South Korean Firms Combine Strengths to Draw Hobbyists into the Metaverse

Taiwan to Restrict Offshore Non-Complaint ExchangesTaiwan’s Financial Supervisory Commission (FSC) has been working towards taking proactive steps to regulate the cryptocurrency industry within its borders recently. One key guiding principle it has developed is to impose strict regulation on offshore crypto exchanges operating in Taiwan.Photo by Vas on UnsplashTen guiding principlesTaiwan’s Central News Agency reported on Thursday that in an effort to ensure compliance and protect consumers, the FSC has developed ten guiding principles for virtual asset service providers (VASPs). These principles are set to be officially released by the end of this month, according to a government official.The guiding principles will encompass several important aspects of the crypto industry. They will emphasize the need for enhanced information disclosure, requiring businesses to establish clear review standards for the listing and delisting of virtual assets. Additionally, there will be a focus on ensuring the separation and proper custody of assets belonging to both companies and customers.Focusing on offshore complianceThe FSC intends to make it clear that offshore crypto exchanges must adhere to proper compliance registration if they want to conduct business onshore. The move is in line with what appears to be a commitment by the Taiwanese authorities to promote responsible and secure cryptocurrency operations.One particularly significant restriction is the prohibition of illegal solicitation of business by foreign crypto firms. The FSC is determined to enforce this rule strictly. Foreign VASPs that fail to register according to company law and declare their compliance with anti-money laundering regulations to the FSC will be barred from soliciting business in Taiwan or catering to domestic residents.It’s worth noting that Taiwan has been proactive in implementing anti-money laundering laws for VASPs since July 2021. Although this particular measure has been in place, the cryptocurrency industry in Taiwan has largely operated in a regulatory vacuum. However, recent developments suggest a shift towards greater oversight and accountability.One notable example is Binance, the world’s largest cryptocurrency exchange, which has initiated the process of registering for anti-money laundering compliance in Taiwan. Despite not being fully regulated in the country, Binance has established a local entity, “Binance International Limited Taiwan Branch (Seychelles),” and received government approval for company registration.Building a regulatory frameworkIn addition to these regulatory efforts, the Ministry of Economic Affairs has proposed the creation of a new business category within relevant regulations. This move aims to facilitate the formation of cryptocurrency-related industry associations, encouraging the development of self-regulatory guidelines.The forthcoming guiding principles for VASPs are expected to provide much-needed clarity and structure to the rapidly evolving world of cryptocurrencies within Taiwan’s borders.Many leading jurisdictions have been behind the curve in developing a clear, workable regulatory framework for crypto. That has led to many exchanges establishing themselves in offshore locations where light touch regulation is applied. It’s highly likely that the Taiwanese have examined the fallout from this development, best exemplified by the spectacular collapse of Bahamas-based FTX last November.

With the general election just over a month away, South Korea’s ruling People Power Party (PPP) has retracted its campaign pledges to allow trading of spot bitcoin ETFs, local media outlet Chosun Biz reported. The PPP has previously drawn substantial attention from the crypto industry, as the party showed its intention to ease a range of crypto regulations in hopes of gaining more votes in the general election.  A political insider familiar with the issue said yesterday that the PPP has recently removed crypto-related agendas from its priority list. The crypto pledges, initially planned to be announced last week, have been permanently suspended, the person said. “The leaders of the PPP are currently focusing on nomination for local constituencies and its satellite People’s Future Party, rather than coming up with additional crypto agendas. As the PPP appears to be embarking on the election campaign starting in March, the likelihood of the ruling party releasing crypto pledges is very slim,” another political circle insider mentioned.Photo by Traxer on UnsplashTalks between PPP and FSC go in vainThe PPP’s decision to retract crypto-related pledges comes after its attempt to approve the introduction and trading of spot bitcoin ETFs met with opposition from the Financial Services Commission (FSC).  Unlike the PPP or its opposition Democratic Party of Korea (DPK) that scrambled to ease crypto regulations ahead of the general election, the FSC’s stance on viewing crypto assets as risky hasn’t changed much. Despite last month’s approval of spot bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC), the FSC continues to ban the issuance of crypto-based financial products or investments in them, stating that crypto assets are not defined as underlying assets under the current Capital Markets Act. This has gotten in the way of the PPP’s plan to delay taxation on crypto gains for as long as two years and allow institutional investments in virtual assets.  The PPP also had to verify all the party members to see if any of them had a record of wrongdoings related to crypto transactions, which further delayed the pledges. This shows politicians’ heightened awareness of crypto-related issues. Last year, the DPK lawmaker Kim Nam-guk made headlines for a scandal, as he was accused of failing to report a considerable amount of crypto assets transactions to the financial authority. PPP lags a step behind its opposition DPKThe DPK has also strived to come up with crypto pledges alongside the PPP. The crypto-related pledges released by the DPK so far largely overlap with those of the PPP, meaning there’s no particular merit to the PPP’s campaign vows leading up to the general election. Many see this as another reason for the PPP’s decision to withdraw crypto pledges. The DPK unveiled its plan on Feb. 21 to legalize spot bitcoin ETFs, and pledged to deduct taxes on crypto gains worth less than KRW 50 million ($37,400). Under the current law, only crypto gains that are worth less than KRW 2.5 million qualify for the tax deduction. Most of these pledges largely align with those of the PPP.  With the PPP’s withdrawal of its plan to ease crypto regulations, the excitement among crypto industry insiders for the upcoming general election appears to have subsided. “Despite the DPK’s promise to allow spot bitcoin ETFs, it is unlikely that we’ll see crypto assets being incorporated into the conventional financial system without the ruling party’s approval, let alone fostering the blockchain industry,” said one crypto insider. 

Coincheck, a subsidiary of Monex Group, a Tokyo-based global financial services firm, has gained U.S. Securities and Exchange Commission (SEC) approval to become the first Japanese crypto exchange to list on the Nasdaq, an American stock exchange.Photo by Denys Nevozhai on UnsplashSPAC mergerThe approval by the U.S. regulator was filed on Nov. 13. The listing has been enabled due to the company’s decision to enter into a merger with a special purpose acquisition company (SPAC), namely Thunder Bridge Capital Partners (TBCP).  A SPAC raises money through an initial public offering (IPO) to either acquire or merge with an existing company. Opting for a SPAC means that Coincheck can forego a lot of the time and expense that would be necessary if it attempted to effect an IPO on its own. Parent company Monex Group published a statement outlining that Coincheck CEO Yuko Seimei had “been diligently preparing for listing its common stock on the Nasdaq Global Market (“Nasdaq”) through a previously announced business combination with Thunder Bridge Capital Partners.” Possible Nasdaq listing on Dec. 10 In a press release issued by TBCP, the company claimed that the proposed merger is anticipated to close on or about Dec. 10, 2024. That eventuality is subject to stockholder approval, Nasdaq approval and specific closing conditions. Consequently, Coincheck’s Nasdaq listing could potentially happen as early as Dec. 10. TBCP is holding a shareholder vote on the merger on Dec. 5. If all conditions are satisfied to pave the way for listing, the company’s stock will be listed using CNCK as the Nasdaq stock ticker. Once the merger and Nasdaq listing have been accomplished, Coincheck will still remain a subsidiary of Monex Group. The merged business will gain access to $237 million, held in trust by TBCP, with Monex retaining an 82% stake in the company. Furthermore, Thunder Bridge CEO Gary Simanson will lead the new company. The $1.25 billion merger had been in the works since 2022, having faced multiple delays on the path towards merger completion and Nasdaq listing. Coincheck finally filed with the SEC to merge back in May. Parent company Monex has other interests in the digital asset sector beyond its involvement with Coincheck. Last December the company acquired a majority stake in 3iQ Digital Holdings, a Canadian crypto asset management company.Monex has just launched a new brand, Monex Web3, comprising of Monex’s Web3 business portfolio. It also offers a Web3 consulting business, using its local know-how to guide Web3 startups in entering the Japanese market. Coincheck has also engaged in partnerships to assist other firms in gaining access to the Japanese market. Earlier this year the leading Japanese crypto exchange partnered with USD Coin (USDC) stablecoin issuer Circle, in an effort to expand USDC access within the local market. In January 2018 the exchange suffered what was at the time the world’s largest ever digital asset theft, losing $534 million in virtual assets in a hack of the platform.