Korea Makes Strides in Establishing the Legal Framework for Security Tokens

Mirae Asset Securities, South Korea’s largest asset management firm, has begun suspending trading for bitcoin ETFs, according to industry sources on Friday. This comes after an announcement made by the Financial Services Commission (FSC) stating that brokering spot bitcoin ETFs may be considered a violation of the government’s stance on virtual assets and the Financial Investment Services and Capital Markets Act.Photo by Dmytro Demidko on UnsplashTaking preemptive measuresThe asset manager has blocked new purchases of spot bitcoin ETFs listed in Canada and Germany starting yesterday and is considering suspending trading of bitcoin futures ETFs that have been listed in overseas markets since 2021. This includes the Proshares Bitcoin Strategy ETF, Valkyrie Bitcoin Strategy ETF, Invesco Galaxy Bitcoin Strategy ETF and VanEck Bitcoin Strategy ETF. As Korean financial authorities are putting the brakes on domestic investments in the recently approved spot bitcoin ETF by the U.S. Securities Exchange Commission (SEC), it is believed that Mirae Asset Securities is putting a preemptive halt to trading in other bitcoin ETFs. Spot vs futuresSpot bitcoin ETFs differ from futures ETFs in that they track the price of Bitcoin by actually holding the cryptocurrency, while the latter tracks its price through futures contracts. South Korean securities firms have been brokering futures ETFs listed in overseas market for a while now.

American publicly-listed crypto exchange platform Coinbase is understood to be in talks with Indian regulators with a view towards enabling the re-entry of the exchange into the Indian market. News of the development emerged via a TechCrunch report published on Feb. 13. The publication cited two anonymous sources familiar with the matter. According to those sources, the American crypto exchange platform is in talks with officials from India’s Financial Intelligence Unit (FIU), a government agency that collects financial data regarding offenses under India’s Prevention of Money Laundering Act. Photo by Naveed Ahmed on UnsplashRegulatory pushbackThe FIU has been a key player in pushing back against exchanges that it believed were non-compliant in participating within the Indian market over the course of the past two years. In December 2023, the government agency moved to block overseas exchange businesses that it deemed to be operating illegally within the Indian market from engaging with Indian investors. That action was taken following calls from native Indian exchanges for a level playing field. At the time, they made the case to the Indian authorities that offshore exchanges were not operating in compliance with local regulations. Show-cause notices were issued against nine platforms at that time, although Coinbase wasn’t one of them.  The company had taken the measure of disabling new user sign-ups in India in September 2023. Prior to that, Coinbase CEO Brian Armstrong had complained about “informal pressure” being exerted by the Royal Bank of India (RBI). He said that the central bank was exerting “soft pressure” behind the scenes. On this attempt to re-enter the market, a spokesman for the company made the following statement to Cointelegraph: “Coinbase is excited by the opportunities in the Indian market and intends to comply with applicable regulatory requirements, but we have nothing to announce regarding a FIU registration at this time.” Kyle Chasse, founder of Web3-focused venture capital firm MV Global, outlined on X that it was “massive news,” adding that if the company re-enters the market, “huge liquidity could flow in from this.” Local partnersA source familiar with the matter told Decrypt that Coinbase wants “to do the same thing this time, but with local partners on board and a more clear strategy, which they didn’t have last time.”  The publication suggested that Coinbase executives will visit India in March to attend meetings with FIU officials. The timing of any official service re-launch in India will depend upon the regulatory steps that need to be followed by the company and the time taken to accomplish these requirements. In a related development, last week, Coinbase’s Chief Legal Officer (CLO), Paul Grewal, joined the board of directors of the U.S.-India Business Council, part of the U.S. Chamber of Commerce. While commenting on the appointment, Grewal spoke about a number of positive developments in India that are likely factors in the company’s renewed efforts to re-enter the Indian market. He stated: “India has one of the largest and fastest-growing web3 ecosystems in the world, with a booming developer community, pioneering startups, and bold institutional adoption. Since 2018, its share of global web3 developers has quadrupled to 12%, the highest growth among emerging markets.”

Global Blockchain Incheon Conference to Promote Web3 Exchange and AdvancementThe city of Incheon is set to host the Global Blockchain Incheon Conference (GBIC 2023) this year from October 30 to 31 under the theme “The Age of Discovery: Voyage to the New World of Blockchain.” The conference aims to provide a space for the exchange of Web3 technologies that are becoming a part of daily life and facilitating communication between businesses, all in the pursuit of establishing Incheon as a global blockchain hub.Photo by Jiho Choi on UnsplashThe city intends to reveal its master plan to achieve this pursuit, consisting of five major strategy points: citizen participation, sustainable growth, advanced innovation, development of a business-friendly environment, and global technological leadership.Exploring the rich tapestry of GBIC 2023The event will include an opening ceremony, keynote speeches, seminars, and additional activities such as hackathon competitions, photo exhibitions of cutting-edge technologies, and interactive zones. Keynote speakers include Marouen Zelleg, Head of Business Development at Polygon Labs’ Asia-Pacific region; Patrick Yoon, General Manager Korea at Crypto.com; Shun Ishikawa, COO at Astar Foundation; and Christopher Lai, Director of the Hong Kong Trade Development Council’s Korea branch.There will be sessions centered around various themes such as stepping into the future of blockchain, improving safety for the citizens of Incheon, delivering tangible innovation, integrating blockchain into daily life, venturing beyond regulations into new possibilities, disseminating technology, and innovating industrial ecosystems.In particular, the conference will also hold a demo day, where companies can showcase demos for their products and services to attract potential investors.Diverse experiences for visitorsAttendees will have the unique opportunity to see how blockchain technology is integrated into daily life by receiving non-fungible tokens (NFTs) minted with Incheon’s mascots — Deungdaeri, Bumi, Kkomi, and Aini — and participating in blockchain-powered games. Other NFTs, such as those issued by Shinhan Bank with records of information like confirmation of entry and coupon usage, will also be available.GBIC is also holding other online and offline activities for visitors to participate in, such as quizzes, social media events, and souvenir distributions.“We will demonstrate how digital technology is integrated into daily life through blockchain in the Web3 era that we are living in,” said Son Hye-yeong, Head of the city’s Data Industry Division. “We encourage everyone’s interest and participation in the blockchain presentations and forums led by global leaders.”GBIC will take place at Songdo Convensia in Incheon, an international conference complex located in Songdo International Business District.