$9M funding round to enhance liquidity at Woo X

Compliance and Cooperation — A Necessary Formula for Combatting Crypto CrimesFrom common scams like voice phishing to threats of violence, the involvement of cryptocurrencies in crimes against the general public is steadily on the rise both in South Korea and abroad.Photo by Bermix Studio on UnsplashAccording to blockchain data analysis firm Chainalysis, the scale of cryptocurrency-related crimes and hacking on a global scale has decreased by 45.2% and 23.5%, respectively, compared to last year. However, financial losses resulting from smaller ransomware attacks, including phishing scams, are showing an upward trend.Authorities and industry figures alike are increasingly emphasizing the need for close cooperation to combat this growing issue, as existing regulations and legal frameworks remain insufficient to do so.Chainalysis and crypto exchange Binance co-hosted a policy summit in Seoul on Tuesday called “Securing the Future of Crypto,” where experts gathered at the Courtyard Marriott hotel to discuss compliance and cooperation between the public and private sectors in fighting crypto crimes.Challenges and complexities in crypto investigations“The Korean National Police Agency receives dozens of reports of financial losses and urgent requests for account freezes every day, with 80% of them pertaining to Binance,” said Kim Min-jae, an investigator at the National Police Agency’s International Cyber Cooperation Division.Citing a recent case of a voice phishing scam targeting a woman in her 60s, Kim said that authorities were able to proceed with the investigation within 30 minutes after receiving information from the exchange. However, addressing crimes beyond large cryptocurrency exchanges like Binance, such as those involving decentralized finance (DeFi) systems or foreign exchanges, poses a more difficult challenge due to the lack of proper measures to deal with them.Lee Soo-pyeong, a cybercrime investigator at the Korean National Police Agency’s Cyber Investigation Division, also noted that although domestic cases are relatively easier to investigate, there have been many cases — such as the appalling Nth Room case that caused an uproar throughout Korea in 2020 — that involved overseas accounts and exchanges.Steps for effective crime controlWhat measures, then, should authorities and corporations take in order to deal with such issues? Lee stressed the importance of cooperation among international judicial bodies and adherence from businesses to enhance the response to increasingly sophisticated crypto crimes.Know Your Customer (KYC) standards — the guidelines used in investment and financial services to verify customers’ identities and assess their risk and financial profiles — play an important role in this regard. However, “There are no platforms yet, including major exchanges like Binance, that provide us with personal information through KYC measures when funds are laundered,” Kim explained. He expressed hopes for a system jointly established by relevant entities, including local exchanges, that will enable swift criminal investigation.Lee also highlighted the importance of compliance from foreign companies, stating, “While it’s possible to request mutual legal assistance in criminal matters from the International Criminal Police Organization (Interpol), active cooperation from foreign companies is essential.”From an international point of view, Jarek Jakubcek, Head of Intelligence and Investigations APAC at Binance, pointed out that upholding international standards and standardized processes is important, given the fact that crypto crimes transcend borders. While some countries excel in compliance and enforcing anti-money laundering (AML) policies, others fall short, leading criminals to exploit these disparities.Recently, there have been criminals who move their funds through blockchain networks. The development of bridge technology, which facilitates cross-chain asset transfers, has led to laundering techniques becoming more and more sophisticated. However, he assured that tracing funds is still possible, although doing so has become harder than before.The amalgamation of these circumstances has thereby ushered in the era of Know Your Transaction (KYT). While exchanges have traditionally been obligated to perform Know Your Customer (KYC) procedures to prevent money laundering, they must now go beyond verifying user information and analyze customer transaction data in order to understand where money is coming from and how it flows, Jakubcek said. To achieve this, he argued, they must request information from users and work with on-chain data analysis solution companies like Chainalysis to secure real transaction data. Alec Zebrick, Manager of Investigations in the Asia-Pacific region at Chainalysis, added that leveraging on-chain data allows the verification of most transactions.In the rapidly evolving crypto landscape where crimes are still a force to deal with, experts agree that reinforcing compliance and cooperation between exchanges and authorities is imperative.

The U.S. Department of Justice has filed a civil complaint to seize roughly 127,271 Bitcoin linked to an alleged fraud scheme tied to Prince Group, a multinational conglomerate based in Cambodia. That’s according to a press release from the U.S. Attorney’s Office for the Eastern District of New York. The digital assets are currently valued at approximately $14.18 billion and are now in the custody of the U.S. government. Prince Group chairman Chen Zhi, now indicted by U.S. authorities, has been named as the mastermind behind the operation. FBI Assistant Director in Charge Christopher Raia said Chen oversaw an international crypto investment scam connected to a labor trafficking network that defrauded thousands of victims worldwide.Photo by Kanchanara on UnsplashOperations across 30 nationsSince 2015, Chen Zhi has headed the Prince Group, which operates in more than 30 countries. Under his direction, the group allegedly established scam compounds across Cambodia that promoted fraudulent crypto investment scams. The operations targeted victims through social media and messaging platforms with false promises of high returns. According to the allegations, funds were stolen and laundered rather than invested, and perpetrators often built trust over time before carrying out the fraud. Authorities in Vietnam have uncovered a comparable case that did not involve the seizure of cryptocurrency. According to Tech in Asia, Hanoi police confiscated assets worth $34 million from Nguyen Hoa Binh, chairman of the tech company NextTech. The seized property includes 597 gold bars, deeds to 18 properties, and two vehicles. Investigators allege that Binh and nine associates raised funds for the AntEx cryptocurrency project by selling 33.2 billion tokens to 30,000 investors in 2021, collecting around $4.5 million. The defendants are said to have taken part in fraudulent appropriation of assets and accounting violations. Tepid business climate in VietnamThese incidents come as Vietnam’s government works to define its stance on digital assets. According to a Cointelegraph report published earlier this month, the Vietnamese Ministry of Finance said that since the announcement of the country’s five-year digital asset trading pilot plan, no companies have applied to participate. Sharing this update, the vice minister of finance expressed hope that this pilot would launch before 2026. The report points to strict requirements as a likely reason for hesitation. Licensed crypto asset service providers must hold at least 10 trillion dong, about $379 million, in capital. They are also required to back all digital assets with real and tangible assets only, and the framework explicitly prohibits using fiat currencies or securities as backing. These rules leave few options that would attract retail or institutional investors. Gemini eyes Southeast Asia as adoption growsMeanwhile, global firms continue to look to Southeast Asia as activity increases. Dow Jones Newswires reported that Gemini, the American crypto platform founded by the Winklevoss brothers, plans to expand its footprint across the region. In an interview, Saad Ahmed, Gemini’s head of Asia Pacific (APAC), said the company was strengthening its regional operations. A Chainalysis study provides context, showing that the APAC region recorded the fastest growth in on-chain activity compared to other markets in the 12 months ended June. The region saw total crypto transactions rise to $2.36 trillion from $1.4 trillion a year earlier. Although Ahmed did not share investment figures, he said Gemini’s Singapore headquarters has grown to about 65 employees, up from 15 in the final quarter of 2023. He added that the expansion reflects the company’s view of Singapore as a key base for its operations in Asia and globally. Recent criminal discoveries and tightening regulations reveal how Southeast Asia’s crypto scene remains nascent. Governments are stepping up enforcement and shaping new frameworks even as global firms expand across the region, motivated by growing adoption. How policymakers and market players respond to these early tests will define the next phase of digital asset growth in Asia. 

Having introduced its swift licensing process late last year, Hong Kong's Securities and Futures Commission (SFC) has extended access to the process to all new virtual asset trading platform (VATP) applicants. In a statement published on its website on Jan. 16, the regulator outlined that it is extending the swift licensing process to new applicants. Back in December, the SFC approved licensing relative to four exchanges under the expedited process. Those additions included Accumulus GBA Technology Co., DFX Labs Company, Hong Kong Digital Asset EX and Thousand Whales Technology (BVI).Photo by Ruslan Bardash on UnsplashSeven licensed VATPsThat has brought the total number of licensed exchanges to seven, as HashKey, OSL and HKVAX were the first exchanges to be approved. In November, fifteen licensing applications relative to virtual asset platforms, had been pending. According to SFC CEO Julia Leung, the regulator had hoped to issue licenses to eleven VATPs by the end of 2024.  The new expedited process requires applicants to “implement their policies, procedures, systems and controls before conducting an external assessment on these measures.” The regulator decided to extend the swift licensing process due to the effectiveness of the SFC’s engagement with other applicants, relative to the regulatory standards being put in place, implemented through on-site inspections being carried out. Fostering a healthy ecosystem Commenting on the development, Dr. Eric Yip, the SFC’s Executive Director of Intermediaries, stated:“The SFC is committed to fostering a healthy ecosystem and a robust regulatory framework for the development of virtual assets in Hong Kong. With the new approach, we will enhance our collaboration with VATP applicants, providing them with constructive and timely feedback, thereby enabling fully compliant VATPs to bring their services to investors more swiftly.” While the regulator is awarding licensing on an expedited basis through the swift licensing process, licensing is conditional. The VATP can operate on a restricted scope of business once it has completed rectification actions following feedback provided by SFC inspectors.  In October Yip outlined the SFC’s plans to create a consultative panel consisting of senior management executives from licensed VATPs. The objective of the panel is to gather feedback and concerns from licensees, adjusting the regulatory framework where deemed appropriate, relative to that feedback. Commenting on the initial introduction of the expedited approval system last December, Yip stated: “We have been proactively engaging with VATPs’ senior management and ultimate controllers, which helps drive home our expected regulatory standards and expedite our licensing process for VATPs. We aim to strike a balance between safeguarding the interests of investors and facilitating continuous development for the virtual asset ecosystem in Hong Kong.” The Hong Kong government has also been working towards incorporating a stablecoin bill, which will establish a regulatory framework with regard to fiat-referenced stablecoins. The SFC also intends to introduce licensing for crypto custodians in 2025.