Academia, Industry Collaborate on Crypto Accounting Research in Korea

Kazakhstan shuts out 980 non-compliant crypto exchanges in 2023Kazakhstan has implemented stringent measures in 2023 when it comes to regulating the crypto sector, resulting in the closure of 980 crypto exchanges that failed to comply with government regulations.That’s according to a press release published by the Central Asian country’s Financial Monitoring Agency (FMA), the state entity responsible for anti-money laundering (AML) policy. These measures, taken over the course of the year, were highlighted during the 39th Plenary Week of the Eurasian Group (EAG) in the resort city of Sanya, in Hainan province in China.Photo by Kuralbek Djumagaziev on UnsplashCombating money laundering threatsThe seminar served as a platform for participating countries to exchange experiences, with an emphasis on leveraging advanced technologies, including artificial intelligence, to effectively combat emerging threats related to money laundering and terrorist financing. The Kazakhstani delegation played a leading role in discussions on virtual assets.Ruslan Ostroumov, the Head of Kazakhstan’s Financial Monitoring Agency, showcased the country’s legislative regulations and robust measures to combat the illegal turnover of digital assets. Ostroumov reported the blocking of 980 illegal cryptocurrency exchange platforms in the current year. Additionally, nine investigations into illegal exchange operations, amounting to $36.7 million, have been initiated, accompanied by ongoing preventive measures.Registration process complexityWhile the seminar’s organizers commended Kazakhstan for its proactive stance against financial crimes in the virtual assets space, the country’s crypto laws have added complexity to the registration process for exchanges.In November, the Kazakhstani authorities blocked local access to the Coinbase website due to potential violations of the country’s digital asset legislation. This decision aligned with the law on digital assets, effective since February 2023, which prohibits the issuance and trading of digital currencies and cryptocurrency exchange businesses without proper licensing.While challenges remain for crypto platforms within Kazakhstan, some have been successful in their efforts. In May, crypto derivatives trading platform Bybit was successful in gaining approval to offer its services within the country. Binance followed suit in June, securing preliminary approval. Other platforms such as CaspianEx, Biteeu, ATAIX, Upbit, Xignal and MT have been granted permission to conduct trade in Kazakhstan.In December 2020, Kazakhstan formally legalized cryptocurrency mining, and on May 6, 2021, the National Bank of Kazakhstan announced plans to issue a “digital tenge,” their version of a central bank digital currency (CBDC). Various CBDC-related projects have followed. In September, the National Payment Corporation, an entity which will be responsible for CBDC development, was launched. The same month, the National Bank of Kazakhstan entered into a collaboration with financial messaging service SWIFT to work on an interoperable CBDC connector.For the most part, these comprehensive regulations and the issuance of a CBDC signify Kazakhstan’s broader acceptance and adaptation to the cryptocurrency landscape. Authorities internationally are trying to find a balance between adequate regulation and enabling innovation to take place. Kazakhstan is no exception, and with that, there are bound to be challenges as regulatory frameworks are optimized and tweaked along the way.

Haru Invest Announces Withdrawal & Deposit PauseHaru Invest, a crypto yield platform founded in South Korea and headquartered in Singapore, has announced the suspension of deposits and withdrawals on Tuesday, citing concerns over the accuracy of information provided by one of its service partners.Photo by Muhammad Zaqy Al Fattah on UnsplashInternal investigationIn a statement, the company expressed its apologies to investors and customers, assuring them that the suspension was a necessary measure taken to protect their interests. In another blog post, the company stated: “For the purpose of protecting our users’ assets under our custody, we have come to make a tough decision that any deposit and withdrawal requests will be suspended until further notice, starting from June 13, 2023, at 0:40 UTC.”Following an internal inspection process, Haru Invest conducted a thorough investigation into the matter and concluded that immediate action was required. The company stated that it is currently engaged in a fact-finding process against the operator in question and intends to take the necessary measures to address the situation.“Rug pull” denialHaru Invest emphasized that this issue does not involve a “rug pull,” a term commonly associated with scams in the cryptocurrency space. The company assured its stakeholders that it remains committed to protecting its investors and is actively working towards a resolution.Earlier reports suggested that Haru Invest employees were working remotely and that the company’s offices had closed. However, Haru Invest clarified that certain media articles contained inaccurate information regarding these claims. The company expressed regret over the misinformation and emphasized the importance of factual accuracy in reporting.According to Haru Invest’s website, the platform boasts a significant user base of over 80,000 members. It has facilitated crypto-earn payouts totaling 9.8 million and processed a staggering $2.27 billion in transactions. Haru Invest aims to provide an annual yield of 12% on most of its earn products, offering investors an attractive opportunity in the crypto space.Haru MiningIn September of the previous year, Haru Invest successfully raised $4 million in funding, valuing the company at $284 million. This achievement demonstrates the confidence investors had in the platform and its potential for growth.As recently as last month nothing looked untoward when it emerged that the company had launched Haru Mining, a collaboration with Canadian crypto miner, Pow.re. In a press release at the time, the firm explained that the move would help to diversify its products, with mining always having been an area of interest for the company.In the same month, Haru had announced an integration with Mercuryo, a London-based digital asset management platform.As Haru Invest continues to address the concerns raised by the investigation, investors and customers await further updates regarding the resumption of normal operations. The company has promised that “more details will be shortly announced on the Haru Invest Blog as soon as we get to the bottom of this.”

Local crypto firms in Hong Kong are understood to be in “active” talks with the Securities and Futures Commission (SFC), with a view towards bringing about the integration of staking within crypto exchange-traded fund (ETF) products. Haiyang Ru, chief risk officer of HashKey Group, a leading Hong Kong-headquartered digital asset financial services firm, told The Block that the Chinese autonomous territory may shortly see the introduction of staking services relative to crypto derivatives trading products and crypto ETFs. He stated: "We are actively discussing with the SFC the introduction of ETF staking and tokenized money market funds, as well as launching an 'Earn' feature alongside spot trading."Photo by tommao wang on UnsplashFocus on staking in 2025HashKey is one of a number of well-known digital asset firms that is in regular contact with the regulator. Other firms are also paying attention to developments. Alessio Quaglini, co-founder and CEO of Hex Trust, a Hong Kong-based firm that offers regulated institutional digital asset custody and staking services, believes that staking will garner greater attention in 2025. He stated: “Institutions that move into crypto custody will naturally seek yield-generating opportunities for their clients."  OSL, one of the first entities alongside HashKey to be awarded digital assets-related licensing in Hong Kong, has also identified rising customer demand for yield-generating products in the crypto space within the Chinese autonomous territory.  Global competitionThe authorities in Hong Kong are likely to be watching developments overseas also. ETH ETFs in the United States have reeled in $3 billion in capital inflows without staking. Since the launch of these products, many industry commentators have suggested that in the event that staking is approved, big institutions, particularly pension funds and wealth managers, are going to be attracted to the passive yields on these ETFs.  Traditional finance (TradFi) loves yield, and in the case of Ether ETFs that include staking, an annual percentage yield (APY) of up to 5% should be possible. Last month, an S&P Global report suggested that there was growing interest from institutional investors with regard to crypto staking opportunities.  Cryptocurrency ETF issuer 21Shares has applied to the Securities and Exchange Commission (SEC) in the U.S. to include staking within its ETH ETF product. A similar application has been made by crypto asset manager Grayscale relative to its ETH ETF offering. With that activity ongoing in the U.S. and inter-jurisdictional competition in terms of digital asset growth opportunities, it’s likely that Hong Kong will be keen to enable this market offering. Staking ‘unparalleled’ in TradFi markets Earlier this week, the SFC introduced a new roadmap geared towards strengthening the digital assets sector in Hong Kong. One of the initiatives itemized is the enabling of crypto staking.  The explanatory document published by the regulator states that it is examining the introduction of staking with safeguards in respect to digital asset custody, liquidity risks and “ensuring that the operational processes for staking are transparent.” The SFC described crypto staking as a yield generation opportunity that is unparalleled in TradFi markets.