Asia Web3 Alliance Japan seeks collaboration with U.S. SEC

The joint virtual asset crime investigation unit of the Seoul Southern District Prosecutors' Office announced the arrest of three executives from South Korean cryptocurrency yield platform Haru Invest, according to a report by local news agency Yonhap. They are accused of embezzling cryptocurrencies valued at over 1 trillion Korean won ($750 million).Photo by niu niu on UnsplashFraud lawsuitThis development comes after approximately 100 investors filed a fraud lawsuit in June against the executives of Haru and Delio, another Korean crypto lending firm.  The three leading executives of Haru, one aged 44 and the other two aged 40, are facing fraud charges for failing to return cryptocurrencies deposited by around 16,000 customers.Misleading promotionsInvestigations uncovered that Haru Invest was offering misleading promotions for its products. Despite assurances that it utilized a risk-free, diversified investment strategy to manage user assets, Haru Invest predominantly allocated the majority of these assets towards concentrated investments from March 2020 to June 2023. Haru Invest had garnered attention from crypto investors, promising an annual return of up to 12%.  Subsequently, on June 13, Haru halted the withdrawal of digital assets without prior notice. The platform is currently in the midst of bankruptcy proceedings.  Delio, having allocated some of its assets with Haru, also came under public scrutiny that same month when it ceased withdrawals just a day following Haru's questionable action.

At the end of last month, social derivatives trading platform ZKX, a protocol that runs on the Ethereum-centric Starknet layer-2 network, shut down blindsiding the project’s stakeholders. That event has led to Singapore-headquartered digital assets firm Amber Group speaking out, calling for cryptocurrency projects to be more accountable and transparent going forward. Not economically viableNews of the project shutdown emerged when ZKX founder Eduard Jubany Tur took to X on July 30 to outline the discontinuation of the protocol. Tur claimed that the project was “unable to find an economically viable path for the protocol.” In a long-form post, the ZKX founder outlined that user engagement had been minimal, resulting in disappointing trading volumes. By extension, Tur claimed that revenues didn’t come anywhere close to covering cloud server expenses. “The market is undervaluing the work done and infrastructure built by appchains and dApps coming from ecosystems like ours,” Tur added. Pseudonymous blockchain sleuth ZachXBT had a different take on the matter, claiming that the shutdown represented a rug pull. Amber Group chimed in on the subject on X on Aug. 3. Amber suggested that it wouldn’t break any contractual non-disclosure obligations it had with regard to ZKX but that aside, the firm took the opportunity to share its perspective more broadly in an effort to promote transparency.Photo by Markus Spiske on PexelsAmber Group criticismAmber Group criticized the ZKX team on the basis of a lack of transparency. It stated: “The last update we received was on July 30, when the project announced the cessation of operations. This decision was made without prior communication, highlighting the importance of transparency in our industry.” Staying with that theme, it claimed that clear communication and transparency are essential for fostering trust and collaboration within the crypto community, and that such principles would guide future projects. Amber Group had acted as a market maker relative to the ZKX project. It borrowed and purchased ZKX tokens in support of the launch of the token and in an effort to support token liquidity post-launch. It had secured two million ZKX tokens from the open market, with its overall holding totaling three million ZKX tokens. Project investor HashKey Capital also took to the X social media platform on the subject. Like Amber Group it too criticized the ZKX project for its lack of accountability and transparency. It described the project’s reluctance to communicate as “disappointing,” while it asserted that Tur’s handling of the situation had been “regrettable.” Ye Su, founding partner at ArkStream Capital, expressed a similar complaint, stating on X that “when ZKX shut down, as investors, we got zero heads-up.” He also singled out Tur, claiming that “Edward took the money from early supporters without any communication, showing no moral standards and losing his right to future entrepreneurship in the industry.”

South Korea’s Financial Services Commission (FSC) is set to exclude stablecoins from the list of digital assets corporations will be permitted to trade under forthcoming corporate crypto trading guidelines, according to a report by Herald Business.Photo by DrawKit Illustrations on UnsplashThe guidelines will outline the conditions under which listed companies and registered professional investment firms can buy and sell digital assets for investment or treasury management purposes. As regulators move to prevent speculative or indiscriminate investment in the early stages of opening the market to corporations, they have opted to limit the scope of permitted assets. Consequently, U.S. dollar-pegged stablecoins such as USDT and USDC are expected to be excluded from the approved list. Authorities plan to release the trading guidelines after the Digital Asset Basic Act is finalized. This move partly reflects regulatory constraints: stablecoins are not currently classified as cross-border payment instruments under South Korea’s Foreign Exchange Transactions Act. The law requires payments and receipts involving such instruments to be processed through authorized foreign exchange banks, leaving stablecoins outside the regulated framework. Companies seek stablecoins for FX hedgingThis exclusion, however, does not entirely prevent companies from trading stablecoins. Firms can still access them through overseas channels, including external wallets like MetaMask or over-the-counter platforms operated by exchanges such as Coinbase. Currently, South Korean companies cannot open corporate crypto accounts domestically, making it difficult to use digital assets for formal trade settlement. Nevertheless, payments in stablecoins are sometimes still handled through individual or offshore accounts. Given these workarounds, some listed companies with large international trade exposure have petitioned regulators to allow stablecoins under the proposed corporate investment guidelines, according to people familiar with the matter. Advocates argue that stablecoins like USDC can be easily traded on exchanges and track the U.S. dollar in real time, making them a highly effective tool for managing foreign-exchange risk. As the industry awaits this regulatory clarity, the impact is already rippling into the traditional financial sector. Kbank—the banking partner of Upbit, Korea’s largest crypto exchange—recently debuted on the KOSPI benchmark index after two previously failed attempts to go public. According to Bridgenews, Korea Investment & Securities initiated coverage on March 6 with a “neutral” rating, noting that regulatory uncertainty and rising lending competition could limit the bank's near-term growth. However, the brokerage added that the lender’s valuation could improve if it successfully expands its crypto business alongside clearer regulations. Baek Doo-san, an analyst at Korea Investment & Securities, noted that Kbank’s valuation could see re-ratings if the Digital Asset Basic Act and policies promoting the stablecoin industry are implemented quickly. He said that despite potential overhang risks, faster policy progress could drive multiple expansion, adding that the bank could then be valued in line with its peers’ price-to-book ratios. Survey shows persistent market fearThese shifting regulatory sands come at a time when the broader crypto market remains under pressure. According to a weekly survey of South Korean investors conducted by CoinNess and Cratos last week, 24% of respondents expect Bitcoin to rise or surge this week, up from 10.3% in the previous survey. Another 28.1% expect the market to move sideways, compared with 25.5% a week earlier, while 47.9% predict a decline or sharp drop, down from 64.2%. Although bullish sentiment has ticked upward from the previous week, bearish expectations still dominate the overall landscape. When asked about broader market sentiment, 43.4% of respondents said they felt fearful or extremely fearful. About 35.4% described sentiment as neutral, and only 21.2% reported feeling optimistic or extremely optimistic. With safe-haven markets facing renewed uncertainty amid geopolitical tensions between the U.S. and Iran, the survey also explored how a potential correction in South Korea’s stock market might affect cryptocurrencies. The largest share of respondents, 39.7%, believed it would be negative for crypto. Meanwhile, 23.6% said it would benefit Bitcoin exclusively, 23.4% felt it would be positive for the broader crypto market, and 13.3% expected it to have no impact.