Bank of Korea Conducts Successful CBDC Pilot Test with Financial Institutions

Hong Kong Moves to Enable Retail Crypto TradeHong Kong’s Securities and Futures Commission (SFC) has moved to enable retail participation in crypto trading within the Chinese autonomous territory.The SFC has arrived at that determination, according to a report it published on Tuesday. The report, titled “Consultation Conclusions on the Proposed Regulatory Requirements for Virtual Asset Trading Platform Operators Licensed by the SFC (Note 1),” provides an overview of the nature of feedback the Commission received as part of its consultation process relative to virtual asset trading.Photo by Ben Cheung on PexelsRetail investor protectionIn the press release which accompanied the report, the Commission outlined that “a significant majority of respondents agreed to our proposal to allow licensed trading platform operators to serve retail investors.” On that basis, the SFC is moving forward in enabling retail trading of crypto assets through licensed virtual asset trading platforms effective June 1, and it’s setting out to do so while implementing a number of measures to protect retail investors.That will include ensuring that operators provide an appropriate on-boarding process. In the case of crypto asset projects, the SFC is determined to see to it that good governance is implemented, alongside enhanced token due diligence, admission criteria, and disclosures.In the statement, the SFC’s CEO Julia Leung, said that “providing clear regulatory expectations is the key to fostering responsible development.” She added that “Hong Kong’s comprehensive virtual assets regulatory framework follows the principle of ‘same business, same risks, same rules’ and aims to provide robust investor protection and manage key risks. This will enable the industry to develop sustainably and support innovation.”Specific conditionsOne item that the SFC’s new rule-book on virtual asset trading for retail investors outlines is a ban on crypto “gifts.” Effectively any promotions or incentives that lead with free gifts, and this will likely include token airdrops, will be prohibited.In terms of capital liquidity, virtual asset exchanges will be required to maintain a minimum of 5,000,000 Hong Kong dollars ($638,000) at all times as a minimum paid-up share capital. A Platform Operator must at all times maintain liquid capital which is not less than its required liquid capital,” the document outlines.Token due diligenceThe SFC acknowledged that it can be difficult for virtual asset exchanges to carry out due diligence on new tokens. With that in mind, it has incorporated a requirement for any new token to have a twelve-month track record before it can be considered to be listed to provide an indication of such things as supply, demand, maturity, and liquidity. In that way, exchanges have some data to work with in carrying out token due diligence.Smart contracts have been a point of weakness in recent years, with considerable sums lost through hacks that have exploited smart contract code vulnerabilities. To that end, the SFC insists that as part of token due diligence, new assets will have to undergo smart contract audits performed by independent assessors.Given that the spate of recent crypto platform failures implicated loss of customer deposits, the rule-book considers the need for segregation of client funds. Exchanges will need to segregate funds and can either hold them separately from the assets of the exchange itself or have them held in escrow.

Indian Crypto Platform Mudrex Expands Operations in ItalyMudrex, the Indian cryptocurrency investment platform, has achieved a new milestone by successfully registering to operate in Italy.News of Mudrex’s move into the Italian market emerged via a press release published on Tuesday, as well as through an interview given recently by CEO and Co-Founder Edul Patel to CoinDesk. The expansion into Italy marks a rare international move for Indian crypto entities, which have faced challenges due to stringent taxation policies and the global crypto market’s fluctuations.Photo by Mathew Schwartz on UnsplashGlobal expansion planPatel unveiled Mudrex’s ambitious plan for global expansion, with half of the team actively working on international initiatives. The firm’s journey into the Italian market involved gaining approval for registration with Italy’s Organismo Agenti e Mediatori (OAM), a crucial step for crypto firms operating in the country. This registration, granted on September 1, was a strategic move that the company had been carefully planning. Patel explained:“We just wanted some time to pass after the approval before we made the news public.”Coin Sets and thematic indexesDespite having only one million registered users, Mudrex stands out as one of India’s largest crypto platforms. It offers a unique investment approach, focusing on index investing through Coin Sets, an innovative alternative to speculative trading. These Coin Sets encompass various categories, including small, mid, and large-cap assets, as well as Bitcoin (BTC) and Ethereum (ETH). Additionally, Mudrex provides thematic indexes that cover layer one and layer two solutions, NFTs, metaverse projects, and Dow trackers.“While India is our home and where we initially grew, our international customers have told us that investment products in their regions lack diversity,” Patel noted. “We believe that our product is unique and offers distinct advantages.”Mudrex was established in 2018 in Bengaluru while also establishing an office in San Francisco. Alongside Patel, its other Founders included Alankar Saxena as CTO, Rohit Goyal in the role of VP of DeFi, and Prince Arora as VP of Engineering.In 2021 it raised $2.5 million in funding with a view towards launching crypto mutual funds and ETFs. It followed that up in 2022 when it raised $6.5 million in a pre-series A funding round, supported by Y-Combinator, Arkham Ventures, and Tribe Capital.The firm participated in what has become a crypto platform trend over recent months by incorporating an AI chatbot into its platform in June to assist platform users when it comes to learning about crypto.Lithuanian trading licenseMudrex’s expansion into Italy was facilitated by the company’s prior fulfillment of EU operating requirements. The company had obtained a license in Lithuania less than a year ago, enabling it to navigate the EU regulatory landscape efficiently. During the six months of pursuing registration in Italy, Mudrex’s presence in the EU grew substantially, with user numbers increasing from approximately 5,000 to 17,000.With its foothold established in Italy, Mudrex now seeks to make its investment products accessible through various registered entities, including banking partner apps. Patel confirmed ongoing discussions with potential partners, further signaling the company’s commitment to expanding its global footprint.

Atomic Wallet Hacker Uses Lazarus Crypto MixerThe stolen cryptocurrency from the recent $35 million hack of Atomic Wallet is already being moved to a crypto mixer favored by North Korea’s notorious cyber-hacking group.Photo by Micha Brändli on UnsplashSinbad.ioAccording to UK-based crypto compliance analysis firm Elliptic, the funds have made their way to a crypto mixer used by Lazarus Group, a notorious hacker group that focuses on crypto heists which is believed to have direct ties with the North Korean government.On June 5, Elliptic’s Investigations Team revealed that it had traced the funds from the Atomic Wallet hack to the crypto mixer Sinbad.io. Lazarus had previously used the mixer to launder over $100 million in stolen crypto assets.While the exact amount sent to the mixer was not specified, Elliptic noted that the stolen funds were being exchanged for Bitcoin before undergoing obfuscation through the mixer. Additionally, Elliptic reported that Sinbad.io is likely a rebranded version of Blender.io, another mixer extensively used to launder funds by the Lazarus Group. Blender.io has been sanctioned by the US Treasury.Atomic Wallet hackThe hack of several user accounts on Atomic Wallet occurred on June 3, resulting in losses of up to $35 million. News of the issue broke with the following tweet from the project team (which has subsequently been deleted): “We have received reports of wallets being compromised. We are doing all we can to investigate and analyze the situation. As we have more information, we will share it accordingly.”In a follow-up tweet the next day, the team confirmed that it was investigating the matter with the assistance of a number of “leading security companies.”However, Atomic Wallet later downplayed the incident, stating that less than 1% of its monthly active users were affected. The project team was castigated by users for trying to present the hack as a minor incident. One user took to Twitter to call out the Atomic Wallet team for “having the nerve to come to the networks and say that only 1% of wallets were affected.”The Atomic Wallet project is based out of Tallinn, Estonia, having been founded in 2017. It claims to provide a non-custodial decentralized multi-currency crypto wallet. The product supports over fifty coins and two hundred tokens. It also offers atomic swaps between digital assets, while also supporting integrations with instant exchanges such as Changelly, ShapeShift, and others.Roland Säde, the Chief Marketing Officer of Atomic Wallet, assured users that the team is working tirelessly to recover the stolen funds. He emphasized the need to complete the investigation to develop a concrete plan.Despite the ongoing efforts, Säde urged victims to track the illicit transfers and report them to popular crypto exchanges. By doing so, it was thought that may hinder the scammers from exchanging the funds.Crypto hacking menaceLazarus Group hackers have been the bane of the crypto space in recent years. Elliptic released a report last month that identified Japan as having been the country most adversely affected by the North Korean hackers. It’s understood that the estimated $721 million in stolen crypto from Japan-based entities amounts to nearly nine times the value of North Korea’s exports based on 2021 data.While Atomic Wallet is directly reporting the incidents, Säde believes that having more individuals monitoring the hackers’ activities will make it more challenging for them to move the funds undetected. Unfortunately, Elliptic’s recent findings suggest that for many victims, it may already be too late to prevent further misuse of their stolen cryptocurrency.