Hong Kong’s Bricks-and-Mortar Crypto Shops Attract Chinese Visitors

South Korea is expected to lift its prohibition on initial coin offerings (ICOs), permitting companies to raise funds through digital token sales for the first time since 2017. The move would mark a reversal of the country’s strict regulatory stance, which was originally implemented to curb speculation and protect investors. Regulators had imposed the blanket ban citing a proliferation of projects with unclear fundamentals, fraud, and a lack of safeguards. Authorities at the time noted that unlike initial public offerings (IPOs)—which price shares based on corporate earnings and growth potential—ICOs lacked established standards for valuing the tokens themselves, making them difficult to assess.Photo by micheile henderson on UnsplashICO limited to qualified issuersAccording to a report by Newsis, the government is preparing to allow token issuance but will restrict eligibility to corporations that meet specific thresholds. Issuers would be required to submit documentation, including white papers, to financial authorities in advance and ensure these materials are available to investors. These requirements are expected to be codified in the Digital Asset Basic Act, a second-phase crypto bill currently under preparation. The report noted that the legislation aims to protect users and mitigate market risks by clearly defining accountability for potential failures. An official from the financial regulator stated that detailed criteria, such as minimum capital requirements, would be outlined in enforcement decrees after the bill is passed. Under the proposed rules, companies would be required to file a disclosure document with financial regulators. The requirement would mirror securities filings, but with a focus on public disclosure rather than regulatory approval. The Financial Services Commission would receive the filings, while the Financial Supervisory Service would examine them. Officials are also discussing measures to hold issuing companies fully liable should problems arise after issuance, reflecting the practical challenges involved in verifying the technical aspects of token projects in advance. The regulatory shift would allow South Korean companies to issue tokens at home instead of routing offerings through jurisdictions such as Singapore or Hong Kong. Until now, Korea-based issuers have typically set up overseas entities to conduct ICOs before seeking listings on domestic exchanges. The change is expected to encourage projects that previously went offshore to return to Korea. An industry official said the return of domestic token issuance would help tech companies raise early-stage funding at home and support the launch of new businesses. The move would also intensify competition among exchanges to attract promising projects, the official said, potentially broadening product offerings and lifting trading volumes. Japan plans ETFs, industry seeks faster rolloutAs South Korea moves to allow token issuance, Japan is also easing digital asset rules, though the industry has flagged the slow pace of change. According to local media reports, Japan’s Financial Services Agency plans to revise rules governing investment trusts to allow the inclusion of digital assets. This change would pave the way for exchange-traded funds (ETFs) tracking spot crypto prices as early as 2028. Asset managers are already preparing for the shift. A Nikkei survey showed that as of last November, major firms, including Nomura Asset Management, SBI Global Asset Management, Daiwa, Asset Management One, Amova, and Mitsubishi UFJ, were considering the development of crypto-related investment trusts. However, the timeline has faced pushback. Tomoya Asakura, chief executive of SBI Global Asset Management, said on X that allowing crypto ETFs only from 2028 would be too slow for a country aiming to position itself as a global asset-management hub. He called for a faster rollout, arguing that such products could help channel household savings into investment. 

Mosca, a cash-to-crypto exchange headquartered at the Moscow International Business Center, was subject to a raid carried out by the Russian authorities on April 23. The raid occurred in the immediate aftermath of a call from a member of the commission of the Public Chamber (OP) of the Russian Federation to ban crypto exchanges from facilitating the purchase of cryptocurrencies using cash.Photo by Egor Filin on UnsplashInvestigating fraudWhile attending the Blockchain Life 2025 event in Moscow, Mosca’s Head of Development, Dmitry Titarenko, confirmed to Cointelegraph that the rationale provided for the raid was that it was in connection with fraud perpetrated by one of its platform users. Titarenko added: “Law enforcement agencies have carried out a standard procedure of checking our customer data.” The raid occurred during the company’s attendance at the Blockchain Life conference. Mosca was a key conference participant, having established two stands at the event and winning an award for the best crypto exchange service. Reporting on the raid, local media outlet Baza said that it had been carried out in relation to fraud perpetrated against the former head of the Samara Region Development Corporation, Olga Serova. It explained that Serova had been conned into handing over 350 million rubles ($4.24 million) and $800,000 to the scammers.  Seven arrestsShe withdrew these funds from her bank at the end of last year, despite bank officials having tried to persuade her against the withdrawal for this purpose. The news outlet added that to date, seven people have been arrested in connection with the alleged fraud. The Mosca exchange service may be proving to be attractive to scammers as the platform allows users to buy up to 100,000 USDT per day using cash. Titarenko couldn’t confirm that the raid was carried out in connection with the Serova fraud case. He said that “maybe it was [in relation to] another client.”The exchange executive also confirmed that the company had been in the process of putting in place more resources to carry out anti-money laundering (AML) and know-your-customer (KYC) checks, together with a blacklisting system related to suspicious platform users. Cash-to-crypto ban proposalThe raid occurred within 24 hours of Yevgeny Masharov, a member of the commission of the Public Chamber (OP) of the Russian Federation, putting forward a proposal to ban crypto exchanges from receiving cash, making services like Mosca’s cash-to-crypto exchange illegal. According to state-owned Russian news agency TASS, Masharov said that such a move would “cause a large-scale blow to scammers, because it’s no secret that telephone scammers use crypto exchangers to withdraw cash.”Sergey Mendeleev, a well-known figure within crypto circles in Russia, told attendees at the Blockchain Life conference that such a cash-to-crypto ban would be an unwelcome development for the sector. If such a ban were to materialize, Mendeleev suggested that it would be an indication that the Russian authorities were turning away from the greater development of cryptocurrency in Russia. Last week, it emerged that Russia’s Ministry of Finance, in collaboration with the country’s central bank, plans to launch a crypto exchange for qualified investors. The central bank also confirmed plans to launch a digital ruble payment network in 2026.

SEC Opposes Motion to Dismiss Terraform Labs LawsuitLawyers representing the United States Securities and Exchange Commission (SEC) have responded to a motion to dismiss the lawsuit filed by Dentons, the lawyers representing Singapore-based Terraform Labs and its Founder Do Kwon.Photo by Miguel Á. Padriñán on PexelsCourt filingAccording to its arguments, set out in a court filing lodged to the District Court of the Southern District of New York on Thursday, the SEC’s counsel claims that the additional documents provided by Dentons lack sufficient grounds for dismissing the case.It claims that the internal SEC emails presented by Dentons are irrelevant to the current lawsuit. The SEC asserts that the parameters of an “investment contract” are clearly defined by the Howey test and argue that TerraUSD ($UST) should be classified as a security.The reliance by US regulators on the Howey test, a legal test case that implicated citrus grove contracts that date back to 1946, has proven to be controversial. Naturally, there could have been no consideration of the digital innovation that digital assets present today almost eighty years ago. Notwithstanding that, the SEC maintains that the principle factors of what constitutes an investment contract are covered by the case regardless.During the court hearing held on June 15, Dentons submitted supplementary documents to strengthen their motion to dismiss the lawsuit. The primary focus of the hearing was to determine whether the digital assets developed by Terraform Labs should be categorized as securities based on the criteria of an “investment contract.”Dentons maintains that the algorithmic stablecoin, $UST, should not be considered a security and emphasizes its practical purpose rather than its classification as an investment contract. To support their motion, Dentons included additional documents such as the US House Financial Services Committee hearing on digital asset regulation and stablecoin issuance, the SEC’s request for a restraining order against Binance.US, and the Hinman emails from the SEC vs. Ripple lawsuit.Judge to decideThe defense lawyers highlighted what they perceive as a “regulatory gap” in classifying crypto assets as securities, particularly as the US Congress engages in discussions about regulatory frameworks for digital assets and stablecoin issuance. Furthermore, they argued that the SEC is exceeding the scope of securities laws and relying on internal emails related to “investment contracts” to determine the security status.A decision on the motion to dismiss will be arrived at by July 14. Judge Jed Rakoff, who is presiding over the case, will be responsible for that, once he’s weighed up the merits of the arguments presented by both parties.It is noteworthy that Dentons has previously represented Kwon in challenging the US SEC’s subpoena during the investigation of the Mirror Protocol in 2021, as well as in a class-action lawsuit in the Singapore High Court in 2022. The law firm also provides representation to Terraform Labs in other legal matters.In a separate development, the Basic Court in Podgorica, Montenegro, has granted bail for Kwon and former Terra Chief Technology Officer Han Chang-joon. However, Kwon has recently been taken into custody for extradition in Montenegro while the court deliberates on South Korea’s extradition request for the Terra founder.As the legal proceedings continue, the outcome of the motion to dismiss will have significant implications for the ongoing dispute between Terraform Labs, Do Kwon, and the SEC.