Hong Kong’s SFC Issues Warning Against Unlicensed Crypto Platforms

Korea Bolsters Crypto Oversight and Anti-Fraud EffortsThe Korean National Police Agency (KNPA) is planning to build a system that allows for the swift suspension of wallet addresses on Binance, the giant global cryptocurrency exchange, during criminal investigations, according to a report by news outlet Edaily. This move comes as Binance is in the process of acquiring Gopax, one of the five major crypto exchanges in South Korea.Photo by Pixabay on PexelsPolice and crypto exchangesThe KNPA met today with these exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax) and Binance to discuss this matter. In October last year, the KNPA signed a business agreement with the five exchanges to establish a crypto exchange compliance management system.The system serves as a tool for the police to search wallet addresses that are under investigation and determine which of the five exchanges is managing them. Operating 24 hours a day, the hotline enables them to swiftly request freezes and execute warrants. As of May of this year, the system has been utilized by 2,086 investigators.The police are currently working on expanding the system to incorporate Binance. Hence, the focus of today’s agenda is to introduce additional functionalities to the system that would allow the police to thoroughly examine wallet addresses on Binance and initiate freezes when necessary. Until now, the police have been making verbal requests via the hotline before issuing formal letters.In addition to addressing the integration of Binance into the system, the police will engage in discussions regarding enhancements to the compliance system for crypto exchanges and the management of the hotline. Looking ahead, their goal is to extend the application of the compliance system to encompass all 36 crypto exchanges operating in Korea at present.Financial authority bolsters probe unitMeanwhile, the Korean Financial Supervisory Service (FSS) held a press conference today to announce its plan for enhancing its capacity to combat the escalating prevalence of unfair trade practices. Particularly rampant in unregistered investment entities and social media chat rooms, these practices have prompted the FSS to take decisive action.To address this pressing issue, the FSS has devised a plan to bolster its investigative prowess. It intends to augment the manpower of its three investigation units, increasing the number of investigation officers from the current 70 to 95. Furthermore, the establishment of three additional teams is on the horizon, further strengthening the FSS’s investigative capabilities.The Special Investigation Team will fully dedicate its efforts to combating severe unfair trading practices that have the potential to cause substantial losses for investors. The Information Collection Team will employ a multifaceted approach to gather pertinent information. Through both in-person interactions and online activities, this team will diligently collect data essential to uncovering and addressing unfair trade practices. The Digital Investigation and Response Team will delve into the intricacies of emerging digital assets, including cryptocurrencies and security tokens. Their primary objective is to develop and refine investigative techniques specifically tailored to these novel forms of digital assets.In order to enhance its responsiveness to unfair trading practices, the FSS will introduce a new system for sharing investigative information with cryptocurrency exchanges. This collaborative effort aims to foster closer cooperation between the FSS, the prosecution, and the police, ensuring swift and effective responses to any instances of misconduct.The Korean financial authority has affirmed its commitment to working closely with relevant agencies to strengthen investor protection and promote transparency in the capital market. Additionally, it has warned investors to exercise caution and avoid falling victim to investment frauds or engaging in excessive leveraging that may result in substantial losses.

The decision by U.S. regulators to approve spot Bitcoin exchange-traded funds (ETFs) in January appears to be having some knock-on effects, with the latest such response seeing the Thai authorities enable access to such products for institutional investors and ultra-high-net-worth individuals within Thailand.Photo by Karolina Grabowska on PexelsMeeting a growing demandAccording to a report in the Bangkok Post on March 12, Thailand’s Securities and Exchange Commission (SEC) has agreed that Thai asset management firms may manage and offer funds that incorporate investment in U.S. spot Bitcoin ETF products. The decision was arrived at following a recent SEC board meeting. The SEC's decision reflects a strategic response to the growing demand for digital asset exposure among institutional investors. It would appear that spot Bitcoin ETF approval in the United States has bolstered investor confidence in this investment instrument on an international basis. Urging cautionDespite the opportunities this presents for institutional investors, the SEC has emphasized caution, citing the high-risk nature of digital asset investments. SEC Secretary-General Pornanong Budsaratragoon verbalized that need for caution, stating: "Asset management firms asked the SEC for them to have exposure in digital assets, especially Bitcoin and spot Bitcoin ETFs, but we need to consider carefully whether to allow asset management firms to invest in digital assets directly due to the high risk.”It’s interesting to note that in an immediate response to the approval of these products in the United States in January, Thailand’s SEC clarified that it had no plans to allow asset management firms to launch similar products within Thailand. For the moment at least, it seems that demand will be satisfied by accessing products that have gained exposure to U.S. spot Bitcoin ETFs instead. Retail investors excludedWhile this move expands the investment landscape for institutional players, retail investors in Thailand find themselves sidelined due to regulatory restrictions. The amended regulations primarily cater to accredited investors, leaving retail participation in spot Bitcoin ETFs out of reach. This exclusion contrasts with the popularity of retail crypto trading in Thailand, albeit within regulated boundaries. Recent government regulations have both facilitated and restricted certain crypto activities. Thailand's move aligns with broader trends in the cryptocurrency sector, with several countries, including South Korea and Hong Kong, exploring opportunities in the space. In Hong Kong, regulators are currently processing applications for Bitcoin ETFs, with several financial institutions expressing interest in introducing spot Bitcoin ETFs. Just like the Thai authorities, the governor of the Royal Bank of India (RBI) had also responded in the aftermath of product approval in the U.S. stating that he didn’t favor the approval of such products in India. Despite that, news emerged on March 11 that Indian crypto investment platform Mudrex is planning to meet demand by providing clients with access to these U.S. products. As institutional investors gear up to capitalize on this opportunity in Thailand, the regulatory framework surrounding digital assets will continue to shape market dynamics, both domestically and internationally.

Coin Oasis Founder Thinks UAE Set Up For Crypto SuccessAs the dust settles on 2023's Dubai Fintech Summit, which took place last week, one takeaway offered by the Co-Founder of blockchain ecosystem firm Crypto Oasis is that the United Arab Emirates (UAE) has set itself up for success where crypto business is concerned.In speaking with crypto publication CoinTelegraph on the fringes of the Dubai Fintech Summit, Coin Oasis Co-Founder and Managing Partner Saqr Ereiqat suggested that the regulatory infrastructure that the UAE has put in place provides an ideal foundation upon which crypto companies can develop and prosper.Photo by Mo Ismail on PexelsRegulatory infrastructureEreiqat pointed to some key fundamentals that crypto entrepreneurs and start-up founders should look at when deciding on the location that will best meet their needs and help to optimize their route to market and ultimate success. This includes the regulatory infrastructure.The UAE authorities and regulators at a national level, together with their colleagues within the regulatory agencies in the Emirates of Dubai and Abu Dhabi, have been doing some heavy lifting in this regard over recent months.They’ve all been working on establishing a workable regulatory framework, and as part of that, a licensing process. In the case of Dubai, its Virtual Assets Regulatory Authority (VARA) has started to issue preliminary or Minimum Viable Product (MVP) license approvals that enable crypto startups to get started, while providing them with a pathway towards obtaining Full Market Product (FMP) licensing at a later stage.Talent poolThe other key requirements that Ereiqat set out were digital infrastructure alongside an ability to attract and provide a pool of talent relative to the crypto assets space. In respect of these key considerations, Ereiqat believes that the UAE hits the target in each case.“The UAE’s regulatory framework is more streamlined and business-friendly compared to the complex and fragmented regulatory environment in the US,” he told the crypto media firm.To enhance these fundamentals, Ereiqat also alluded to a depth of capital that could potentially find its way into UAE-based crypto businesses, easing these start-ups’ efforts in executing on funding rounds as they look to achieve growth.Ereiqat maintains that the interest in the region is already evident, citing a data-point that suggests there are 1,800 Web3-centric businesses already operating in the region, with more than 8,000 people working for those start-up businesses. Speaking to that reality further, he said:“The Dubai FinTech Summit was a significant event that brought together stakeholders from the fintech industry […] The presence of crypto and Web3 leaders and projects at the event is an important indicator of the growing interest and adoption of these technologies in the region.”This enthusiasm and belief in the existence of the right Web3 business environment in the UAE was echoed at that event by both Coinbase Founder and CEO Brian Armstrong and Ripple Founder and CEO Brad Garlinghouse. Both industry figures featured as keynote speakers at the event. Armstrong alluded to the potential of Coinbase establishing a base in Abu Dhabi while Garlinghouse announced the opening of a Ripple office in Dubai.