Upbit Operator Doubles Down on ESG Management

Taiwanese authorities have unveiled plans to criminalize cryptocurrency firms failing to comply with anti-money laundering (AML) regulations. The Ministry of Justice has proposed amendments to existing laws, mandating both domestic and overseas crypto entities operating in Taiwan to register for AML compliance. Non-compliance could result in imprisonment for up to two years, according to Deputy Minister of Justice Huang Mou-hsin.Photo by Jack Brind on UnsplashStricter enforcement measuresCurrently, authorities can only impose administrative penalties on non-compliant crypto firms. However, with the proposed amendments, such violations would be deemed criminal offenses, potentially leading to prison sentences. Overseas crypto platforms would be required to establish local entities and apply for AML registration to avoid criminal penalties. Regulatory landscape and industry responseSince July 2021, Taiwan has mandated cryptocurrency service providers to adhere to AML laws introduced by the Financial Supervisory Commission. However, the crypto industry largely remains unregulated. Proposed amendments also aim to incorporate cryptocurrencies into existing AML laws, stipulating penalties of six months to five years in prison and fines of up to NT$50 million ($1.5 million) for money laundering using cryptocurrency. The amendments are set to undergo review by Taiwan's national parliament, the Legislative Yuan. Concurrently, Taiwan's crypto sector is in the process of forming an industry association, with the Ministry of the Interior approving the application in March. By establishing this association, crypto firms aim to develop self-supervisory rules aligned with FSC guidelines, with a deadline set for the end of June to finalize preparations and officially establish the association. 

Authorities in China have disclosed that Yao Qian, a prominent figure in the country's blockchain industry and former head of China's central bank digital currency institute, is under investigation by the nation's anti-graft watchdog. The announcement was made on Friday, revealing that Yao is "suspected of serious violations of discipline and law." However, specific details regarding the nature of the investigation were not provided.Photo by Max van den Oetelaar on UnsplashCareer and recent roleYao Qian currently holds the position of head of the technology regulation department at the China Securities Regulatory Commission. Earlier in the month, he authored an opinion piece titled “Warnings Mount Over Novel Bitcoin ETFs That Have Taken the U.S. by Storm” on Caixin, a prominent Chinese financial news platform. Born in 1970, Yao initially served as the inaugural head of China's central bank digital currency research institute in 2017 before transitioning to the securities regulator in 2018. Contributions to blockchain discourseThroughout his career, Yao Qian has been actively involved in discussions surrounding blockchain technology. In 2022, he published a book covering various topics within the blockchain space, including DAOs, DeFi, NFTs and X-to-earn models. In the foreword of his book, Yao emphasized the growing significance of Web3 innovation, noting it as a development direction of high importance and value for nations. Lack of specifics surrounding investigationThe announcement of Yao Qian's investigation has left many observers in the blockchain industry with questions, as authorities did not provide clear reasons for the probe. Despite his past contributions and current role in technology regulation, the investigation raises uncertainties about Yao's future involvement in the blockchain sector and his standing within Chinese regulatory circles. As developments unfold, stakeholders within the blockchain community will continue to monitor the situation surrounding Yao Qian's investigation and its potential implications for China's blockchain policies and initiatives. 

Blockchain-based digital payment network enterprise Ripple has announced that it has acquired in-principle approval of a financial services license from the Dubai Financial Services Authority (DFSA) in the United Arab Emirates (UAE). In a press release published on the firm’s website on Oct. 1, Ripple claimed that the approval “unlocks Ripple’s end-to-end payment services in the UAE, boosting Middle East operations.” The in-principle approval is a first step on the company’s path towards full approval. That eventuality will enable Ripple to offer cross-border payment services relative to fiat and digital assets, within the Dubai International Financial Center (DIFC) special economic zone.Photo by Moose Photos on PexelsExpanding Middle Eastern presenceThe company claims that pursuing the license is part of a broader strategy to expand its Middle Eastern presence. It follows on from the firm’s move in 2020 to establish its Middle Eastern headquarters in Dubai. Ripple claims that the licensing “significantly strengthens Ripple’s global footprint as a regulated entity and enables the introduction of seamless cross-border payment services, including Ripple Payments Direct (RPD), in the United Arab Emirates (UAE).” In moving from in-principle approval to full approval, Ripple will have further obligations to accomplish, such as securing office space within the DIFC special economic zone. The company had previously indicated its intention of establishing an office within the DIFC. Back in August, it emerged that Ripple had partnered with the DIFC Innovation Hub with a view towards promoting blockchain and digital asset innovation within the UAE. Regulatory clarity in the UAERipple is striving to become the first blockchain-enabled payment services provider licensed by the DFSA. Once licensed, the company plans to roll out its enterprise-grade digital asset infrastructure. Ripple’s XRP has been one of five digital assets approved by the DFSA such that investment funds are allowed to invest in it, although the regulator did indicate in June that it is moving towards expanding the list of recognized tokens. Mired in legal difficulties with local regulator the Securities and Exchange Commission (SEC) in its home market of the United States in recent years, the company signaled a change of strategy in 2023, indicating its interest in focusing more on international expansion. While speaking at an event in Dubai at the time, Ripple CEO Brad Garlinghouse said that Ripple was expanding in Dubai. Taking to X in relation to this latest milestone, Garlinghouse wrote that “regulatory clarity is what businesses want, and what consumers need,” adding that “the UAE understands that.” In the company’s press release, Garlinghouse referred to the “forward-thinking regulatory approach” being pursued in the UAE, which he believes is positioning the country “as a global leader in this new era of financial technology.” The UAE isn’t the only focus for the company’s international expansion. Ripple has established an office in Singapore which handles over 50% of the firm’s payment flows. On Oct. 1, U.S. investment bank Houlihan Lokey published a report in which it highlighted Ripple as an emerging competitor to the SWIFT cross-border payments system.  Although the company has had some success in navigating its way through litigation with the SEC in the U.S., it’s thought that the dispute may be prolonged further as some commentators have suggested that the SEC plans to appeal a recent court decision.