Report finds Asian nations strengthening regulatory oversight of crypto

Hong Kong Says No to Light Touch RegulationThe CEO of the Hong Kong Monetary Authority (HKMA) has said that while the autonomous territory will allow innovation to develop in the crypto space, that will not mean light touch regulation.Photo by Ruslan Bardash on UnsplashLowering guard railsAfter a three year hiatus, the Bloomberg Wealth Asia Summit returned to Hong Kong on Tuesday. Speaking at the conference, Eddie Yue, the CEO of the HKMA, Hong Kong’s regulatory body, outlined that the territory intends to enable innovation relative to crypto businesses that establish themselves in Hong Kong.“We will let the industry develop and innovate, we will let them create an ecosystem here,” he said. However, he added the following caveat: “But that doesn’t mean light touch regulation. If any participant thinks that the regulation is too tight, they’re welcome to go elsewhere.”Yue outlined that over the course of the past three years, guardrails relative to the operation of crypto-related activities were excessively high. Yue alluded to a new approach that sees those guard rails dropped to a level whereby innovation will be enabled in the digital assets space. However, he followed up by underlining the fact that the Authority has no intention of following a light touch regulatory approach.No safeguards not an optionAlthough acknowledging that Hong Kong may have been excessively crypto unfriendly relative to digital asset regulation in the recent past, he believes that Hong Kong has now got it right. “Our guardrails are lower, to a reasonable and sustainable level,” Yue said.The HKMA regulator flagged jurisdictions that provide little or no guardrails at all as the ones that will run into difficulties. “If you look elsewhere, there are no guardrails in some places, the guardrails are very low and there you see problems”, Yue clarified.He cited FTX as a stand out example of a basic lack of internal controls. FTX International was based in the Bahamas. While customers of FTX International find themselves in a difficult position, those of subsidiary companies FTX Japan and FTX Europe are having their funds returned as a direct consequence of much better regulatory safeguards in those regions.“All those wrongdoings by the platforms that we saw in the last one or two years will not happen in Hong Kong,” Yue claimed.A continuing trendWhile many commentators and critics from the conventional world have described bitcoin and crypto as a ponzi or a passing fad, Yue pointed out that digital assets are not going anywhere and that the trend towards digital assets will continue. Expanding further, he articulated that the overarching digital assets sector encompasses much more than just crypto: “Virtual assets or crypto is actually a very broad term. It’s not really about crypto, you’re talking about stablecoins or tokenized assets in the future.”A mere $0.3 trillion of illiquid real world assets have been tokenized thus far. It’s anticipated that this level of tokenization will climb to $16 trillion by 2030.

LINE NEXT Inc, a U.S.-based Web3 subsidiary of messaging app giant Line Corporation, has made a strategic partnership with ReadON, a global Web3 content provider running a “Read to Earn (R2E)” app called “ReadON DAO.” The service helps users develop routine reading habits by providing tokens as rewards. Photo by GuerrillaBuzz on UnsplashThis partnership will enable LINE NEXT to feature various digital products on its “DOSI,” a global digital commerce platform where users can freely create and trade digital items including NFTs.  In cooperation with ReadON in the marketing and business sectors, LINE NEXT plans to offer a number of innovative products to over one million users of ReadOn.  Various digital collaborative merchandise On Feb. 21, the two companies are scheduled to roll out digital collaborative merchandise inspired by “Catto,” the brand character of ReadOn, with a plan to introduce DOSI x ReadON pass tickets that benefit users of both platforms. Limited edition items offering exclusive perks and tokens that can be used on ReadOn will also soon be available for purchase. ReadOn’s previous digital items have proven to be popular: items introduced in January were sold out within just 10 seconds after they were released, with other items also selling out within 30 minutes over four consecutive days. LINE NEXT is committed to collaborating with ReadON to launch more services that can reach a broader audience. Initiative to make Web3 more accessible to the publicIn a related development, LINE NEXT launched the official web and mobile versions of DOSI in January. Under the initiative to make Web3 more accessible to the public, LINE NEXT strives to expand the range of products available on DOSI.                                                                         

During a National Policy Committee audit, South Korean lawmakers pressed financial regulators on their oversight of the domestic crypto market, focusing on Binance’s acquisition of local exchange Gopax, risks from order-book sharing with foreign platforms, and weaknesses in anti–money laundering (AML) controls.Photo by Kanchanara on UnsplashQuestions over Gopax compensationAccording to Kuki News, Democratic Party lawmaker Min Byeong-dug has urged regulators to reach out to Binance for details on its plan to compensate Gopax creditors following its acquisition of the local exchange. One of the nation’s five fiat-to-crypto exchanges, Gopax suspended withdrawals from its GoFi service, a yield-bearing product, in November 2022 after the collapse of the Bahamas-based FTX crypto exchange and the bankruptcy of Genesis, a U.S.-based crypto financial services firm. Citing investor losses estimated at 10 billion to 50 billion won (about $7 million–$35 million), Min said Binance had agreed to cover the shortfall as part of its cashless acquisition of Gopax, but full repayment to Korean users remains unresolved. He noted that the deal had faced delays due to concerns raised by the Financial Services Commission’s (FSC) Financial Intelligence Unit (FIU) over Binance’s eligibility as a major shareholder, and urged the FSC and FIU to ensure a clear and timely resolution for affected investors. Concerns over order-book sharingPeople Power Party (PPP) lawmaker Lee Heon-seung raised additional concerns about order-book sharing tied to the Binance–Gopax deal, warning it could create regulatory blind spots. According to Dailian, he asked the FIU about risks such as possible gaps in AML oversight at foreign exchanges and the potential exposure of Korean user data. FIU head Park Gwang said inadequate AML systems at overseas platforms can hinder fund tracing. He noted that separate approval is required before a domestic exchange can share its order book with a foreign platform, adding that no such request was under discussion. Park said the FIU would closely examine the matter and ensure protection of personal data. Lee also questioned how effectively regulators can supervise the crypto market given its scale, pointing to the Bithumb exchange as an example, where he had raised similar concerns about order-book sharing. Bithumb serves about 3.8 million users and records roughly 605 trillion won (approximately $426 billion) in annual trading volume. He said order-book sharing with major global exchanges such as Binance could complicate AML compliance, data protection, and regulatory oversight, and called for stronger enforcement. In response, Park said that the agency would ensure proper supervision to address these risks. Allegations of AML loopholes and illicit useAnother PPP lawmaker, Kim Jae-sub, flagged a potential AML loophole involving Binance, saying the exchange had allegedly been used by Cambodia’s Prince Group, which is linked to fraudulent schemes to conceal illicit funds. Last week, the U.S. Department of Justice filed a civil forfeiture complaint to seize roughly 127,271 Bitcoin linked to Prince Group’s operations, marking the largest seizure in its history. Kim also cited past allegations connecting Binance to illicit transactions involving Hamas and North Korea, and said the exchange’s founder faces related charges. He urged the FSC to conduct a thorough examination to determine the extent of any involvement if the claims prove accurate. As the parliamentary audit continues, lawmakers from both parties are pressing regulators to clarify standards, tighten oversight, and prioritize investor protection while maintaining fair and predictable rules for market participants.