India’s WazirX Partners with TaxNodes to Simplify Taxes

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.

South Korea to Revive Tech Exports with Metaverse, BlockchainThe South Korean Ministry of Science and ICT revealed today a strategy to enhance the country’s tech exports. The plan includes leveraging the potential of the metaverse and blockchain as promising export items.Photo by Pixabay on PexelsEmphasis on the digital sectorIn response to the recent decline in exports, the strategy seeks to establish new sources of growth by prioritizing the digital sector, which has historically been a key driver of Korea’s exports. Recognizing the complex challenge posed by the global economic slowdown and other factors, all government ministries are collaborating to counteract the export slowdown.The plan leverages South Korea’s digital capabilities and implements proactive measures to adapt to evolving export trends, including the recent advancement of generative artificial intelligence (AI) tools and the acceleration of digital transformation. By tapping into emerging markets and nurturing innovative companies, the government strives to diversify its export portfolio and strengthen its position in the global market.Despite achieving a record high of $248.8 billion in tech exports in 2022, Korea has faced year-on-year declines since July 2022 due to the global economic downturn. The semiconductor sector, which accounts for more than half of the nation’s tech exports, has been particularly sluggish. Nevertheless, the rise of new tech markets driven by significant technological advancements, such as ChatGPT, and the global push for digital transformation offer opportunities to overcome the current export slump.Emerging marketsAgainst this backdrop, the government is committed to backing the development of products that resonate with the evolving export landscape. It is eyeing emerging markets, notably the Middle East, Southeast Asia, and Latin America, recognizing their fertile grounds for the swift adoption of evolving tech trends, fueled by their substantial youth populations. Furthermore, the government plans to provide policy-level support to tech companies.Government supportUnder this plan, the government will identify promising companies and offer assistance, including consultation and guidance on product commercialization. It will also support metaverse companies participating in overseas projects by covering localization development costs.In the blockchain field, comprehensive support, including technology verification, consulting, and marketing, will be provided to those working towards international standardization for NFTs and their overseas commercialization.As part of this initiative, exhibition rooms will be established on metaverse platforms like ZEPETO and IFLAND in September. These platforms will provide opportunities for innovative firms to showcase their products. At the same time, the plan will facilitate interaction between Korean companies and overseas buyers through online and offline events to boost exports.

In a recent blog post, Christopher Hui, Hong Kong's Secretary for Financial Services and the Treasury Bureau (FSTB), announced a stringent deadline for unlicensed virtual asset service providers (VASPs) to submit licensing applications, as well as outlining the intention to develop a regulatory framework for over-the-counter (OTC) venues.Photo by Manson Yim on UnsplashUnlicensed VASP deadlineThe Hong Kong government's financial services department has set Feb. 29 as the cutoff date for applications from VASPs that are currently unregistered and unregulated. Those not approved must cease operations by May 31. The move comes as the Securities and Futures Commission (SFC) established a licensing system for VASPs, acknowledging a transitional period for those operating before its implementation. Midway through last year, the SFC issued a stern warning to unlicensed crypto trading platforms engaging in what it termed as “improper practices.” Hui emphasized that VASPs wishing to continue operations in Hong Kong must submit their license applications by the end of this month. Failure to meet the relevant requirements outlined by the SFC could result in the issuance of a "no-deeming notice" for existing service providers. This notice mandates that they must halt operations either by May 31 or three months after receiving the notice. Service providers failing to submit their applications by the February deadline are also expected to cease operations by the end of May. As the deadline approaches, Hui highlighted that the SFC is actively preparing for enforcement work, including issuing notices to disapproved service providers and intensifying publicity efforts. Proposed regulatory framework for OTCsHighlighting the specific role OTC venues played in some fraud cases involving unlicensed VASPs in 2023, Hui announced that the SFC plans to launch a consultation on a proposed regulatory framework for OTC crypto venues. The consultation will encompass virtual-asset outlets, including shops and online platforms. Hui emphasized the necessity of regulating OTC venues to prevent investor deception and protect against fraudulent activities. This move aligns with Hong Kong's ongoing efforts to create a vibrant sector and ecosystem for virtual assets. The city implemented a licensing regime for crypto companies in June of the previous year, with companies requiring approval before June of the current year to continue operations. Cautioning investorsHui also took the opportunity to caution investors about the volatility and value of virtual assets. He stressed that many digital assets lack intrinsic value and exhibit price volatility, urging investors to thoroughly understand details and assess associated risks before engaging in related investments. Furthermore, Hui emphasized that only platforms officially licensed by the SFC should be used for virtual asset transactions. Additionally, Hong Kong is exploring a regulatory regime for stablecoin issuers, proposing that fiat-backed stablecoin issuers obtain a license from the Hong Kong Monetary Authority. As Hong Kong strengthens its regulatory framework, it aims to create a secure and compliant environment for the evolving landscape of virtual assets.