Alchemy Pay scores second money services license in United States

Korea and Japan Collaborate to Develop Accounting Standards for Virtual AssetsThe Korea Accounting Institute (KAI) announced today that it held a bilateral meeting yesterday with the Japanese Financial Accounting Standards Foundation (FASF) to discuss devising accounting standards for virtual assets. Among the attendees were high-level officials of the FASF, including Yasunobu Kawanishi, Chair of the Accounting Standards Board of Japan.Photo by Shubham’s Web3 on UnsplashConsensus on establishing standardsBoth parties agreed on the importance of establishing accounting standards for virtual assets. These standards should be practical and easy to follow, ensuring that they offer sufficient information to readers of financial statements.Reciprocal sharing of progressKAI is in the process of revising the Korean version of the International Financial Reporting Standards (K-IFRS) to require companies to disclose information related to virtual assets within the annotations of their financial statements. This mandatory disclosure of virtual asset-related details was announced by the Korean Financial Services Commission last month, with implementation scheduled for January of next year. This significant update was a topic of discussion in the meeting. Similarly, the FASF reciprocated by sharing its own progress and advancements.This meeting was arranged in light of the deepening relations between the two nations. The close collaboration between the two groups is poised to give Korea momentum to broaden its global presence. Moving forward, the accounting bodies of both countries are committed to continuing their cooperative efforts.

South Korean lawmakers are moving to seize control of the nation’s stalled second phase of digital asset legislation, aiming to bypass months of interagency gridlock and introduce a comprehensive regulatory framework by January. The legislative acceleration comes as Seoul races to align with global standards following the implementation of the U.S. GENIUS Act in July, a shift that has intensified pressure on local regulators to formalize oversight of the crypto sector. According to a report from the Maeil Business Newspaper, the ruling Democratic Party of Korea (DPK) plans to introduce the Digital Asset Basic Act as a lawmaker-sponsored bill rather than wait for a government submission. The procedural move is intended to ensure that formal deliberations can begin during the February provisional session. Lawmaker Kang Jun-hyeon, a DPK member of the National Policy Committee, told reporters on Dec. 11 that relying on the government’s timeline would jeopardize passage of the bill in the first half of next year. Kang cited points of disagreement among the parliament, the government, and industry stakeholders. Among the authorities, in particular, a standoff between the Bank of Korea (BOK) and the Financial Services Commission (FSC) over monetary policy and issuance authority has been a key source of delay.Photo by Lauren Seo on UnsplashDraft sets ‘major’ stablecoin requirementsAt the heart of the legislation is a new classification system for stablecoins. The government delivered its draft for the Digital Asset Basic Act to DPK’s Digital Asset Task Force, outlining its intention to classify won-denominated stablecoins exceeding a certain issuance threshold as “major digital payment tokens.” According to Blockmedia, citing sources familiar with the closed-door briefing to the task force, these assets would fall under a rigorous oversight framework developed in consultation with the central bank. Under the draft rules, issuers would be required to maintain 100% reserves, prohibited from making interest payments to holders, and obliged to submit detailed issuance plans to the FSC. Foreign-issued stablecoins would only be permitted to circulate domestically if the issuer establishes a local branch. Although the government ultimately submitted its draft to the DPK, the delivery was delayed by two days, missing the Dec. 10 deadline set by the party. Officials attributed the postponement to unresolved interagency disagreements. The central bank had argued that any issuance should require unanimous approval from all relevant agencies, including itself, but the government agreed to involve the bank only when a token is designated as “major.” The Bank of Korea continues to advocate for a bank-led consortium issuance model, highlighting the coordination challenges that have complicated the bill’s preparation. Supply thresholds emerge as fault lineCritics warn that the proposed regulations could inadvertently tilt the market against domestic innovation. Analysts argue that if the threshold for the "major" designation is set too low, new won-based issuers may face compliance costs that could undermine their business viability before they reach meaningful scale. They added that setting the bar for entrenched dollar-backed issuers such as USDT and USDC is also complex, given that their combined global issuance already exceeds $250 billion. Market participants said concerns about triggering the “major” designation could prompt Korean issuers to cap supply to avoid heightened scrutiny, effectively stifling growth from the outset. Despite these concerns, political will to close the policy vacuum is hardening. The DPK intends to move the legislation forward on its own timetable, incorporating the government’s input but steering the process through parliament. Lawmaker Kang emphasized that while numerous issues remain, the task force aims to narrow the debate to a few essential questions before the bill’s planned introduction in January. Industry representatives have largely welcomed the clearer timeline, viewing the move as a necessary step to reduce uncertainty as the global crypto sector comes under more formal regulatory oversight. 

USDT, the leading U.S. dollar stablecoin issued by Tether, has been highlighted as a major conduit for money laundering and scams in Southeast Asia, according to a United Nations report released on Monday.Photo by Mathias Reding on UnsplashIllicit stablecoin useThe report has been titled “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden and Accelerating Threat.” It points out that online gambling platforms, particularly those operating illicitly, are among the favored channels for cryptocurrency-based money launderers, with a notable emphasis on the use of Tether or USDT. In a foreword to the report, Jeremy Douglas, the UN’s Regional Representative for Southeast Asia and the Pacific, noted that technology had aided crime networks in Asia, and in particular, the Mekong Delta region. Developing upon that idea, he added:”This has necessitated a revolution in the regional underground banking architecture, resulting in the development of systems and infrastructure capable of moving and laundering massive volumes of state-backed fiat and cryptocurrencies.”The report itself asserts that illegal and under-regulated crypto exchanges have become “foundational pieces of the banking architecture used by organized crime.” The document highlights law enforcement efforts in disrupting multiple money laundering networks linked to the illicit transfer of Tether funds. Last August, Singaporean authorities dismantled a network through an operation, recovering approximately $735 million in both cash and cryptocurrency. ‘Pig butchering’The UN report further suggests that USDT has been extensively employed in various underground fraud activities, including so-called "pig butchering" romantic scams. Last November, Tether froze $225 million in stolen USDT following investigations by Tether in collaboration with crypto exchange OKX and the U.S. Department of Justice. The money had been held in self-custodied wallets associated with an international human trafficking group in Southeast Asia orchestrating a pig-butchering scam. In December, Tether CEO Paolo Ardoino informed U.S. legislators in a shared letter that the company has enlisted the U.S. Secret Service and Federal Bureau of Investigation onto its platform. Later that month, the Chinese authorities uncovered a massive underground banking operation that was designed to evade the country’s foreign exchange controls. There was more related activity in December when it emerged that USDT has been integrated into the shadow economy in Cambodia, against a backdrop of the currency being prohibited for the purpose of trade within the Southeast Asian country. TRM Labs reportIn July of last year, a report by blockchain analytics firm TRM Labs, found that pro-ISIS terrorist groups in Central and Southeast Asia and the Middle East are increasingly using cryptocurrency, with a particular preference for USDT transacted over the Tron blockchain network. The UN report cites the popularity of USDT among those engaged in cyber-fraud and online casino operations, located in Myanmar, along the border with Thailand. Throughout 2023, Tether witnessed a notable expansion in its share of the global stablecoin supply, growing from 50% to 71%. At the time of writing, USDT has a market cap of $95 billion with stablecoins having an overall market capitalization of $134 billion. The UN's findings raise concerns about the stablecoin's role in facilitating illicit activities and underscore the need for enhanced regulatory scrutiny within the rapidly evolving crypto landscape.