Shanghai launches international digital yuan hub to boost global use

Korea to Tighten Scrutiny of Crypto Exchange Shareholders Amid Rising ConcernsSouth Korea’s financial regulator is stepping up efforts to evaluate the qualifications of majority shareholders of cryptocurrency exchanges, according to a report by local news outlet Newsis. This initiative follows instances where majority shareholders of local exchanges, including Bithumb, found themselves embroiled in criminal proceedings. Drawing parallels with the banking sector, the regulator is scrutinizing the credentials of majority shareholders to ensure compliance and integrity within the cryptocurrency exchange landscape.Photo by Terrence Low on UnsplashRevamping reporting requirementsThe Financial Intelligence Unit (FIU) under the Financial Services Commission recently set up a task force to revamp the reporting requirements for crypto exchanges.The upcoming requirements are anticipated to be integrated into the reporting forms that cryptocurrency exchanges must complete, starting in October of next year. Essentially, these stipulations will determine whether existing exchanges, such as Upbit, Bithumb, and Coinone, can sustain their operations in the future.Periodic evaluationAccording to the Enforcement Decree of the Financial Transaction Reports Act, all virtual asset service providers (VASPs), including exchanges, are mandated to submit a renewal report every three years. Upbit, having been the first to submit its initial report in October 2021, will join other crypto exchanges in updating their reports in October 2024.A majority shareholder qualification assessment is a process in which the government periodically checks whether majority shareholders have the necessary qualifications to operate a financial company. Through this process, the FIU aims to curb potential illicit activities by majority shareholders, who hold significant sway over cryptocurrency exchange operations, thereby mitigating any potential harm to the users.Regulatory grey areaThis measure emerged from concerns that majority shareholders of exchanges have existed in a regulatory grey area. In fact, under the Financial Transaction Reports Act, only exchange representatives and registered officers are required to report and undergo examination when declaring VASPs. This leaves the actual owners and controllers — the majority shareholders — unidentified and unexamined.The current circumstances involving VASPs are markedly different and more concerning compared to other financial sectors. In the banking sector, restrictions are placed on share ownership and voting rights if majority shareholders have breached financial laws or if they are capital entities forbidden from owning a bank. Similarly, online peer-to-peer lenders and large lenders are also under obligation to have their majority shareholders scrutinized, as they fall under analogous regulations.Fraud and manipulation allegationsThe heightened scrutiny is also thought to have been sparked by recent allegations of fraud and market manipulation involving some majority shareholders of Korean exchanges. For instance, Mr. Kang Jong-hyun, a majority shareholder of Bithumb, is currently facing a criminal trial for allegations of fraudulent and unfair trade activities under the Capital Markets Act. Additionally, Song Chi-hyung, the majority shareholder of Upbit and chairman of Dunamu, is facing a Supreme Court trial over alleged price manipulation through wash trading.Moves to amend legislationMeanwhile, efforts are underway in the National Assembly to amend the existing legislation. Yun Chang-hyun, a lawmaker from the ruling People Power Party and a member of the National Policy Committee, has recently proposed a bill to revise the Financial Transaction Reports Act. The amendment seeks to implement a majority shareholder screening system for VASPs.The proposed amendments would obligate VASPs, including crypto exchanges, to disclose information about their majority shareholders in their reports, thereby enabling the FIU to scrutinize any past financial crimes or economic offenses committed by these majority shareholders.

Coinbit suspends operations, marking second crypto exchange shutdown this monthCoinbit, a South Korean cryptocurrency exchange operated by blockchain service provider AXIASOFT, has suspended its services according to an official announcement on its website posted on Thursday (local time). This development comes just over a year after it became a virtual asset service provider (VASP) on Sept. 1 last year. It is also the second crypto exchange in the country that has ended its operations after Cashierest on Nov. 6, indicating that troubled predictions previously projected by industry sources are becoming a reality.Photo by Andrew Winkler on UnsplashBusiness transitionCoinbit explained that, despite its efforts to create an environment optimized for transparent crypto transactions, it was pushed by ongoing changes in regulatory policies to make changes to its business. It intends to shift its focus to establishing a securitized transaction system.Membership registration and deposits will no longer be allowed starting at 5 p.m. next Friday. Transactions and withdrawal services will be suspended from 1 p.m. on Dec. 29. The exchange advised its users to withdraw their virtual assets accordingly.Earlier, it was reported that Coinbit was facing difficulties maintaining smooth operations due to its exceedingly low trading volume. Industry sources believe that the realization of the previously speculated closure of coin market exchanges.More shutdowns to come?“Much of the workforce at crypto exchanges have been taking hits, leading to challenging business conditions,” stated an unnamed industry expert, proposing conjecture that more announcements of service suspensions may be imminent. According to a survey conducted earlier this year by the Financial Intelligence Unit (FIU), 10 out of 21 crypto exchanges reported zero revenue from transaction fees, and 18 were in a state of complete capital impairment.

ONEUNIVERSE Holds Second NFT Sale for Champions ArenaSouth Korean metaverse developer ONEUNIVERSE said Wednesday it is holding its second sale of non-fungible tokens (NFTs) in celebration of the upcoming release of its newest AAA Web3 game, Champions Arena.Photo by Stefan Gall on UnsplashFueling earningsThe NFTs, called Champion NFTs, will play a pivotal role in boosting the core Play-to-Earn (P2E) feature of the game. Players must possess Champion NFTs in order to earn victory points, or VPs, within the game’s central hub called the Arena. These VPs can then be converted to and distributed as Gala (GALA), the native token of the game’s publisher Gala Games.The amount of VP that a player can acquire depends on factors such as the quantity and ranking of the Champion NFTs in their collection, as well as their tier ranking. Hence, more Champion NFTs means more VPs.“We are delighted to meet the demand of gamers who are eager to purchase NFTs leading up to the official release of Champions Arena. Through this sale, our goal is to ensure that as many users as possible can experience one of the core functionalities of the game — earning — right from the initial launch,” said Choi Won-jong, Chief Business Officer of ONEUNIVERSE.Global launch and exclusive offersChampions Arena will launch globally at 5 PM PT on August 23 as a mobile and PC game with the exception of South Korea and select countries, according to Gala Games. The NFTs will be available for purchase on the Gala Games official website starting today until the launch. They will be packaged within “Champion Boxes” that contain one of 18 different playable Champions, including those in the highest tier of Legendary.There is also an exclusive 30% discount event running until 3 PM on August 21.