Non-Fiat Crypto Exchanges in Korea Urge Banks for Real-Name Accounts

Hong Kong Analyzes Web3 Approach of Regional PeersHong Kong’s ambitions in Web3 are on the rise as it strives to establish itself as a global hub for digital assets. The Research Unit of the Legislative Council Secretariat of Hong Kong has recently released a summary of a document titled “Development of Selected Regional Web3 Technologies,” shedding light on the city’s involvement in Web3.According to the report summary which was published on June 14, the Hong Kong government is actively promoting the development and utilization of Web3. In the fiscal budget for 2023–2024, the Financial Secretary announced accelerated efforts to build Hong Kong’s Web3 ecosystem, along with the establishment of a dedicated development task force focused on virtual assets.Photo by Jimmy Chan on PexelsPace of developmentHowever, concerns have emerged about Hong Kong’s comparatively slower pace of development in contrast to other regions. Various regions across the globe, particularly in Asia and the Gulf region, have implemented measures to expedite the progress of Web3 and its associated technologies and applications.To address these concerns, the report suggests that Hong Kong should broaden its focus beyond financial services and virtual assets. Instead, it should actively promote innovation in other areas of Web3 technology, such as blockchain and metaverse technology.Scrutinizing regional Web3 developmentIn response to a request from Councilor Wu Kit Ching, the research group has conducted a study on leading regions in Web3 technology and application development, examining their strategies.The study primarily highlights Japan, Singapore, South Korea, and the United Arab Emirates (UAE) as these regions have demonstrated proactive approaches in developing Web3 technologies, and they have become global or regional innovation hubs. Japan, for instance, has established high-level policy guidance and dedicated offices to coordinate Web3 policies across various government departments.Other regions covered in the study have focused on specific areas of Web3. Singapore and the UAE, for example, are exploring blockchain technology through industry collaborations and the establishment of incubation centers. Meanwhile, South Korea is actively launching metaverse strategies to foster innovation across multiple sectors.The summary also provides an overview of the key characteristics, foundational technologies, and applications of Web3. It outlines recent developments in Web3 within Hong Kong and analyzes the development scenarios of selected regions, including Japan’s comprehensive approach and the application-focused initiatives of other regions.The document emphasizes that Web3 represents a decentralized network that empowers users with greater autonomy and control over their digital lives. While the Hong Kong government has introduced measures to support the development of the Web3 ecosystem, particularly in the virtual asset market and related financial services, concerns persist regarding Hong Kong’s slower progress in other areas of Web3 technology compared to its counterparts in Asia and the Gulf region. These regions are capitalizing on their strengths and exploring broader applications of Web3.Hong Kong’s engagement in Web3 and its ambition to thrive in this domain is becoming more evident with each passing day. The summary of the document sheds light on the Chinese autonomous territory’s efforts, while also highlighting the need to expand its focus and foster innovation in various areas of Web3 technology. By doing so, Hong Kong can position itself as a prominent global center for Web3 and leverage the advantages it offers for digital asset development and beyond.

Indonesia's cryptocurrency regulatory body is urging the government to reconsider its tax policies concerning digital assets. Officials from Indonesia’s Commodity Futures Trading Supervisory Agency (Bappebti) argued last week that the imposition of double taxation on crypto transactions warrants a reevaluation. That’s according to a report which appeared in local news source, Bisnis Indonesia, a Jakarta-based daily newspaper. Currently, cryptocurrencies in Indonesia are classified as commodities, subjecting them to a value-added tax (VAT) of 0.11% and an income tax of 0.1%.Photo by Bisma Mahendra on UnsplashProposed changes in 2025Tirta Karma Senjaya, the head of Bappebti, the Indonesian Commodities and Futures Trading Regulatory Authority, highlighted that the classification of cryptocurrencies as commodities might undergo changes in 2025. This potential shift is due to the planned transfer of crypto oversight from Bappebti to the Southeast Asian country’s financial services authority, OJK.It had been speculated that the switch of oversight would potentially reclassify digital assets as securities. With that change would come a necessary adjustment to the applicable tax policy. Tirta suggested that given that cryptocurrencies are expected to be integrated into the financial sector by January 2025, he urged the Tax Director General to reconsider these tax rates. The regulatory body head added that it’s been over a year since the implementation of these rules. With that, tax policies typically undergo annual reviews. Accommodating crypto’s developmental stateAddressing an event in Jakarta, the regulatory body head emphasized the nascent stage of the crypto industry and its regulatory framework. Consequently, he advocated for providing the industry with leeway to mature until it becomes a substantial contributor to national revenue. In response to Bappebti's call for a reassessment of crypto taxes, Dwi Astuti, a spokesperson for the Ministry of Finance, assured that the Ministry would consider input from both industry stakeholders and the public. "We welcome input from Bappebti and the public. It will certainly be discussed internally," remarked Astuti during a media interaction last week. 2023 crypto tax take slumpThe existing tax structure for cryptocurrencies has been in effect since April 2022, generating approximately $2.49 million in revenue in January 2024. In contrast, Indonesia recorded $41.2 million in crypto tax revenue in the previous year. However in 2023, the country witnessed a decline of 63% in crypto tax revenue compared to the previous year, despite Bitcoin's remarkable surge of approximately 160% during that period. Local crypto exchanges such as INDODAX had attributed the significant drop in trading volume throughout 2023 directly to hefty taxes, expressing concerns that it would drive users towards foreign exchanges. Hasan Fawzi from the Ministry of Finance highlighted the trend of decreasing crypto asset transaction values in 2023. Nonetheless, he noted that the number of crypto asset customers continued to rise, reaching 18.06 million users throughout the year. The crypto sector is seen as having a lot of potential in Indonesia. Last October data released by Bappebti suggested robust growth of the crypto investment landscape within the country. Over the space of a year, Indonesia had seen a 10.1% growth in the number of crypto investors. That data may not have been lost on the country’s politicians as in December, crypto featured as an election campaign issue.

Public Confidence in Crypto Wanes in Hong Kong Amid JPEX ScandalThe development of cryptocurrency in Hong Kong has been dented in terms of public sentiment following the JPEX cryptocurrency exchange scandal, according to a recent survey conducted by the Hong Kong University of Science and Technology’s (HKUST) business school.Photo by Alex Plesovskich on UnsplashA two-phase survey methodologyThe survey, the preliminary results of which were disclosed by the business school on Tuesday, aimed to gauge how public attitudes toward virtual assets had been affected by the JPEX scandal, which rocked the crypto community within the Chinese autonomous territory.While the survey is set to conclude on October 20, the preliminary findings have already revealed a noteworthy shift in public perception. Notably, 41% of respondents expressed a preference not to hold virtual assets, marking a 12-percentage-point increase from the earlier study conducted in May.Moreover, only 20% of respondents indicated a desire to hold virtual assets in the future, reflecting a five-percentage-point decrease compared to the previous survey. These findings suggest a growing skepticism among Hong Kong’s populace regarding the cryptocurrency industry.Post-JPEX public sentimentThe initial survey involved 5,700 participants aged 18 and above and was conducted between April 24 and May 23. Phase two of the survey commenced on September 28, approximately 11 days after the allegations against JPEX came to light. The results were compared to a similar survey conducted between April and May to assess the evolving sentiment. Between September 28 and October 5, phase two of the survey had compiled responses from 2,200 individuals.HKUST acknowledged that the second survey occurred in the “aftermath of an alleged financial fraud” involving a cryptocurrency platform but refrained from directly naming JPEX in the report.Professor Allen Huang, Associate Dean of HKUST’s business school, attributed the shift in sentiment to the recent financial scandal, which thrust the cryptocurrency industry into the spotlight. This heightened attention has led to a “more conservative investment appetite” among the public. He emphasized the need for greater educational initiatives to enhance public awareness and understanding of the risks and potential of this emerging field.HKUST’s business school stated that the survey’s primary objective was to assess the attitudes and viewpoints of Hong Kong’s residents regarding virtual asset investments, considering their experiences, intentions, and the regulatory safeguards in place.JPEX falloutThe JPEX scandal, which allegedly involved a $166 million fraud scheme, unfolded over several months before Hong Kong authorities publicly announced their investigation into the exchange. It forced local regulators to reassess the soundness of crypto trading-related regulatory measures applied within the Chinese autonomous territory.That reassessment led to regulators concluding that efforts needed to be intensified to combat unregulated platforms operating within Hong Kong. In response to the JPEX saga, the Hong Kong Police Force and the Securities and Futures Commission (SFC) established a cryptocurrency-focused working group earlier this month to combat illicit activities on cryptocurrency exchanges.The evolving sentiment in Hong Kong reflects the broader challenges and concerns surrounding the cryptocurrency industry. As regulatory scrutiny increases and major incidents like the JPEX scandal come to light, it’s clear that fostering public trust and understanding is a pressing priority for crypto businesses and the broader crypto community.