China disrupts massive crypto-related laundering operation

South Korean Firms Combine Strengths to Draw Hobbyists into the MetaverseCom2Verse, the metaverse subsidiary of South Korean game developer Com2uS, has formed a partnership with Somssidang, a leading hobby sharing platform, and Hana Bank, a prominent financial institution, to attract hobbyists to the metaverse.That’s according to a report by local news agency Newsis. This collaboration aims to create an infrastructure within Com2Verse’s metaverse that offers hobby classes and extends financial support to class providers.Photo by Steve Johnson on UnsplashSeminars and classes in metaverseThrough the combined expertise of the partnering companies, they strive to deliver engaging seminars and interactive classes in the metaverse, while actively promoting and expanding its ecosystem.Com2Verse plans to enable its metaverse users to partake in virtual as well as face-to-face courses offered by Somssidang. This will establish an environment conducive to the growth of hobby-related businesses, effectively bridging the gap between the physical and virtual realms. Somssidang, on its part, aims to expand its operations by providing high-quality content materials, such as classes by distinguished experts, to Com2Verse.Somssidang, boasting a user base of 1.2 million, stands as Korea’s largest hobby platform. The platform is currently offering a wide range of hobby classes, both online and in-person, across the nation. In addition to organizing lectures, Somssidang sells a wide range of do-it-yourself kits, as well as tickets for concerts, exhibitions, and tours. Furthermore, Somssidang provides specialized hobby workshops that are specifically tailored to meet the needs and preferences of business customers.Financial groundworkHana Bank, in collaboration with Com2Verse, will lay the financial groundwork necessary to support the metaverse. This partnership includes extending financial assistance to small business participants within the metaverse and promoting recreational activities for socially marginalized groups.CEO statementsCom2Verse CEO Lee Kyoung-Il expressed his conviction that the company’s metaverse will go beyond the traditional realm of online classes, offering educational courses that exceed expectations. He also emphasized the metaverse’s capacity to provide a diverse range of services, enabling users not only to enjoy their hobbies but also to achieve personal fulfillment. Somssidang CEO Jeong Myeong-won affirmed the platform’s commitment to developing content and services tailored specifically to the metaverse.Kim So-jung, Deputy President of Hana Bank, said this opportunity would converge cultural and financial sectors to realize our daily lives onto the metaverse. Kim added that Hana Bank is committed to ongoing strategic cooperation with the other two partners to deliver innovative financial services and fulfill its social responsibilities.

South Korea’s financial regulator is preparing a second major cryptocurrency bill that would expand investor protections, strengthen stablecoin safeguards, and potentially impose governance changes at the country’s largest exchanges, as domestic token projects warn that regulatory uncertainty is curbing growth. The Financial Services Commission (FSC) is drafting the Digital Asset Basic Act, a so-called “phase two” bill that follows an earlier virtual asset user protection regime which took effect in July 2024. According to Yonhap News, the bill is expected to address stablecoin risks by requiring issuers to hold reserve assets in instruments such as bank deposits and government bonds, and to deposit or place in trust at least 100% of outstanding issuance with banks or other designated custodians. It would also extend existing financial-sector rules to crypto firms in areas including disclosures, terms and conditions, and advertising. In addition, the proposal could impose no-fault liability on virtual asset service providers for losses stemming from hacks or system failures, in line with standards under Korea’s Electronic Financial Transactions Act, which governs traditional financial institutions and payment services.Photo by Timothy Ries on UnsplashGovernance dominance at exchangesA separate report by KBS said the draft bill includes measures to overhaul governance at South Korea’s four major crypto exchanges—Upbit, Bithumb, Coinone, and Korbit—which together serve about 11 million users. The FSC has raised concerns about concentrated control by founders and major shareholders, and is considering a governance framework similar to that applied to alternative trading systems (ATS) under Korea’s Capital Markets Act. That could include limits designed to prevent any single shareholder from holding too much control, capping controlling stakes at around 15% to 20%. Under Korea’s current Capital Markets Act, an ATS is generally barred from holding more than 15% of voting shares, including those held by related parties, with limited exceptions allowing stakes of up to 30%. If similar limits were applied to crypto exchanges, the changes could affect Dunamu, the operator of Upbit. Dunamu Chairman Song Chi-hyung holds a stake in the mid-20% range and, under the proposal as described, could face pressure to sell roughly 10% of his holdings. The proposal could have implications for the deal, as Dunamu is pursuing a merger with Naver Financial through a comprehensive stock swap. While the bill’s broad outlines are taking shape, regulators are still working to narrow differences over stablecoin rules, and the final proposal is expected to be submitted to the National Assembly next year. Key unresolved issues include eligibility requirements for stablecoin issuers, whether to establish an interagency consultative body during the licensing process, initial capital thresholds, and whether a single entity should be allowed to both issue and distribute stablecoins. The core dispute centers on who should be allowed to issue stablecoins. The Bank of Korea is said to favor limiting issuance to consortia in which banks hold at least a 51% stake, while the FSC is believed to oppose writing a mandatory bank ownership threshold into law, arguing that such a requirement could limit broader participation by technology firms. ‘Kimchi coin’ listings stall amid cautionEven as policymakers push ahead, regulatory uncertainty is curbing growth among South Korean blockchain projects. News1 reported that Upbit listed only one token from a domestic project in 2025, out of 54 tokens added for trading since the start of the year—the native token of Story, a peer-to-peer intellectual property network powered by blockchain and co-founded by Korean entrepreneur Lee Seung-yoon. Upbit also removed 10 tokens during the period, seven of which were so-called “kimchi coins,” a colloquial term for tokens originating in South Korea or developed by Korean teams. Industry participants attribute the removals to increasingly risk-averse behavior by exchanges amid regulatory uncertainty, which can complicate promotional efforts and trust-building while constraining early-stage liquidity. TradFi players seek crypto integrationsWhile local token projects face headwinds, interest from traditional financial institutions appears to be picking up. Chosun Biz reported that Mirae Asset Financial Group is considering an acquisition of Korbit, with its non-financial affiliate Mirae Asset Consulting seen as a potential buyer of shares from major shareholders NXC and SK Planet. Industry analysts estimate the deal could be worth up to 140 billion won ($97 million). The group’s founder, Park Hyeon-joo, has said he is developing a strategy to bridge traditional and digital assets, arguing that it is time to prepare for the next wave of financial innovation. In payments, EBN Industrial News reported that BC Card has signed a memorandum of understanding (MOU) with U.S.-based crypto exchange Coinbase to test USDC payments in South Korea. The pilot would integrate BC Card’s QR payment system with wallets on Coinbase’s Base blockchain to assess whether USDC can function as a viable payment method at local merchants. 

Tongli Han, the CEO and CIO of Harvest Global, has expressed openness to the possibility of applying to offer Bitcoin and Ether exchange-traded funds (ETFs) to mainland Chinese investors through the Stock Connect program. This consideration is contingent on favorable developments in the next two years. Harvest Global, along with China Asset Management (ChinaAMC) and Bosera HashKey, recently launched Asia's first spot Bitcoin and Ether ETFs on the Hong Kong Stock Exchange, aligning with Hong Kong's ambition to establish itself as a global cryptocurrency hub. Han's remarks were delivered during the Bitcoin Asia conference in Hong Kong, underscoring the potential for expansion into the mainland Chinese market.Photo by Jimmy Chan on PexelsUncertain regulatory landscape and growth prospectsDespite the introduction of spot crypto ETFs in Hong Kong, uncertainty looms over mainland Chinese investors' access to such products through the Stock Connect program. China's regulatory stance towards the cryptocurrency industry remains stringent, with most commercial crypto activities prohibited on the mainland. While there is speculation regarding the potential inclusion of crypto ETFs in the eligible securities list of the Stock Connect program, approval remains uncertain. The debut of Hong Kong's spot crypto ETFs recorded modest trading volumes compared to their U.S. counterparts, signaling a cautious start. However, Han anticipates the potential for growth in the Asia region, envisioning the Hong Kong ETFs to potentially double the size of their U.S. counterparts. Despite differing opinions on growth prospects, market observers highlight challenges such as the relatively small size of the Hong Kong ETF market and restrictions on mainland Chinese investors' participation, underscoring the complexities facing the expansion of crypto ETFs in the region.