Bybit joins quest for VATP license in Hong Kong

USDT, the leading U.S. dollar stablecoin issued by Tether, has been highlighted as a major conduit for money laundering and scams in Southeast Asia, according to a United Nations report released on Monday.Photo by Mathias Reding on UnsplashIllicit stablecoin useThe report has been titled “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden and Accelerating Threat.” It points out that online gambling platforms, particularly those operating illicitly, are among the favored channels for cryptocurrency-based money launderers, with a notable emphasis on the use of Tether or USDT. In a foreword to the report, Jeremy Douglas, the UN’s Regional Representative for Southeast Asia and the Pacific, noted that technology had aided crime networks in Asia, and in particular, the Mekong Delta region. Developing upon that idea, he added:”This has necessitated a revolution in the regional underground banking architecture, resulting in the development of systems and infrastructure capable of moving and laundering massive volumes of state-backed fiat and cryptocurrencies.”The report itself asserts that illegal and under-regulated crypto exchanges have become “foundational pieces of the banking architecture used by organized crime.” The document highlights law enforcement efforts in disrupting multiple money laundering networks linked to the illicit transfer of Tether funds. Last August, Singaporean authorities dismantled a network through an operation, recovering approximately $735 million in both cash and cryptocurrency. ‘Pig butchering’The UN report further suggests that USDT has been extensively employed in various underground fraud activities, including so-called "pig butchering" romantic scams. Last November, Tether froze $225 million in stolen USDT following investigations by Tether in collaboration with crypto exchange OKX and the U.S. Department of Justice. The money had been held in self-custodied wallets associated with an international human trafficking group in Southeast Asia orchestrating a pig-butchering scam. In December, Tether CEO Paolo Ardoino informed U.S. legislators in a shared letter that the company has enlisted the U.S. Secret Service and Federal Bureau of Investigation onto its platform. Later that month, the Chinese authorities uncovered a massive underground banking operation that was designed to evade the country’s foreign exchange controls. There was more related activity in December when it emerged that USDT has been integrated into the shadow economy in Cambodia, against a backdrop of the currency being prohibited for the purpose of trade within the Southeast Asian country. TRM Labs reportIn July of last year, a report by blockchain analytics firm TRM Labs, found that pro-ISIS terrorist groups in Central and Southeast Asia and the Middle East are increasingly using cryptocurrency, with a particular preference for USDT transacted over the Tron blockchain network. The UN report cites the popularity of USDT among those engaged in cyber-fraud and online casino operations, located in Myanmar, along the border with Thailand. Throughout 2023, Tether witnessed a notable expansion in its share of the global stablecoin supply, growing from 50% to 71%. At the time of writing, USDT has a market cap of $95 billion with stablecoins having an overall market capitalization of $134 billion. The UN's findings raise concerns about the stablecoin's role in facilitating illicit activities and underscore the need for enhanced regulatory scrutiny within the rapidly evolving crypto landscape.

EDUM – a blockchain project run by educational and professional services provider Jinhak’s subsidiary Dream Ladders – has signed a strategic business deal with Web3 firm Metaverse.Network (MNet), according to an article published by South Korean news outlet Maeil Business Newspaper on Friday (KST). Through this agreement, EDUM will be able to strengthen its Web3 platform to help promote effective learning and implement various services within metaverse parameters.Photo by Kelly Sikkema on UnsplashLearning for everyoneEDUM is a Study-to-Earn (S2E) blockchain project that aims to provide learners with affordable, high-quality educational services. Users will be able to earn rewards in the form of EDUM or EDUMP tokens when using different functions on the EDUM mobile application. EDUM is the project’s market-based utility token that can be cashed through external exchanges or even swapped with EDUMP, which has a fixed value and can only be used within the EDUM ecosystem. EDUMP tokens can also be used for purchasing NFTs or lectures on the EDUM platform. MNet’s technological prowessMeanwhile, MNet is a blockchain network operated from headquarters in Singapore. Backed by an Ethereum Virtual Machine (EVM) and WebAssembly (WASM) smart contract playground, builders can develop Web3 decentralized applications (dApps) for Web2 users. Notably, it has secured an investment from global blockchain investment company Animoca and is a key technological partner of the blockchain platform Polkadot. "We will continue to expand the success story and ecosystem of the EDUM project through continuous partnerships with various companies," said Yoo Sung-won, CEO of Dream Ladders. EDUM also recently teamed up with layer 1 blockchain XPLA to expand blockchain-based educational services and increase the role that Web3 can play in various fields.

Bank of Korea Anticipated to Conduct Retail CBDC Pilot TestThe Bank of Korea (BOK), the South Korean central bank, is reportedly planning to conduct a pilot test for distributing retail central bank digital currencies (CBDCs) to the general public via commercial banks, according to a report by local news outlet IT Chosun.Photo by Zequn Gui on UnsplashBOK’s CBDC initiativesIn 2020, the BOK initiated a pilot test for CBDC issuance, establishing a platform for both online and offline payments. Last month, the BOK announced the successful completion of a CBDC simulation to ensure connectivity with commercial banks.A representative from a commercial bank stated that the BOK would recruit banks next month for a retail CBDC experiment. The pilot test for this retail CBDC is projected to take place next year.Wholesale and retailThe upcoming CBDC pilot test aims to cater to the retail needs of ordinary citizens. There are two types of CBDCs: wholesale CBDCs, which facilitate payments between financial institutions, and retail CBDCs, which are accessible to all economic entities, including the general public.The successful execution of the retail CBDC pilot test requires close collaboration between the BOK and commercial banks. A banking official highlighted that while the BOK can outline the distribution framework for wholesale CBDCs, it may not be the most suitable entity to design the intricate distribution scheme for retail CBDCs.Last year, 15 financial institutions, including five commercial banks (KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NongHyup Bank), participated in an inter-institutional CBDC linkage experiment with the BOK. The BOK is expected to select banks from among these participants to design the distribution structure of retail CBDCs and proceed with a pilot test.Speculative timelineAn official from a commercial bank that took part in the BOK’s prior experiment said that the Korean central bank has recently maintained close communication with commercial banks and successfully completed the infrastructure linkage test for CBDCs. The official also mentioned that the retail CBDC test is expected to see its completion this year, potentially enabling the commencement of retail CBDC implementations in the private sector next year.However, a BOK official expressed a more cautious stance. The official stated that the BOK has recently expanded its digital currency research team and plans to conduct further research in the future. Specific timelines and plans for the retail CBDC test could not be disclosed at this time.Other countriesDifferent countries have adopted varying approaches to CBDC research and implementation, depending on their economic conditions. Developing nations have been promoting CBDC issuance to facilitate financial inclusion, while developed countries have prioritized the stability of their financial systems.However, as cash payments decline and private digital currencies continue to proliferate, developed countries are also turning their attention to retail CBDCs. For instance, the Bank of England collaborated with the Bank for International Settlements (BIS) to establish and experiment with retail CBDC prototype infrastructure. Similarly, the European Union (EU) has released draft legislation to introduce the digital euro as a legal tender within the Eurozone.