Crypto.com Plans to Launch Its Services in South Korea This Year

Korean Investment Firm Partners with Open Asset to Build Security Token SystemKorea Investment and Securities (KITC), one of the major securities firms in the nation, announced today that it signed a memorandum of understanding (MOU) last week with Seoul-based blockchain developer Open Asset to construct a distributed ledger system for a security token alliance led by KITC. That’s according to a report by local news outlet Dailian.Photo by Growtika on UnsplashSecurity token groupIn March, KITC initiated a security token group called “Korea Investment ST Friends” in collaboration with online banks Kakao Bank and Toss Bank, as well as Kakao Enterprise, an artificial intelligence (AI) solution provider. The primary objective of this alliance is to establish the necessary infrastructure for issuing products suitable for security tokens.Tech expertiseOpen Asset, led by its CEO Kim Kyung-up, boasts a team of tech talents. The company played a key role in the Bank of Korea’s central bank digital currency (CBDC) project and participated in the development of Kakao-backed initiatives such as the blockchain platform Klaytn and the digital wallet Klip.Future system integrationThe partnership with Open Asset aims to integrate the forthcoming distributed ledger system into KITC’s existing securities trading platform, creating synergies for its business. Additionally, the two entities are exploring the possibility of connecting the new platform with the systems of other participants in the group in the future.Choi Seo-ryong, the head of the platform division at KITC, emphasized the investment firm’s objective of establishing market standards for security tokens that offer numerous possibilities. He added that KITC will work with Open Asset to develop an innovative and efficient system.

A recent survey in South Korea found that 20.3% of crypto investors have fallen victim to financial losses. Conducted by the Korea Financial Consumers Protection Foundation in late December, the survey polled 2,500 adults aged 19-69, with respondents able to select multiple loss categories. Investors in their 60s were most vulnerable, reporting a 25.3% loss rate. Exchange-related problems constituted the majority of incidents (72.8%), followed by online chat room scams (44.7%) and investment fraud (35.5%).Photo by Growtika on UnsplashExchange failures lead lossesAmong exchange-related losses, 40.6% of users couldn't sell assets due to system failures, while 11.5% lost digital assets through exchange hacking. Overall, exchange technical issues accounted for 52.1% of reported losses, with another 20.7% losing assets when exchanges closed completely. Chat group scam victims experienced various forms of fraud: 23.2% paid for worthless or false information, while 21.5% suffered financial losses through market manipulation or proxy trading schemes. Investment scams included fake crypto projects or fraudulent firms (18.0%), deceptive exchanges (10.3%), and other scams (7.2%). Most victims (75.1%) reported losses under 10 million won (approximately $6,945), with 34.6% losing less than 1 million won. Due to these relatively small amounts, 67.7% took no action following their losses. Of the 32.3% who sought help through various channels, 73.9% were unable to fully recover their funds. Problem worsening across Asia and beyondThis problem extends beyond South Korea. In neighboring Japan, police reported 19,038 crypto fraud cases in 2023, with damages totaling 45.26 billion yen (about $300 million), according to Chainalysis, citing Japanese National Police Agency data. These figures surpass 2022 numbers, indicating continued growth in fraudulent activities. A recent case highlighted by the Fukushima Minyu Shimbun involved a Soma City woman in her 50s who lost approximately 116.6 million yen ($780,000) to scammers impersonating police officers. The fraud began with a fake customer service call, followed by deceptive claims about fraudulent accounts and threats of arrest, which led her to create cryptocurrency accounts and transfer funds before eventually reporting the scam. Elderly at highest risk as fraud surgesThe FBI's Internet Crime Complaint Center's 2024 report further confirms this trend, documenting 149,686 crypto fraud complaints in the U.S. with $9.3 billion in reported losses—66% higher than in 2023. Notably, people over 60 were the most affected demographic, consistent with the Korean study's findings.

Further Setback for Luno With Loss of Top ExecGlobal crypto exchange Luno has been challenged of late, with job cuts, the closure of its presence in Singapore and now the loss of a key executive from the company.According to a report published by CNBC on Tuesday, the embattled crypto firm is losing Vijay Ayyar, its Vice President of Corporate Development and International. The setback follows an announcement last month by the company to withdraw its presence from the Singaporean market.Photo by Marten Bjork on UnsplashUnrelated to Singapore closureAyyar made the following comment via WhatsApp message: “I’ll be leaving Luno after 7 years at the company. Given the time I’d spent at Luno, it just seemed like it was time for another challenge.” It’s understood that Ayyar has confirmed that Luno’s move to exit Singapore (where he was based) was not related to his own decision to move on. Instead the top executive has said that he will be joining another company within the crypto and over-arching Web3 space.Luno management had previously outlined that its decision to exit Singapore formed part of an overall “evaluation of [its] global strategy and presence.” As part of its retreat from that South East Asian market, it withdrew its licensing application from consideration by the local regulator, the Monetary Authority of Singapore (MAS).At the time of that announcement, the company stated: “ It’s not a decision we’ve taken lightly. It’s always been our mission to put the power of crypto in everyone’s hands. This is still true.”Organizational changesThe company is clearly going through a period of adjustment from a staffing and resourcing perspective. Last month, Luno announced that its co-founder, Marcus Swanepoel, would be stepping down as CEO. Filling his boots in that role will be Luno’s Chief Operating Officer (COO), James Lanigan.This organizational upheaval follows a further setback in January, when the company announced a 35% cut in headcount. The decision for those job cuts was taken as a knock on reaction to what had been a very challenging trading environment for Luno and crypto companies generally during a year long crypto bear market in 2022.A troubled parent companyLuno’s difficulties have been further compounded given that it is a portfolio company of crypto industry conglomerate, Digital Currency Group (DCG). DCG had acquired the company in 2020. DCG also owns digital assets-focused financial services firm Genesis which filed for bankruptcy in January. It owes $575 million to Genesis in a scenario that places DCG itself in default risk.Genesis and DCG have recently entered into a 30 day mediation process in order to reach a resolution relative to creditors who participated in the Gemini Earn programme associated with the Gemini cryptocurrency business run by Cameron and Tyler Winklevoss.As yet DCG has not sought to sell off any of its portfolio companies which includes Grayscale, CoinDesk and Foundry. However, it’s understood that Luno has hired investment bank Canaccord Genuity in an effort to garner suitors who would be interested in investing in the company. This may be part of a plan to unburden the troubled DCG parent company.