Korea’s daily crypto trading volume surpasses that of stocks at nearly $9B

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.

Terraform Labs Co-Founder Indicted in South KoreaTen individuals linked to the Terra USD collapse have been indicted in South Korea on charges associated with violations of capital markets law, including the Co-Founder of Terraform Labs, Daniel Shin. That’s according to a report published by Bloomberg on Tuesday.©Pexels/Donald TongTwo of the ten were charged with breach of trust while the remaining eight, including Shin, were charged with illegal trading. Prosecutors confirmed that all of the charged individuals have ties to Terraform Labs, the company responsible for developing the Terra protocol, and the Terra USD (TUSD) stablecoin and Luna cryptocurrency which collapsed in 2022.It’s understood that the ten individuals were also accused of illegal disclosure of clients’ payment information and the embezzlement of corporate funds. The authorities have claimed that the ten individuals are responsible for causing “astronomical damage” to investors. They estimate that all ten of them took 463 billion won, around $347 million, in profit.Business interestsShin co-founded Terraform Labs with Do Kwon in 2018. He left the project in 2020, long before its spectacular failure in 2022. However, he would have profited considerably from the project. Prior to co-founding Terraform Labs, Shin had founded lifestyle commerce company TMON in 2010. Two years later, he founded venture capital and private equity firm, Fast Track Asia while in 2017 he was a founding partner of another venture capital and private equity firm, Bass Investment.He remains involved in all of those other businesses. Furthermore, Shin founded integrated payments firm PortOne Global in January 2020, immediately upon exiting Terraform Labs. He remains CEO of PortOne Global today.$185 million frozenOn Tuesday, the Seoul Southern District Prosecutor’s Office outlined that it had frozen assets to the value of 246.8 billion won, approximately $185 million, belonging to those that it has brought charges against. South Korean authorities had previously acknowledged a difficulty in seizing assets related to Terraform Labs Co-Founder Do Kwon. It’s understood that a transfer of funds from Do Kwon to a prominent South Korean law firm is being investigated. Otherwise, the search for funds has led them overseas where it’s understood that Do Kwon purchased real estate in his mother’s name in the United States in a bid to evade asset confiscation.Free pending trialShin remains at liberty pending trial. Back in December, a South Korean court turned down a request to arrest him on the basis that he wasn’t likely to destroy evidence and wouldn’t pose a flight risk.That hasn’t proven to be the case where his former colleague Do Kwon is concerned. Do Kwon fled to Montenegro where he was recently charged with having entered the country on false documents. Both South Korea and the United States have formally applied for his extradition. In the United States, the Securities and Exchange Commission (SEC) has sued both Do Kwon and Terraform Labs. Terraform Labs subsequently submitted a request to the courts in the US to dismiss the lawsuit, claiming the SEC lacks jurisdiction.

South Korea to Revive Tech Exports with Metaverse, BlockchainThe South Korean Ministry of Science and ICT revealed today a strategy to enhance the country’s tech exports. The plan includes leveraging the potential of the metaverse and blockchain as promising export items.Photo by Pixabay on PexelsEmphasis on the digital sectorIn response to the recent decline in exports, the strategy seeks to establish new sources of growth by prioritizing the digital sector, which has historically been a key driver of Korea’s exports. Recognizing the complex challenge posed by the global economic slowdown and other factors, all government ministries are collaborating to counteract the export slowdown.The plan leverages South Korea’s digital capabilities and implements proactive measures to adapt to evolving export trends, including the recent advancement of generative artificial intelligence (AI) tools and the acceleration of digital transformation. By tapping into emerging markets and nurturing innovative companies, the government strives to diversify its export portfolio and strengthen its position in the global market.Despite achieving a record high of $248.8 billion in tech exports in 2022, Korea has faced year-on-year declines since July 2022 due to the global economic downturn. The semiconductor sector, which accounts for more than half of the nation’s tech exports, has been particularly sluggish. Nevertheless, the rise of new tech markets driven by significant technological advancements, such as ChatGPT, and the global push for digital transformation offer opportunities to overcome the current export slump.Emerging marketsAgainst this backdrop, the government is committed to backing the development of products that resonate with the evolving export landscape. It is eyeing emerging markets, notably the Middle East, Southeast Asia, and Latin America, recognizing their fertile grounds for the swift adoption of evolving tech trends, fueled by their substantial youth populations. Furthermore, the government plans to provide policy-level support to tech companies.Government supportUnder this plan, the government will identify promising companies and offer assistance, including consultation and guidance on product commercialization. It will also support metaverse companies participating in overseas projects by covering localization development costs.In the blockchain field, comprehensive support, including technology verification, consulting, and marketing, will be provided to those working towards international standardization for NFTs and their overseas commercialization.As part of this initiative, exhibition rooms will be established on metaverse platforms like ZEPETO and IFLAND in September. These platforms will provide opportunities for innovative firms to showcase their products. At the same time, the plan will facilitate interaction between Korean companies and overseas buyers through online and offline events to boost exports.