via statements published by both BC Technology Group and BGX on their respective websites on Tuesday, brings further clarity to the rationale behind Bitget’s recent decision to withdraw its BitgetX platform from the Hong Kong market.BitgetX was believed to be working towards crypto licensing in Hong Kong. Its decision on Monday to stop pursuing a virtual asset trading platform (VATP) license and withdraw from the market entirely had been perceived as a weakness of the regulatory regimen in Hong Kong. However, it now appears that it was just clearing the way for involvement in crypto trading brought about through its investment in OSL, an entity that has already acquired a trading license within the Chinese autonomous territory.BGX has entered into an agreement to acquire a 29.97% stake in BC Technology, OSL's parent company, pending shareholder approval. According to an announcement, BGX CEO Patrick Pan Zhiyong is set to become one of two new executive directors as part of this investment. Pan, concurrently serving as the CEO of BitgetX, will also oversee the transition as Bitget steps back from the market, scheduling its platform closure for Dec. 13.Sale rumors deniedReports emerged in October that BC Technology Group was considering the sale of OSL based on a $128 million valuation. Contrary to those reports, BC Technology vehemently denied any intentions to sell OSL, emphasizing its commitment to maintaining the exchange’s operations. The company dismissed such speculation as “factually inaccurate and highly misleading,” underscoring its dedication to navigating the evolving crypto landscape.Bitget, responding to inquiries from the South China Morning Post (SCMP), asserted its independence from BGX, stating that it is “an independent entity” with no legal or commercial connections to the crypto firm.BGX is incorporated in the Cayman Islands and wholly owned by Liu Shuai, the founder of Shenzhen Qianhai Junchuang Fund Management and Singaporean crypto fund Foresight Ventures. Liu’s investment portfolio includes Bitget, as well as U.S. crypto media group The Block, which was acquired by Foresight Ventures, according to reports earlier this week.The incorporation of BGX into BC Technology’s ecosystem introduces a dynamic player with diverse investments across the crypto space. Against the backdrop of Hong Kong’s changing regulatory landscape, with the introduction of a mandatory licensing scheme last year, BC Technology’s OSL was the first exchange to obtain a voluntary license from the Securities and Futures Commission (SFC) in 2020. The asset management division of the company received a trading license in May of this year. In August, OSL, along with HashKey, received approval from the SFC to upgrade their licenses, allowing them to serve retail investors.The evolving regulatory environment reflects Hong Kong’s ambition to position itself as a crypto hub, attracting both institutional and retail participants. While that endeavor is not without its challenges, the city hasn’t been adversely affected by BitgetX's withdrawal from the market, given this related investment in OSL.

Japan’s Financial Services Agency (FSA) is advancing proposals to authorize exchange-traded funds (ETFs) backed by specific cryptocurrencies, a move that fleshes out previously reported plans to apply a flat 20% separate tax to crypto gains. According to agency materials released on Dec. 26 and reported by CoinPost, the regulator has now clarified that crypto-linked ETFs and derivatives will be integrated into this new tax framework.Photo by Jakub Żerdzicki on UnsplashThe materials, part of the tax reform framework for the fiscal year 2026, indicate that the regulator intends to align the tax treatment of crypto-linked ETFs with that of stocks and foreign exchange trading. Under the current system, cryptocurrency gains in Japan are classified as miscellaneous income, subjecting investors to progressive tax rates that can reach approximately 55% when local levies are included. The proposed reforms aim to integrate crypto assets into the Financial Instruments and Exchange Act (FIEA), a legislative package slated for debate during the 2026 Diet session. Derivatives also subject to separate taxBeyond ETFs, the regulator plans to adjust the taxation of derivative products based on certain crypto assets. While these derivatives would remain classified as miscellaneous income—similar to conventional futures—the method of taxation would shift from comprehensive taxation to a separate self-assessment model. Despite the outlined tax reductions, market observers anticipate that full implementation may be delayed until 2028 due to the time required to amend the relevant laws and government ordinances. FSA restructures to better oversee cryptoIn parallel with regulatory updates, the FSA is restructuring its internal operations to better address digital finance. Nikkei reported that the agency has decided to elevate its Crypto-Assets and Blockchain Innovation Office to the status of a division beginning in the administrative fiscal year starting July 2026. This restructuring follows an August proposal in which the FSA cited the need to bolster its capacity to handle financial services transformed by financial technology, crypto trading, and generative artificial intelligence (AI). The agency noted that it faces accumulating challenges, including fraud prevention and the government's broader goal of positioning Japan as a leading asset management nation. Additionally, the establishment of a new Asset Management and Insurance Supervision Bureau is expected as part of the reorganization. The regulatory shifts coincide with broader efforts to integrate blockchain technology into Japan's financial infrastructure. A separate Nikkei report last week stated that policymakers have agreed to prepare for the issuance of local government bonds as blockchain-based security tokens. The government plans to submit the necessary legislation during the next ordinary Diet session, aiming to streamline settlement processes and enable real-time monitoring of investor data. Corporate crypto strategies persist despite concernsIn the private sector, Tokyo Stock Exchange-listed Metaplanet is proceeding with a corporate strategy focused on Bitcoin accumulation. Dylan LeClair, the company's Director of Bitcoin Strategy, said on X that shareholders at an extraordinary meeting approved proposals to raise capital for additional Bitcoin purchases, including the issuance of Class B preferred shares to overseas institutional investors. Earlier this year, Metaplanet shareholders authorized a long-term plan to acquire more than 210,000 Bitcoin by 2027, representing roughly 1% of the total supply. However, analysts warn that corporate models based primarily on asset accumulation face structural risks. According to Cointelegraph, industry figures such as MoreMarkets CEO Altan Tutar and Solv Protocol co-founder Ryan Chow have cautioned that companies relying solely on digital asset holdings may struggle to maintain valuations without developing operational businesses that generate consistent returns.