Korea requires lawmakers and senior officials to declare crypto holdings

Blockchain.com Secures License to Expand Operations in SingaporeBlockchain.com, the London-headquartered crypto financial services company, has achieved a significant milestone by obtaining a payment license in Singapore.Photo by Mike Enerio on UnsplashAsian expansionThe move signifies the platform’s expansion not only within Asia but also on a global scale. In a press release issued on Monday, Blockchain.com proudly announced its acquisition of a major payment institution (MPI) license from the Monetary Authority of Singapore (MAS) on August 1.The development follows an in-principle approval granted to Blockchain.com by the Singaporean central bank back in September 2022. With the newly acquired MPI license, the platform is now authorized to provide “digital payment token” (DPT) services to both institutional clients and investors in Singapore.Removal of transaction volume limitsUnder the regulatory framework of MAS’s Payment Service Act, the license grants Blockchain.com the authority to operate as a platform facilitating the exchange of various DPTs while also conducting DPT transactions themselves. An interesting facet of the license is that it liberates the crypto exchange from certain transaction volume limitations set within Singapore, as outlined on MAS’s official website.Expressing enthusiasm about this accomplishment, the Co-Founder and CEO of Blockchain.com, Peter Smith, lauded the crypto-friendly environment in Singapore. Smith commended the Monetary Authority of Singapore for its transparent regulatory process, on the basis that it strikes a balance between overseeing the crypto industry and fostering innovation. He stated:“We are thrilled to receive this license that will allow Blockchain.com to bring our industry-leading products and services to Singapore. We commend the Monetary Authority of Singapore on its transparent regulatory process that prioritizes crypto industry oversight while allowing innovation to thrive.”Over a decade in operationHaving been established in 2011, Blockchain.com boasts a reputable standing as one of the crypto industry’s pioneers. It’s most well known for its Bitcoin blockchain explorer and its wallet service. With a user base of 87 million active wallets and 37 million verified customers, the exchange business claims that it accounts for a large chunk of all Bitcoin network transactions.Singapore, heralded for its emergence as a crypto hub, has welcomed other crypto entities holding Major Payment Institution (MPI) licenses, including prominent stablecoin issuers Circle and Paxos. The city-state has drawn a significant influx of crypto businesses in recent years, supported by its well-defined regulatory framework and the government’s commitment to nurturing the burgeoning crypto landscape within its borders.Fostering Web3 innovationMAS has demonstrated that it is aligning itself with a dedication to fostering innovation, with its recently announced plans to allocate $112 million over a span of three years for the development of cutting-edge financial technologies. This initiative will encompass fintech solutions grounded in Web3 principles.Nevertheless, Singapore remains cautious about the potential risks associated with the crypto space. In July, MAS directed all crypto businesses within its jurisdiction to transfer user assets to statutory trust accounts before the end of 2023. This precautionary measure is likely to be a reaction to crypto failures such as that of crypto-lender Hodlnaut and crypto exchange FTX, which affected Singaporeans disproportionately. It aims to minimize the risk of asset loss or misappropriation.MAS also has moved to permit crypto firms to offer staking and lending services solely to institutional clients, imposing a ban on the retail market for these services.

Korean Financial Watchdog Takes Action to Prevent Abnormal Foreign Currency TransfersAccording to yesterday’s press release, the South Korean Financial Supervisory Service (FSS) has undertaken measures to tackle the issue of abnormal foreign currency transactions disguised as cross-border trade transactions. After identifying suspicious transactions of a total of approximately $7.2 billion involving 83 companies, the FSS has collaborated with the Korea Federation of Banks and domestic financial institutions to establish a task force. The objective is to improve the existing system and prevent such occurrences in the future.Photo by Eric Prouzet on UnsplashWeaknesses in internal controlsDuring inspections conducted within the banking industry since June 2022, the FSS uncovered weaknesses in internal controls related to foreign currency transfers. These included instances where banks neglected to verify the required documents for transfers and failed to detect abnormal transactions that had been ongoing for an extended period of time. The abnormal foreign currency transfers primarily involved funds flowing out of Korean virtual asset exchanges and being sent overseas under the pretense of trade transactions.Three-line defense internal control systemTo address these vulnerabilities, the task force has engaged in discussions and decided to build an internal control framework within the banking industry, rather than to add a new procedure. This was to minimize the disruption that the new system can pose to banks regarding foreign exchange transactions. The dedicated group has introduced a three-line defense internal control system.The new internal control system comprises three parts. Firstly, it involves standardizing a checklist of vital checkboxes that must be completed before initiating advance remittance transfers for imports. Secondly, the monitoring system employed by banks will be strengthened. Lastly, a follow-up system will be developed, clearly outlining the roles and responsibilities of banks and incorporating a review process.Implementation and timelineBanks plan to implement these improvement measures in July, following necessary preparations such as guidelines revision and rules update in the second quarter of this year. Since developing a computerized system and devising new procedures may require additional time, they will be gradually introduced in the third quarter.The FSS expects these improvements will ensure the systematic operation of banking institutions’ internal control functions related to cross-border prepayments, thereby preventing suspicious foreign currency transfers and curtailing companies’ risks of violating their obligations.

Korea’s Chungcheongbuk-do to Foster Regional Blockchain EcosystemChungcheongbuk-do, a South Korean province located 117km south of Seoul, has entered into a partnership with the Korea Internet and Security Agency (KISA) to launch a regional blockchain initiative. The province won the bid for this initiative, proposed by the Ministry of Science and ICT, with the goal of fostering a thriving blockchain ecosystem within the region. Spearheading this project will be the Chungbuk Innovation Institute of Science and Technology (CBIST).Photo by Suzi Kim on UnsplashComprehensive supportWith a budget of 1.4 billion KRW ($1.07 million), CBIST will spearhead the initiative by providing support to startups and creating a business-friendly environment. The province of Chungcheongbuk-do will offer consulting services to assist startups in exploring innovative blockchain solutions. They will also provide comprehensive support, including accommodations, infrastructure, equipment, and access to cloud computing platforms.Blockchain into other industriesFurthermore, Chungcheongbuk-do will extend funding opportunities and implement educational programs to nurture skilled individuals and develop a self-sustaining blockchain sector within the province. The goal is to catalyze the emergence of innovative business models that incorporate blockchain technology into various industries such as storage batteries, semiconductors, and parts and materials. This initiative is expected to boost the region’s economy and enhance its competitive advantage.Since the establishment of the Chungbuk Blockchain Promotion Center at CBIST in 2018, the provincial government has been actively involved in discovering and planning various blockchain projects and raising awareness. With the current blockchain initiative, Chungcheongbuk-do aims to build a comprehensive support system that will facilitate the growth of the regional blockchain sector.Kim Jin-hyung, Chief of the Science and Talent Bureau of the Chungcheongbuk-do government, expressed that this blockchain initiative aligns with the strategic vision of the elected local government to establish a high-tech region. The provincial government is dedicated to identifying software-focused projects that can strengthen startup ecosystems and empower young entrepreneurs.