Terraform Money Trail Leads to Swiss Bank

Hong Kong regulators signal embrace of spot crypto ETFsHong Kong has signaled its readiness to usher in spot crypto exchange-traded funds (ETFs), as the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) jointly announced on Friday that they are prepared to accept applications for such funds.Photo by Oskar Kadaksoo on UnsplashUpdated virtual asset-related policyIn a set of circulars released, a joint circular representing both regulators and a separate circular published by the SFC, they outlined the updated policy for intermediaries engaging in virtual asset-related activities.The SFC, responsible for overseeing financial markets in Hong Kong, expressed its openness to applications for the authorization of funds with exposure to virtual assets, specifically mentioning virtual asset spot exchange-traded funds (VA spot ETFs).This move expands beyond the existing crypto futures ETFs, demonstrating Hong Kong’s commitment to adapting its regulatory landscape to the evolving crypto market. It also builds on positive commentary made by SFC CEO Julia Leung on the subject last month. Leung stated that the regulator was open to the notion of retail participation in spot crypto ETFs in Hong Kong.Leung stated:“We welcome proposals using innovative technology that boosts efficiency and customer experience. We’re happy to give it a try as long as new risks are addressed. Our approach is consistent regardless of the asset.”Use of license platformsFriday’s SFC circular emphasized that transactions conducted by these ETFs must occur through SFC-licensed crypto platforms or authorized financial institutions. The SFC outlined that both in-kind and in-cash subscription and redemption methods are permissible for SFC-authorized spot VA ETFs, providing flexibility in fund management.Custody requirements were also addressed, with the SFC specifying that the trustee or custodian must delegate its crypto custody function exclusively to an SFC-licensed Virtual Asset Trading Platform (VATP) or entities meeting the crypto custody standards set by the HKMA.Industry responseThese latest circulars from the regulators have prompted a response from the industry. The Hong Kong Stock Exchange has reacted, welcoming the announcement. It believes that such a move would serve to strengthen Hong Kong’s position as a digital asset hub in the region. The exchange already lists a number of crypto futures ETFs, with multinational investment bank UBS having recently extended access to these products to its Hong Kong-based high-net-worth clients.While the regulatory landscape in the United States in 2023 has proven to be hostile, one very positive development appears to be ongoing work towards spot bitcoin ETF approval. Although still a matter of speculation, many industry commentators believe that approval will come through on Jan. 10. The advent of spot bitcoin and crypto ETFs in both eastern and western markets would likely make for an extremely bullish 2024 for the industry.Hong Kong’s move towards spot crypto ETFs aligns with its proactive stance in adapting to the rapidly evolving crypto landscape. The regulatory framework, as outlined in the circulars, reflects a balance between fostering innovation and ensuring investor protection. The city’s financial authorities have taken a comprehensive approach to review and update policies, once again signaling their ongoing commitment to embracing the growing role of virtual assets in the financial world.

Bullish Market Analysis Finding as Asia Doubles Crypto UsersComing off the back of the last bull run, the crypto sector has been challenged with cooling price levels also affected by global macroeconomic headwinds. Despite that, a recent crypto market study by financial news platform Finbold has found encouragement with a significant increase in crypto users, most notably in Asia.Photo by Jéan Béller on Unsplash37% increase in global usersAccording to the market data presented by Finbold on Thursday, the number of global crypto users has reached 417.5 million as of 2023, representing a year-over-year growth of 36.88%. This translates to an increase of 112.5 million users compared to the 2022 count of 305 million.Several factors contribute to the growth in crypto user numbers. The fear of missing out (FOMO) phenomenon plays a significant role, as individuals see market downturns as an opportunity to enter the market and potentially benefit from their investments.Mainstream adoption and awareness of cryptocurrencies have also attracted new users, aided by the accessibility and convenience of crypto platforms and exchanges. Additionally, the acceptance of cryptocurrencies as a form of payment by businesses has further fueled user growth.In emerging markets with unstable economies and limited access to traditional banking services, cryptocurrencies have been embraced as an alternative and inclusive financial solution, driving adoption in those regions.Standout growth in AsiaAsia leads the way with 260 million users as of May 2023, marking an astonishing 100% growth from the previous year’s figure of 130 million. North America follows with 54 million users, witnessing an addition of 3 million compared to the 2022 count of 51 million.When examining crypto ownership in relation to the population of each country, Thailand claims the top spot in 2023 with a share of 9.32%. India comes in second with 7.23%, followed by Brazil at 6.98%. Pakistan ranks fourth with 6.4%, while France rounds out the top five with 5.9%.Observers believe that regional crypto user trends will be influenced by regulations. Asia dominates the market, driven by the increasing adoption of blockchain-based payment solutions in countries like India, China, Singapore, South Korea, and Japan, particularly within the banking, financial services, and insurance sectors.African & European user declineAfrica experienced a decline of 28%, going from 53 million to 38 million users. Similarly, European users dropped from 43 million to 31 million. Notably, Europe has witnessed a drop in usage, coinciding with the enactment of the Markets in Crypto Assets (MiCA) law, which aims to create a legal framework for the crypto asset market.The growth in global user numbers is remarkable, considering the challenging phase the crypto sector has been going through. High-profile incidents, including the FTX crypto exchange collapse and the Terra (LUNA) ecosystem crash, have eroded trust within the sector. Moreover, the crypto market has had to navigate an uncertain regulatory landscape, with jurisdictions like the United States cracking down on the sector.Lawsuits filed by the US Securities and Exchange Commission (SEC) against Ripple, Binance, and Coinbase for alleged securities laws violations are likely to discourage investor involvement. Regions with stricter regulations, such as North America and Europe, are expected to lose crypto business to the Asia-Pacific region.

Korbit Joins Hands with Shinhan Card and Good Neighbors for NFT CampaignKorean crypto exchange Korbit said Thursday that it is participating in the Cambodia Youth Independent Tuk-tuk Transportation IG Group organized by the Good Neighbors Global Impact Foundation to help create jobs and support economic stability for youths in Kampot, southern Cambodia. To do so, the exchange has launched a campaign with Korean credit card company Shinhan Card and the Good Neighbors Global Impact Foundation to issue environmental, social, and governance (ESG) donation certificates minted as non-fungible tokens (NFTs).Photo by Markus Winkler on UnsplashTuk-tuks, or auto rickshaws, are the main mode of transportation in Cambodia, offering a larger job market for youths who are looking to become financially independent. Yoo Tae-hyun, Head of the Platform Business Group at Shinhan Card, expressed his hopes that the campaign will empower the youths and help them become more independent.Campaign participationShinhan cardholders who wish to participate in the campaign can select “Tuk Tuk Donation Certificate NFT Campaign” found under the Areumin section in Shinhan’s app service Shinhan pLay. They can then make a donation with their card or card points and apply for an NFT. Korbit said that it would airdrop all NFTs to donors at the end of the campaign in December, which can be verified on Korbit’s NFT marketplace and Shinhan pLay app’s MyNFT service. The images minted on the donation NFTs, which depict Cambodian youths on tuk tuks, are a contribution from Park Hye-geun, an artist who has worked on children’s books, educational materials, and more.Notably, during a memorandum of understanding (MOU) signing ceremony last Monday, the three entities opted for an NFT certificate confirming their partnership instead of directly signing a document as a means to further implement NFTs into their collaboration.Boosting ESG efforts“We are pleased to contribute to creating a trend of making donations through NFTs and will continue to uphold our ESG management to have a positive impact on society,” said Oh Se-jin, CEO of Korbit. Meanwhile, Hyun Jin-young, CEO of the Good Neighbors Global Impact Foundation, applauded Korbit’s efforts to promote a culture of donation and address global social issues through the use of NFTs. He also stated that he looks forward to various technological collaborations with Korbit in the future.Korbit has previously worked with Shinhan Card on various cultural and artistic ESG activities, such as hosting an art fair in April in Seoul, where some 200 artists showcased their artworks.