Korean tech firms distance themselves from label 'blockchain' in rebranding efforts

Israel Freezes Crypto Accounts Linked to HamasIsrael has taken action to freeze cryptocurrency accounts believed to be involved in a fundraising campaign for the Palestinian militant group Hamas on social media, according to a statement by Israeli police on Tuesday.Hamas recently carried out a series of devastating attacks from Gaza into Israel, leading to one of the most severe escalations in the Israel-Palestinian conflict in years.According to the police statement:“With the outbreak of the war, Hamas’ terrorist organisation initiated a fundraising campaign on social networks, urging the public to deposit cryptocurrencies into their accounts.”Photo by Taylor Brandon on UnsplashBinance implicatedIn response, the Police Cyber Unit and the Ministry of Defense, with the cooperation of global crypto exchange Binance, located and froze these accounts, with the intention of diverting the funds to the state treasury.While the statement did not provide specific details about the number of accounts frozen or the value of the cryptocurrencies seized, it emphasized the government’s proactive efforts to counteract these activities.Hamas had been using cryptocurrencies as a fundraising method for some time, but in April, the group announced that it would discontinue receiving donations in Bitcoin, citing an increase in “hostile” activities against its donors.Binance has been cooperating with global law enforcement agencies and regulators to combat illicit activities, including those related to terrorism financing. A spokesperson for Binance stated:“Over the past few days, our team has been working in real time, around the clock, to support ongoing efforts to combat terror financing.”Unwelcome attentionThe exchange also mentioned that the data used to identify individuals and entities associated with specific organizations comes from intelligence provided by law enforcement and investigative tools developed in collaboration with partners.While Binance is cooperating with law enforcement on these matters, such specific attention is likely to be unwelcome. The exchange platform has been the subject of severe regulatory pushback internationally in 2023. Any suggestion of terrorist financing being enabled through the platform, even if unknowingly so, won’t be helpful to the business in overcoming its regulatory challenges.In the lawsuit taken against Binance by the Commodity Futures Trading Commission (CFTC) in the United States earlier this year, the CFTC claimed that Binance was aware that it had facilitated terrorist financing, specifically referring to Hamas-related transactions.Given that all eyes are currently on the activities of the Palestinian terrorist group, there could also be trouble for rival platform Bitfinex. According to a Wall Street Journal report earlier this year, Bitfinex Turkiye was alleged to have facilitated an account that was used by Hamas for money laundering purposes.Previous crypto seizuresThis action by Israel is not the first of its kind. In May, Reuters reported that Israel had seized approximately 190 crypto accounts on Binance since 2021, including two accounts linked to the Islamic State and dozens owned by Palestinian firms associated with Hamas.Binance responded to these developments by affirming its commitment to cooperate with law enforcement agencies and emphasized that it uses information available only to law enforcement to identify individuals involved in activities related to illicit organizations.

Dubai Regulator Suspends BitOasis’ Crypto LicenseDubai’s pioneering cryptocurrency exchange, BitOasis, has had its operating license suspended by the city’s cryptocurrency regulator for failing to meet key conditions within the required timeframes. The Virtual Assets Regulatory Authority (VARA) took enforcement action against BitOasis and initiated a review of the Dubai-based firm.BitOasis was granted a conditional license on April 12, which allowed it to operate on the condition that it met specific requirements within 30 to 60 days. However, the exchange has failed to fulfill these conditions, leading to the suspension of its license. VARA did not disclose the exact nature of the unmet conditions, but it stated that until they are satisfied, BitOasis’ “License for Institutional and Qualified Retail Investors” will remain non-operational.Photo by iridial on UnsplashFirst MVP broker-dealer license holderBitOasis had received the first “minimum viable product operational license” from VARA, enabling it to offer broker-dealer services to qualified institutional and retail investors in Dubai. This license represents a crucial step towards obtaining a full market product (FMP) license, but as of now, no firm has been issued an FMP license by VARA.To become eligible for the FMP license, BitOasis must fulfill the conditions specified in its current license, as outlined by VARA. The regulatory authority has emphasized its commitment to monitoring the situation for compliance remediation.OPNX reprimandThis recent development follows VARA’s reprimand of Su Zhu and Kyle Davies, the co-founders of the now-defunct crypto hedge fund Three Arrows Capital, in April. The duo had operated and promoted their new OPNX crypto exchange in Dubai without the necessary license, catching VARA’s attention.BitOasis addressed the regulatory concerns in a blog post on Tuesday, affirming its collaboration with VARA to meet the remaining conditions for the Operational MVP License. The exchange clarified that the issue with its license does not impact other services provided, such as broker-dealer services for existing retail users. It also took to Twitter on Tuesday to clarify the situation. The company has suspended new user registrations until further notice, presumably as it works towards meeting VARAs licensing requirements.BitOasis stated: “You can continue to use BitOasis with the assurance that your assets are safe, secure, and held at their full value on our platform, and our team will continue to cooperate with the Virtual Asset Regulatory Authority and fulfill all post-operational license terms, as well as working towards a full market product license.”The firm referred to the “unique challenges” that are associated with licensing and suggested that it is determined to address them and to “be a leader in the virtual assets sector.”The suspension of BitOasis’ license highlights the stringent regulatory environment in Dubai’s cryptocurrency sector. VARA is demonstrating that it remains committed to enforcing compliance and ensuring that crypto exchanges meet the necessary requirements. BitOasis must rectify the issues and meet the conditions of its license to regain its operational status and proceed towards obtaining the coveted full market product license in the future.

KCC sets guidelines for user protection on metaverse platformsThe Korea Communications Commission (KCC) has established its latest guidelines for ensuring the protection and safety of users of metaverse platforms, dubbed the “Basic Principles for the Protection of Metaverse Users”.Photo by GuerrillaBuzz on UnsplashNavigating the metaverse landscapeAlthough metaverse platforms can create new economic and business opportunities by linking reality with the virtual realm and providing users with a realistic and immersive experience, the agency argued that various problems may arise due to the use of anonymous profiles or avatars.In response, the KCC assembled six voluntary principles for metaverse service providers to apply to their operations through discussions with a policy advisory group for metaverse ecosystem user protection. The group is composed of 29 members, including academics, legal experts and domestic and overseas companies. It has been active since last year.Fostering ethical metaverse environmentsThe principles cover topics like ensuring free yet respectful communication between users; granting users a platform for voicing their opinions on issues related to their rights and interests; and ensuring that transactions involving digital products and services are conducted on proper terms. They also urge companies to give users the right to use and manage their own data along with that of the metaverse.On a less technical level, the last principle mentions that companies should make efforts to study the long-term impact of the metaverse on users’ physical and mental health, and on society, culture, environment and economy.The agency has also proposed to draft a code of practice outlining more specific measures to protect users, such as prohibiting sexual harassment and stalking, reporting and punishing cyberbullying and transferring the right to purchase NFTs.Responsible governanceMajor metaverse platform operators like Naver, SKT and Meta, who are members of the agency, agreed to apply the guidelines and include them in their relevant terms and conditions documents and service operation regulations. The KCC stated that it plans to monitor whether or not these commitments are met.Although not mandatory, the guidelines are recommended as measures to resolve user inconvenience, enhance service reliability and provide standards for user protection. User protection includes that of children, adolescents and personal privacy.