As Excitement for First US Spot Bitcoin ETF Intensifies, South Korea Still Faces Mountain to Climb

Korea’s FSS Seeks to Protect Investors from Crypto Exploit LossesLee Bokhyun, Governor of the Korean Financial Supervisory Service, said the agency will seek to protect investors from losses resulting from cryptocurrency exchange exploits, according to Korean newspaper Donga Ilbo.©Pexels/RODNAE ProductionsEfforts to enact legislationWhile delivering a congratulatory speech at a forum co-hosted by Donga Ilbo and its subsidiary broadcasting company Channel A on Wednesday, Lee underlined that the agency will be committed to enacting legislation that obligates crypto exchanges to be held accountable for customer asset losses caused by hacks.He explained that amidst a continued crypto winter triggered by multiple failures, such as the collapse of the stablecoin Terra last year, cases of security vulnerabilities are subsequently occurring.Cold wallet requirementsIn response to this situation, financial authorities and the National Assembly are collaborating on legislation that would require crypto exchanges to store a portion of their custody assets in cold wallets, which are disconnected from the Internet, or face liability for damages resulting from hacks.A February report from blockchain data platform Chainalysis showed that losses to crypto hacks last year amounted to $3.8 billion. Earlier this month, Korean crypto exchange GDAC suffered an exploit of 20 billion KRW (~$15 million).Lee said the agency will work with the financial industry to bolster the fraud detection system and build an immediate response system that prevents uncanny transactions when abnormalities are detected. These efforts are to curb the rise in financial crimes, which followed the growing popularity of remote banking services.Experts’ inputsAt the event held to discuss the protection of consumer information in the digital age, senior researcher Kim Gap-rae at Korea Capital Market Institute said that a law should be introduced to penalize unfair practices, such as market manipulation and use of undisclosed information, in the virtual asset market.Lee Joo-hwan, head of the information security management division at Hana Bank, suggested the approach used in the US, which is recovering ill-gotten gains from financial crimes to compensate victims.Kang Byung-hoon, a professor who teaches cyber security at KAIST, anticipated that the financial industry would accelerate the adoption of confidential computing, a highly secure system, to which even administrators have limited access.

The Korea Association of Game Industry (K-GAMES) – the body responsible for overseeing and nurturing the country’s successful gaming industry – released its 2023 Global Game Policy and Legislation Study on Tuesday (KST) in collaboration with the Korea Creative Content Agency (KOCCA).Photo by Tingey Injury Law Firm on UnsplashThe report summarizes gaming-related regulations and laws in six Western European countries – the United Kingdom, Germany, Belgium, the Netherlands, Spain and France – including those on standard terms and conditions, the protection of minors, personal privacy, payment and more. "Through cooperation between public and private sectors, we have been able to achieve tasks like collecting information and securing databases on overseas gaming markets by country and continent," said Kang Shin-chul, President of K-GAMES. "We will continue to contribute to the development of the domestic game industry," he added. Regulatory landscapeThe study found that operators in the specified countries are not required to obtain special licenses, appoint local representatives, or set up servers in order to operate a gaming business in their respective countries. It also details country-specific requirements, such as in Germany, where the use of content that glorifies or justifies Nazi-related symbols or actions is prohibited. A closer look at Belgium’s stanceInterestingly, the report revealed that the regulation of randomly distributed in-game items varied by country. The UK, Germany, Spain, the Netherlands and France have no legal restrictions on such items, but the UK and the Netherlands have recommended that information on the odds of winning them in games of chance should be disclosed before a player obtains or opens an item. Meanwhile, Belgium has implemented a regulation that prohibits paid games of chance for stochastic items altogether due to its laws regarding gambling. However, there are no regulations on Play-to-Earn (P2E) games unless they constitute gambling, which is also true of the other five countries. Minting game items into NFTs is also not subject to oversight in all six nations unless they are considered financial instruments. There are also no standard terms and conditions set by Belgium’s national government for gaming services, which are instead governed by the European Union’s (EU) General Data Protection Regulation (GDPR). 

The global crypto trading platform Crypto.com has signed a memorandum of understanding with AI fashion-tech firm Altava Group, Korean media outlet Digital Daily reported. According to the press, the signing ceremony took place on Wednesday at the office of Crypto.com Korea, attended by Andrew Junhoe Ku, CEO of Altava Group and Eric Anziani, COO of Crypto.com. Photo by freestocks on UnsplashAs the initial step of the partnership, they aim to integrate Crypto.com’s NFT marketplace and payment solutions with Altava Group’s digital fashion services. Altava Group provides innovative virtual fashion experiences to major fashion brands worldwide, including LVMH, Balmain and Bulgari. By leveraging Altava Group’s network, Crypto.com plans to lay the groundwork for innovation in the digital fashion industry, with various joint promotional events with Altava Group in store.  Fashion-tech meets crypto payment“We are excited to partner with Altava Group, a leader in the digital fashion sector. We hope to leverage our technology and expertise for the growth and advancement of the global digital fashion market – an area in which we see great potential,” said Anziani. Ku also expressed his excitement about the partnership and the integration of crypto payment solutions, saying “We are extremely pleased to explore Crypto.com Pay through the partnership with Crypto.com, a global virtual asset leader with over 80 million users. We expect the addition of cryptocurrency as a payment option to help lower entry barriers for fashion brands and creators, and further strengthen the foundation for the digital fashion ecosystem.”