Dubai Regulator Suspends BitOasis’ Crypto License

Hong Kong SFC CEO Prioritizes Investor Protection in Crypto RegulationsAccording to a report by Chinanews, Julia Leung, Chief Executive Officer of the Hong Kong Securities and Futures Commission (SFC), participated in a seminar organized by the Hong Kong Academy of Finance (AoF). During the event, she emphasized the importance of investor protection in the formulation of guidelines for operators of virtual asset trading platforms.Photo by Kanchanara on UnsplashDevelopment of crypto in Hong KongAt the seminar yesterday, Leung discussed the development of virtual assets in the special administrative region of China. She recalled the pushback the SFC received in 2018 when it first proposed regulations for virtual asset trading platforms. Critics argued that the licensing system, demanding applicants to comply with stringent internal control and investor protection standards, might compel fintech companies to relocate their operations to other jurisdictions, such as Singapore.Market recognition of crypto regulationsDespite initial criticism, the market came to appreciate the importance of these regulatory standards, especially after witnessing the bankruptcy of several overseas cryptocurrency organizations.The guidelines for operators of virtual asset trading platforms in Hong Kong are set to take effect in June. Leung mentioned that these guidelines match market expectations and place emphasis on protecting investors. They encompass regulations for virtual asset custody, the segregation of client assets, and the avoidance of conflicts of interest. She also expressed satisfaction with the SFC’s role as a leading regulator in the virtual asset space.Crypto exchange ratingMeanwhile, Chinese blockchain news media Jinse Finance reported today the official establishment of the Hong Kong Virtual Asset Consortium (HKVAC), a private entity that rates virtual assets.It has also launched a virtual asset index and will introduce a virtual asset exchange rating system. The HKVAC Large Market Cap Cryptocurrency Index comprises the 30 leading cryptocurrencies by market capitalization. The index will be reviewed quarterly on the last day of each quarter (March, June, September, and December). The Virtual Asset Exchange Rating System will assess the credibility of trading platforms and enhance transparency and accountability in the virtual asset trading market.HKVAC was established by a team of industry experts and professional rating agencies. It brings together key stakeholders in the virtual asset industry, such as big data firms, exchanges, and institutional investors, along with the city’s licensed rating agencies. HKVAC aims to cultivate a secure environment for crypto investments and enhance the public’s understanding of virtual assets.

The South Korean government and the Democratic Party of Korea (DPK) plan to finalize legislation governing Korean won–pegged stablecoins by March. According to local media outlet DataNews, the two sides will hold a closed-door meeting on Jan. 20 to discuss agenda items related to the proposed Digital Asset Basic Act, widely referred to as the second phase of South Korea’s cryptocurrency legislation. A key sticking point is who should be allowed to issue stablecoins. Financial regulators favor, at least initially, limiting issuance to consortia in which banks hold a majority stake (50% plus one share), citing concerns about financial-market stability. The Democratic Party, however, opposes granting banks majority control. Separately, the draft would require issuers to meet capital-adequacy standards and maintain reserves equal to at least 100% of outstanding stablecoins.Photo by Greg Willson on UnsplashCBDC pilots to streamline public fundsBeyond private stablecoins, the government is also exploring potential public-sector uses for central bank digital currencies (CBDCs), including pilot programs that would deploy CBDC-based deposit tokens. As part of a broader digital transformation push, officials aim to use CBDC rails for a significant portion of public funds administration. By June, CBDC-based deposit tokens are set to be used in an electric vehicle charging infrastructure project: buyers of approved chargers would receive tokens to help ensure subsidies go only to eligible purchases and to shorten settlement times. Regulators are also considering steps to expand institutional access to cryptocurrencies. Under one proposal, publicly listed companies would be allowed to invest up to 5% of their equity in digital assets annually. Eligible investments would be limited to the top 20 tokens traded on the country’s five largest exchanges, with the list reviewed every six months. It remains undecided whether stablecoins, including USDT, would be included. Another planned change would permit the trading of exchange-traded funds (ETFs) that track spot crypto prices. While current law does not recognize digital assets as eligible underlying assets for such products, that is expected to change under the forthcoming legislative revision. Exchanges say caps threaten growthAt the same time, proposed governance changes that could cap controlling stakes at around 15% to 20% have drawn pushback from industry groups. The draft Digital Asset Basic Act would reshape control structures at South Korea’s largest cryptocurrency exchanges—Upbit, Bithumb, Coinone, and Korbit—which together serve roughly 11 million users. Regulators at the Financial Services Commission (FSC) say the measures are intended to curb concentrated influence by founders and major shareholders, and are considering a framework modeled on rules for alternative trading systems (ATS) under the Capital Markets Act. Yonhap News reported that the Digital Asset eXchange Alliance (DAXA)—which includes the four exchanges above as well as Gopax—has warned the proposed governance restrictions could slow the growth of South Korea’s crypto industry. The group argued the changes would dilute the accountability of a clear controlling shareholder, particularly regarding custody and management of customers’ digital assets. DAXA urged regulators to adopt a framework aligned with global standards, warning that stricter caps could increase uncertainty for startups and discourage entrepreneurship and investment. Investors pour $2.4B into overseas crypto ETFsThe lack of domestically available spot crypto ETFs has also driven Korean investors to seek exposure overseas. According to the Korea Securities Depository, as cited by Edaily, Korean investors bought a net $2.37 billion of foreign crypto ETFs between Jan. 13, 2025, and Jan. 12, 2026, placing these products among the top 50 overseas securities by net purchases over the period. Those purchases included a mix of spot-linked products, crypto futures–based instruments, and funds tracking companies that hold digital assets on their balance sheets. Several of the most heavily purchased products involved leverage or options-based strategies, including the T-REX 2x Long BMNR Daily Target ETF ($573.1 million) and the YieldMax MSTR Option Income ETF ($493.9 million). Leverage-heavy demand has been a recurring feature of Korean retail trading. In an October report, Bloomberg noted that prospective homebuyers have increasingly turned to crypto in hopes of building capital, fueling appetite for higher-risk altcoins. Such tokens account for more than 80% of trading volume on local exchanges. 

Singapore’s Terraform Labs, the company founded by incarcerated crypto entrepreneur Do Kwon, has filed for Chapter 11 bankruptcy protection as a mechanism to shield itself from potential severe penalties in the U.S. Securities and Exchange Commission's (SEC) securities fraud lawsuit.Photo by Melinda Gimpel on UnsplashPursuing an appealThe bankruptcy filing, submitted on Tuesday in the U.S. Bankruptcy Court for the District of Delaware, aims to allow Terraform Labs to pursue an appeal against the SEC's allegations. In the filing, Terraform Labs CEO Chris Amani emphasized the critical nature of the bankruptcy protection for the company's ongoing operations, preservation of value for creditors, including the Terra community, and the pursuit of an appeal against the SEC enforcement action. Amani expressed concerns that, without Chapter 11 protection, the company could face liquidation after the trial, forfeiting its right to appeal and leading to disastrous consequences for its business. Having acted as Terraform’s chief operating officer earlier in 2023, last July Amani was appointed as the firm’s CEO. Protection afforded by Chapter 11The estimated assets and liabilities of Terraform Labs fall between $100 million and $500 million, as disclosed in the firm’s bankruptcy filing earlier this month. Amani highlighted the potential financial strain resulting from a substantial money judgment, indicating that the company might not be able to satisfy such a judgment or post the necessary supersedeas bond for an appeal, a bond that must be provided by a petitioner who attempts to have a judgment set aside, without the protection afforded by Chapter 11. The SEC charged Terraform Labs and former CEO Do Kwon with securities fraud in February 2023, accusing them of orchestrating a "multi-billion dollar crypto asset securities fraud." The Commission claimed the company raised billions from investors through unregistered transactions, offering an interconnected suite of crypto asset securities. Terraform Labs disputes the SEC's summary judgment decision, asserting that the cryptocurrency tokens in question are not securities under the Acts and that the SEC's jurisdiction is not applicable. The potential consequences of liquidation extend beyond the company itself, impacting hundreds of thousands of Luna cryptocurrency holders, the same individuals the SEC purportedly seeks to protect. Luna operates on the Terra blockchain maintained by Terraform Labs. Terraform Labs, known for the algorithmic stablecoin TerraUSD and its sister cryptocurrency Luna, filed for bankruptcy protection in the wake of the infamous collapse of both in May 2022. The SEC's case stems from that $40 billion collapse of TerraUSD and a previous version of Luna, accusing Terraform Labs and Kwon of misleading investors about the stability of TerraUSD. Kwon was arrested in March of last year in Montenegro for using false documents. He is currently detained in Montenegro, following his attempt to travel to Dubai with a fake Costa Rican passport. The Terraform founder is currently awaiting extradition to either the United States or South Korea. Both Do Kwon and Terraform Labs deny committing fraud, with the SEC trial scheduled to commence in New York in late March.