Korean financial authority to heighten oversight on token listing with new guidelines

Busan to Merge Blockchain and Coffee through Smart Logistics PlatformThe Korean southern port city of Busan and its regional institution for industrial innovation, Busan Techno Park, announced that they will begin developing a collaborative platform that facilitates smart logistics in the local coffee industry through the use of blockchain technology. The project is aimed at enhancing transparency and trust in the industry by tracking the entire logistics process — from the importation of raw coffee beans through Busan Port to distribution to businesses, then purchase by consumers.Photo by Theo Crazzolara on UnsplashTracking production and flavor profilingThe platform will use artificial intelligence (AI) technology to track the distribution of coffee beans as well as objectively analyze various types of coffee to arrange flavor profiles based on factors such as weather, storage conditions, and the environment. This would eliminate any room for subjective opinions that are usually associated with taste evaluation.“This project aims to develop blockchain technology that can be used to trace the background of coffee beans starting from their country of origin,” said Kim Hyung-kyun, Director of Busan Techno Park. Blockchain technology’s strength lies in its ability to solve the problem of a lack of transparency between coffee producers and consumers.The platform was selected in April as a technology commercialization initiative under the Korean Ministry of Science and ICT’s 2023 Special R&D Zone Development Project. It is set to receive a total of KRW 11.8 billion (approximately $8.9 million) in governmental, private, and municipal funding until December 2025.Fostering transparency and securing a competitive edgeA ceremony was held at the Asti Hotel in Busan on Tuesday to kickstart the project and form the Busan R&D Innovation Valley Committee — consisting of two subcommittees dedicated to distribution and technology, respectively — to carry out the initiative.“It will be possible to manage data on changes in ingredients and quality due to storage conditions and duration. This will give sellers a competitive advantage and allow consumers to enjoy better-quality coffee at reasonable prices,” explained Oh Dong-joon, who is in charge of the distribution subcommittee.After the platform has been developed over the next three years, it will be available for coffee businesses and startup entrepreneurs in Busan. “In the case of specialty coffee, traceability and transparency are important. When the platform is established, it will be a significant help in verifying objective data related to problems that may occur during the import and storage of coffee beans,” remarked Jeon Joo-yeon, CEO of Busan-based specialty coffee brand Momos Coffee.Jung Yo-han, leader of the business mining division under the project’s technology subcommittee, added that consumers will be able to buy coffee that they can trust after it has been traced through the distribution process. The city will also be able to stimulate startups by leveraging blockchain technology and take advantage of the project’s scalability by applying it to all agricultural and marine products that are imported through Busan Port.

Hong Kong to Issue Digital Asset Licensing Guidelines in MayAccording to Hong Kong’s Securities and Futures Commission (SFC), the Commission will issue new guidelines for virtual asset exchanges within the Chinese autonomous special administrative region (SAR).© Pexels/Jimmy ChanSFC CEO Julia Leung made that announcement while speaking at an event in the city on Thursday, indicating that the guidelines are due to be released next month. Additionally the autonomous region intends to introduce a new licensing system from June 1 onwards, enabling the retail investors among Hong Kong’s populace to trade leading cryptocurrencies like Bitcoin and Ethereum.Hong Kong authorities had provided an insight into this approach back in February, when plans to provide retail access to digital assets were first set out. At the time, they outlined the need for retail customers to pass a knowledge test relative to digital assets or otherwise only being allowed to trade such assets once the customer had completed a certain level of training relative to digital assets, provided by a regulated crypto service provider.This latest announcement has arrived amid a backdrop of a series of recent indications that signify the intent of authorities in Hong Kong to make the autonomous region a major financial hub centered around digital assets.Leung articulated that the further development of this digital assets framework follows a consultation process that attracted more than 150 responses. Although virtual asset service providers (VASPs) will need to await the complete rollout of the licensing system, a handful of crypto businesses such as OSL and Hashkey, under the supervision of the Hong Kong regulator, have already started to offer their services.Crypto as propertyA Hong Kong court recently recognized cryptocurrency as property. The ruling emerged in a bankruptcy hearing pertaining to failed cryptocurrency exchange Gatecoin. In presiding over the case, Justice Linda Chan outlined that the autonomous region takes a broad view of what constitutes property. In finding crypto to meet the definition of property, she went on to clarify that it therefore has the capability of being held in trust.The finding has particular relevance in the crypto world right now given the consequences of an “in trust” custodianship of customer’s digital assets relative to numerous ongoing bankruptcy processes involving failed crypto businesses, and the pecking order of creditors in those instances, in their efforts to recover their digital assets.Positive approachWhile mainland China remains an adverse territory relative to digital assets, Hong Kong has taken to welcoming the sector and with that, enticing crypto firms to relocate to the autonomous region from the mainland. Leadership in the city has been making all the right soundings to demonstrate that it is actively trying to nurture the nascent sector.While recent months have seen the Biden administration in the United States attempt to close off banking from the crypto sector, in contrast, Hong Kong’s largest virtual bank, ZA Bank, was recently given permission to act as a settlement bank for regulated Web3 businesses located within Hong Kong.

Hong Kong Reiterates Web3 Credentials and CommitmentHong Kong is committed to growing the Web3 industry under appropriate regulations, according to government officials.©Pexels/Andrea PiacquadioAt the four-day Web3 Festival, which is the largest Web3 event that the city has hosted since declaring its intention last year to become a digital asset hub, Financial Secretary Paul Chan stated that the stability of the financial system and investor protection should not be damaged, and that appropriate regulations are a must to create a sustainable development environment and a more ideal space for development.DeFi licensing requirementSome attendees were surprised to learn that the Securities and Futures Commission (SFC) believes that decentralized finance (DeFi) platforms for virtual assets need a license under existing rules. Keith Choy, interim head of the intermediaries division at the SFC, stated that people operating or performing DeFi activities should be subject to Hong Kong’s licensing requirements.This means that if Hong Kong really intends to regulate DeFi, it will have a stricter environment than Singapore. The Web3 industry has been closely watching the development of a new regulatory framework for virtual assets in Hong Kong since the city revealed at the end of October its intention to become a cryptocurrency hub. Under new regulations that go into effect in June, cryptocurrency exchanges serving customers in Hong Kong must be licensed by the SFC.10,000 Web3 Festival attendeesThe event attracted more than 10,000 people ahead of the conference, with several big-name speakers and exhibitors looking for new opportunities in the city. OKX and Filecoin were some of the large cryptocurrency firms in attendance, as were traditional tech firms like Tencent Cloud, which had a booth touting its blockchain-related services for corporate clients. Alibaba Cloud was also a co-organiser, along with Amazon Web Services and Hong Kong’s Cyberport.Binance co-founder and CEO Zhao Changpeng (CZ) also dialed in via video for a fireside chat. Last month, the US Commodity Futures Trading Commission (CFTC) sued CZ and Binance over what it alleged was “sham” compliance with domestic regulations. The company has been scrutinized over connections to its local firm Binance.US, which legally is meant to operate as a separate entity. Zhao was not asked and did not address his legal troubles at the conference. However, he did note that Binance is in talks with regulators in many markets.“We are actively engaged with regulators all around the world,” Zhao said. “Many of them are very receptive, some of them are still skeptical, and that’s fine, but we need to engage. We need to have dialogue, we need conversations, and we also need patience.”Singapore comparisonsHong Kong has frequently been compared with Singapore, which had been considered a friendlier market for related activity until Hong Kong’s policy shift. Some attendees had hoped that Hong Kong’s shift would provide some competition for Singapore in the region. “We did see a very obvious trend of people flying to Singapore to make sure their business was part of this space,” said Luke Liu, chief core ecosystem contributor at cross-chain protocol developer Poly Network. “Hong Kong and Singapore can coexist in some sense, but there is definitely a very positive change going on recently because of the Hong Kong policy announcement.”Hong Kong has reaffirmed its commitment to growing the Web3 industry under “appropriate” regulations, with the stability of the financial system and investor protection as a top priority. This has been reiterated during the largest Web3 event in the city since declaring its intention to become a digital asset hub.