Korea’s Most Populated Province to Conduct Survey on Unfair Crypto Trading

The Securities and Exchange Commission (SEC) of Thailand has initiated legal proceedings against Akarlap Yimwilai, the former director and CEO of Zipmex Thailand. Failure to disclose vital informationThe Commission set out its allegations against Yimwilai in a statement published to its website on Thursday. The allegations revolve around Yimwilai's purported failure to disclose vital information during his tenure, resulting in financial losses for Zipmex customers. According to the SEC's investigation, Yimwilai allegedly transferred cryptocurrency from Zipmex Thailand's wallets to overseas digital wallets without prior disclosure to customers.Photo by Olivier Darny on Pexels Unauthorized digital asset movementsThe SEC's findings indicate that customer assets held in Zipmex Thailand's Z Wallet were moved into overseas digital wallets before any official announcement regarding changes in terms and conditions. This conduct, the regulator asserts, contradicts the information provided by Zipmex Thailand, constituting fraudulent misrepresentation. Yimwilai served as CEO of Zipmex Thailand from August 2018 to November 2023, as per his LinkedIn profile. This deceptive action misled users regarding the security of their assets, the SEC claims, prompting the Commission to charge him with violating Section 82 of the Digital Asset Business Operation Act B.E. 2561. The SEC's accusations extend to Zipmex Thailand's submission of inaccurate reports on customer assets and violations of regulatory requirements. The regulator contends that the reports submitted by Zipmex Thailand were inconsistent with independently verified information. Inviting further legal actionIn response to these allegations, the SEC has forwarded charges against Yimwilai to the Office of the Public Prosecutor (OPP) for further legal proceedings. The SEC has also filed a formal complaint against Yimwilai with the Office of the Provincial Crime Suppression Division, indicating a pursuit of additional legal action. The determination or otherwise of legal liability will be a pivotal step in this process, emphasized by the SEC. Zipmex Thailand, a subsidiary of Singapore-based Zipmex under the leadership of Marcus Lim, obtained approval to operate from the Ministry of Finance and SEC in 2020. The company reportedly came under scrutiny from financial regulators over its acquisition by V Ventures in 2023.  V Ventures backed out of the $100 million buyout of the company last year, which would have included the return of customer deposits. It claimed that Zipmex had not lived up to the terms of the buyout contract.On Feb. 2, the Thai SEC directed Zipmex to temporarily suspend its digital asset trading and brokerage services, granting the firm a 15-day period to adhere to regulatory guidelines. Earlier reports had highlighted Zipmex's application for court protection amidst a wave of bankruptcies among crypto lenders. In November 2023, Zipmex proposed a restructuring plan to reimburse creditors at $0.30 on the dollar, encountering resistance from key stakeholders. The initial offer stood at three cents on the dollar, with the potential to increase to 30 cents in the event of optimized capital recovery.

South Korean brokerage firms are expanding into the security token offering (STO) space, a sector gaining attention ahead of the upcoming presidential election in June. Photo by Raymond Yeung on UnsplashDedicated STO divisionsAccording to local outlet Kukinews, major players like Mirae Asset Securities, Hana Securities and Shinhan Securities are either establishing dedicated STO divisions or partnering with tokenization platforms to stay ahead of the curve. Some are also exploring fractional investment opportunities tied to real-world assets (RWAs) such as real estate, art and music copyrights. Security tokens are blockchain-based digital assets that represent rights to real-world assets (RWAs) and, as the name suggests, are classified as securities. The financial industry is increasingly interested in this technology for its potential to accelerate digital transformation. However, trading such tokens requires a comprehensive legal framework—something that is currently lacking in Korea. Election renews STO interestSTOs have resurfaced as a key topic, with presidential candidates from both the left and right likely to include them in their campaign agendas. The renewed interest follows the ousting of President Yoon Suk-yeol earlier this month, after the Constitutional Court upheld his impeachment by the National Assembly over his declaration of martial law. Before the presidential election became imminent, legislative discussions around STOs had stalled in the National Assembly and received little attention. Among the standout moves made by presidential hopefuls, Lee Jae-myung, a primary candidate from the Democratic Party of Korea (DPK), recently added Kim Yong-jin, an STO expert and professor at Sogang University, to his policy advisory group. Meanwhile, lawmakers across party lines have introduced amendments to the Electronic Securities Act and the Capital Markets Act, aiming to establish a regulatory framework for STOs, according to the National Assembly’s National Policy Committee. This regulatory shift in political circles favoring STOs has been anticipated by the financial industry. An unnamed official from a brokerage firm predicted that presidential candidates will propose measures such as legalizing security tokens, advancing a regulatory framework for virtual asset service providers (VASPs), promoting investment in crypto-related businesses and permitting the use of stablecoins. Some observers even expect these bills to receive final approval within the year. Brokerage meets blockchainKorean securities firms' push into the STO space is further highlighted by a recent partnership between Shinhan Securities and the Solana Foundation.According to Yonhap, the two parties signed a memorandum of understanding (MOU) to collaborate on expanding the digital asset ecosystem. Their cooperation will focus on STOs, RWAs, crypto custody infrastructure, stablecoin payments for both online and offline use and responses to global policies and regulations.

The Securities and Exchange Commission (SEC) in Thailand has made a significant adjustment to the rules governing digital token investments. The SEC has decided to eliminate the investment ceiling previously imposed on retail investors participating in initial coin offerings (ICOs) tied to real estate and infrastructure.Photo by Colton Duke on UnsplashFostering digital economy growth and developmentThe announcement, specifying the revised criteria, was officially published in the Royal Gazette, with the measure taking effect on Tuesday. This move allows retail investors greater access to ICOs involving tokens backed by real estate or linked to real estate revenues. The SEC emphasized that, in addition to ensuring appropriate investor protection, its role extends to encouraging the utilization of technology and innovation in fundraising. The objective is to foster sustainable growth in the capital market and support the development of the digital economy. Prior to this adjustment, retail investors faced a restriction of a 300,000 baht ($8,450) investment limit per offering concerning digital tokens backed by infrastructure or real estate. The SEC's decision to remove this limitation aligns with the goal of managing product risks effectively while promoting a more inclusive environment for retail investors in the realm of digital token investments. Facilitating custodial walletsFurthermore, the SEC is currently undertaking a review of criteria to facilitate the establishment of custodial wallet provider businesses for digital asset operators with common major shareholders. This initiative aims to enhance the regulatory framework and provide guidelines for businesses involved in digital asset storage. Custodial wallets will be permitted in Thailand if operated by publicly traded companies with experience in digital asset storage. All Thai citizens will have a touch point with digital wallets shortly under a government program, a $14 billion digital handout scheme, which has been approved to distribute digital currency to the public through digital wallets. DASP approvalsAs part of its supervisory role, the SEC will also be responsible for granting permissions to digital asset service providers (DASPs) to expand into new business lines. Digital asset operators seeking to diversify their operations are required to obtain approval from the SEC before proceeding. This measure is intended to ensure the effective oversight of such businesses and maintain the credibility of the digital asset industry by preventing illegal operations. It’s likely no coincidence that tokenized real estate is being embraced in Thailand, given the background of Thailand’s recently installed Prime Minister, Srettha Thavisin. In 2021, Thavisin’s company played a role in funding crypto-friendly investment management firm XSpring Capital to the tune of $225 million. His firm also introduced a real estate-backed ICO in conjunction with XSpring. While Thailand’s SEC is moving forward with tokenized real estate, it doesn’t feel the same way about exchange-traded funds (ETFs). In the wake of the recent approval of spot bitcoin ETFs in the United States, the Thai SEC responded by stating that it currently has no plans to allow asset managers to launch similar products within the Thai market.