India’s SEBI head wants instant settlement to counter crypto threat

Korea’s Intragovernment Group Launched to Thwart Crypto-Related CrimesThe South Korean government has taken a significant step today in combating cryptocurrency crimes with the launch of a dedicated intragovernmental division. The newly established joint crypto-crime investigation division operates under the Seoul Southern District Prosecutors’ Office and comprises 30 skilled investigators from seven different government agencies.Photo by Daniel Bernard on UnsplashMulti-agency collaborationThese agencies are the Public Prosecutors’ Office, the Financial Supervisory Service (FSS), the Korea Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC), the National Tax Service (NTS), the Korea Customs Service (KCS), Korea Deposit Insurance Corporation (KDIC), and Korea Exchange (KRX).The growth of the domestic crypto market in South Korea has been remarkable since the advent of cryptocurrency exchanges in 2014, attracting approximately 6.27 million individuals and reaching a valuation of 19 trillion KRW ($14.9 billion). Daily average trading volumes have surged to three trillion KRW, involving participants from various age groups, with individuals in their 30s and 40s constituting the largest share.Regulatory absenceHowever, the absence of adequate regulations has exposed customers to unfair practices in virtual asset trading. Although the recent passage of the Virtual Asset User Protection Bill at the National Assembly is encouraging, implementing comprehensive policies to safeguard crypto investors will take a significant amount of time.The risks associated with virtual asset investments are highlighted by the frequent delisting of cryptocurrencies from the nation’s top five exchanges. In the past two years, 1,053 cryptos have been delisted, and an additional 1,010 have been flagged as risky. The prevalence of unstable cryptocurrencies has resulted in high price volatility, incurring losses for investors. This volatile environment has also given rise to various crypto-related crimes, including unlawful listings, market manipulation, illegal foreign exchange trading, and pyramid schemes.Two teamsTo address these challenges, the joint crypto-crime investigation division is structured with two teams. The research and analysis team will study virtual asset issuers and distributors, identifying suspicious transactions. Virtual assets found to be fraudulent will be reported to the investigation team, which will then conduct thorough investigations and pursue legal action against problematic projects, while also recommending regulatory enhancements. Profits obtained through illegal means will be confiscated by the Seoul Southern District Prosecutors’ Office.The division’s main focus lies on virtual assets that have been rapidly delisted, those marked as risky, and those exhibiting significant price volatility. Committed to upholding fairness and transparency in the crypto industry, the joint crypto-crime investigation division will strive to protect market participants and make valuable contributions to the Korean economy.

HashKey Enhances User Security with Exchange Insurance PartnershipHong Kong-based cryptocurrency exchange HashKey has taken a step towards bolstering its users’ security by signing a memorandum of understanding (MOU) with fintech firm OneDegree to provide insurance coverage for digital assets held on the platform.Photo by Manson Yim on UnsplashIndustry-wide significanceThat’s according to a report in local news media on Wednesday. The move represents a positive development not only for HashKey users, as it extends protection to both hot wallets and cold storage addresses, but for the overall crypto space.After the trail of destruction left by a series of high-profile crypto collapses in 2022, the overarching crypto space has been crying out for adequate solutions that reassure crypto market participants that their funds are safe when placed on centralized crypto platforms. In the traditional banking world, in most jurisdictions there are insurance-based schemes that guarantee a certain percentage or level of depositors funds. In many cases, these schemes are backed by the central government.Asian crypto market participants have been hit harder than most due to these collapses having nothing in place in terms of deposit safeguards. In Singapore, crypto lenders Vauld and Hodlnaut failed, leaving deposit shortfalls. The city-state’s residents were particularly hard hit when it came to FTX as many Singaporeans had opted to use the exchange given that the authorities had banned Binance from trading there.Xiaoqi Weng, the Chief Operating Officer of HashKey, emphasized the company’s commitment to fortifying its financial, technical, and service infrastructure to offer customers comprehensive protection. The goal is not only to enhance user security but also to contribute to the overall development of Hong Kong’s digital asset ecosystem.Mitigating riskYanlin Guo, Co-founder of OneDegree, underscored the importance of establishing a robust framework for cryptocurrencies that includes insurance to identify and mitigate potential risks effectively. This collaboration between HashKey and OneDegree aims to provide added peace of mind to cryptocurrency investors who entrust their assets to the exchange.HashKey achieved a significant milestone on August 3 when it became the first cryptocurrency exchange to receive regulatory licensing from the Hong Kong Securities and Futures Commission, enabling it to offer services to retail investors. Subsequently, on August 28, the exchange launched its trading services, albeit with relatively low trading volumes.Currently, HashKey Hong Kong supports the trading of Bitcoin and Ethereum, with no options for margin trading or cryptocurrency derivatives. Nevertheless, the exchange accepts fiat deposits in both US dollars and Hong Kong dollars from authorized financial institutions worldwide.The issue of user insurance has been a contentious topic in the cryptocurrency industry, with various exchanges offering different levels of protection. Some exchanges provide no insurance beyond a contractual claim to users’ assets in the event of bankruptcy. Others offer insurance solely for fiat deposits, while a select few, such as Binance and Bitget, extend coverage to crypto-related incidents.HashKey has answered a market need by integrating this insurance product into its trading service. It’s likely that other platforms will follow suit in the not-too-distant future.

CoinFund expands its reach into AsiaCoinFund, a New York-based venture capital firm specializing in the cryptocurrency ecosystem, is strategically expanding its presence in Asia, with Hong Kong as its first destination.The move comes amid regulatory uncertainties in the United States, prompting some crypto companies to explore more favorable environments. CoinFund’s decision is bolstered by Hong Kong’s recent implementation of a regulatory framework for virtual assets and its commitment to attracting virtual asset businesses.Photo by Florian Wehde on UnsplashHiring in Hong KongIt emerged earlier this month that the U.S. company had hired Dmitry Lapidus as its Senior Liquid Analyst based in Hong Kong. The move has highlighted the increasing trend of capital flowing out of the United States, particularly towards Asia.In an interview with the South China Morning Post (SCMP) last week, Lapidus expressed the firm’s goal to tap into the growing crypto trading activities and the burgeoning community of crypto entrepreneurs in the region. CoinFund, established eight years ago, sees Asia as a key market for expansion. Lapidus stated:“If you look at the history of how this industry has evolved, there has always been very active participation from Hong Kong and China, in particular in the early days” . . . “So I almost view it as one of the more natural places for innovation and for experimentation.”Asian opportunity amid U.S. difficultiesThe regulatory landscape in the United States has been a source of frustration for crypto firms, facing challenges due to a lack of clear cryptocurrency regulations and increased enforcement actions by authorities. To underscore the adversarial regulatory environment further, it emerged on Monday that the Securities and Exchange Commission (SEC) is suing crypto platform Kraken for the second time, having agreed to a $30 million settlement with the company back in February.Taking to the X platform, Kraken Founder Jesse Powell stated:”Message is clear: $30m buys you about 10 months before the SEC comes around to extort you again. Lawyers can do a lot with $30m but the SEC knows that a real fight will likely cost $100m+, and valuable time. If you can’t afford it, get your crypto company out of the US warzone.”CoinFund’s move to Hong Kong follows a broader trend, with other U.S.-based crypto VC firms, such as Hivemind Capital Partners, also expanding their operations to the region.Hong Kong’s commitment to embracing the cryptocurrency sector has been evident in its policies, including the implementation of a mandatory licensing regime for centralized exchanges, enabling them to cater to retail investors. The city’s proactive approach contrasts with the regulatory uncertainty in the U.S., making it an attractive destination for crypto businesses seeking a more favorable environment.CoinFund Founder Jake Brukhman highlighted the importance of the Asian market in a recent blog post. Brukhman confirmed that 45% of the startup founders the firm backs are headquartered outside the United States. Against that backdrop, Brukhman said, “We’re both inspired by the energy in the Asian market and responsible for interpreting these opportunities for our portfolio.”While the broader crypto investment landscape has seen a decline, with a 28% quarter-over-quarter drop in investment in the third quarter of this year, CoinFund stands out. In July, the firm successfully raised $158 million for a new fund dedicated to supporting early-stage crypto startups.