Flybit Achieves Top Score in FIU’s Anti-Money Laundering Assessment

South Korea’s Financial Supervisory Service (FSS) has initiated on-site consultation services for virtual asset businesses to help them comply with the upcoming Virtual Asset User Protection Act (Virtual Asset Act), which is set to be effective in July. This news was reported yesterday by local media outlet News1. Photo by Hunters Race on UnsplashSupporting VASPs in preparation for the Virtual Asset ActThe consultation services offered by the FSS are fundamentally different from the on-site inspections that have been conducted by the Financial Intelligence Unit (FIU).  Until now, the FIU has been conducting on-site inspections to ensure virtual asset service providers (VASPs) have adequate anti-money laundering (AML) systems in place and comply with the Act on Reporting and Using Specified Financial Transaction Information (the Financial Transaction Information Act). While the FIU has been tasked with conducting inspections, the FSS’s latest on-site consultation services are dedicated to supporting businesses in developing new monitoring systems, which would enable them to prevent unfair transactions ahead of the implementation of the Virtual Asset Act. The FSS has already begun providing consultation services, with the local crypto exchange Upbit being its first client last week. An insider of FSS stated that the schedule for the on-site consultation will be arranged in advance for those seeking the service.  Demand for new FDSDuring a roundtable meeting with VASP CEOs held on Feb. 7, Lee Hyun-deok, the director of the Virtual Asset Regulatory Bureau under the FSS, emphasized the importance of coming up with a new fraud detection system (FDS) specifically designed to block unfair transactions. Most of the current FDSs within local crypto exchanges are focused on AML.  Unlike the Financial Transaction Information Act which mainly focuses on AML, the Virtual Asset Act focuses on punishing unfair trading practices that exploit abnormal price fluctuation or undisclosed information. The FSS recommends that VASPs implement a new system preventing such practices by April, as the Virtual Asset Act’s enactment is just around the corner.  An FSS insider said there is a high chance that VASPs will get the consultation service multiple times on various themes since a lot has to be done before the Act takes effect in July, adding that this consultation is to encourage VASPs to comply with the law rather than to conduct inspections on them. 

Deputy Prime Minister and Minister for Finance Lawrence Wong is slated to unveil the Singapore 2024 Budget Statement on Feb. 16. As Singapore prepares for the unveiling of its 2024 Budget, the city-state’s Web3 community is amplifying its call for crucial government backing. That’s according to a recent report by The Straits Times. The plea from Singaporean firms revolves around two pivotal areas: one, nurturing a proficient talent pool well-versed in blockchain technology; and, in addition to that, having a strength and depth in cybersecurity, so as to fortify defenses against cyber threats.Photo by David Pardo Bernal on UnsplashUrgent need for Web3 talentSome time ago, stakeholders in Singapore set out their stall in terms of the ambition of firmly establishing the city-state as a global hub for Web3 development. It’s off to a good start with many notable crypto and Web3 companies having established themselves in Singapore. However, broadening that industry hub to the fullest extent will involve overcoming the significant hurdles hindering the growth trajectory of Singapore’s Web3 sector. Top of the list is the scarcity of skilled professionals in the blockchain domain. Danny Lim, a core contributor at MarginX, a decentralized exchange, stressed the pressing demand for seasoned developers. Lim underscored the necessity of supporting Web2 developers transitioning into Web3 realms, especially those grappling with job displacement, to solidify Singapore’s status as a nucleus for groundbreaking blockchain ventures. Elaine Zhu, the general manager of the Asian division of blockchain infrastructure firm Parity Technologies, emphasized the critical need for blockchain education, expressing apprehension over the dwindling influx of new developers. In citing a recent report by crypto-focused venture capital firm Electric Capital which quantified developer activity across Web3, Zhu noted that the number of experienced developers in Singapore remains healthy. However, the report found that the number of newly qualified developers dropped by 52 percent last year. Bolstering cyber defensesAdditionally, the industry is clamoring for fortified cyber defenses to shield against the escalating threat landscape targeting digital assets. This focus on security underscores the broader challenge of ensuring the secure proliferation of Web3 technologies and digital currencies within Singapore’s technological ecosystem. A report by Singapore-based blockchain security firm Beosin last year found that exit scams are a growing concern in the crypto-sphere. At the end of last month, the Singapore Police Force, alongside the Cyber Security Agency of Singapore (CSA), issued an advisory in order to raise awareness regarding crypto-centric cyber attacks. Ong Chengyi, representing Chainalysis, hailed Web3 as pivotal for long-term growth and advocated for sustained governmental support to enhance the sector’s capability in mitigating risks using advanced technological solutions. Ong remarked:“We hope to see more public-private collaboration to bolster Singapore’s defences against crypto crime and cyber threats more generally, through the utilization of data and technology.” Angela Ang of TRM Labs echoed that sentiment, emphasizing the imperative for heightened regulatory support to nurture the expansion of digital assets. Ang stated:“To deliver clarity to businesses at scale, whether it’s through licensing decisions or implementation guidance, the Government must invest in both human capital and technology throughout the regulatory process.” 

Nomura Subsidiary Launches Bitcoin Adoption FundNomura, Japan’s largest investment bank and brokerage group boasting over $500 billion in assets, has ventured further into the world of digital assets by unveiling its Bitcoin Adoption Fund through its digital asset subsidiary, Laser Digital Asset Management.The move signifies a further commitment from the Japanese financial services conglomerate in embracing digital innovation within the financial sector. The fund will cater specifically to institutional investors looking to explore the expanding area of digital assets.Photo by Kanchanara on UnsplashEnabling long-term Bitcoin exposureLaser Digital Asset Management is introducing the Bitcoin Adoption Fund as the first installment in a series of digital adoption investment solutions crafted with institutional investors in mind. The firm announced details of the new fund via a press release published to its website on Tuesday.The primary objective of this fund is to provide institutional investors with a long-term avenue for exposure to Bitcoin, enabling them to partake in the potential gains offered by the world’s most well-known digital asset.Sebastian Guglietta, Head of Laser Digital Asset Management, underscored Bitcoin’s pivotal role in ushering in a transformative global economic shift and posits that long-term exposure to Bitcoin is the ideal means for investors to harness this profound macroeconomic trend.“Technology is a key driver of global economic growth and is transforming a large part of the economy from analogue to digital,” Guglietta said. “Bitcoin is one of the enablers of this long-lasting transformational change and long-term exposure to Bitcoin offers a solution to investors to capture this macro trend,” he added.Komainu partnershipIn bringing the fund to market, Laser Digital has partnered with digital asset custodian Komainu. Komainu was founded in 2018 as a collaborative endeavor between Nomura, Ledger, and CoinShares.Nomura’s foray into digital assets is by no means a newfound interest. As early as September 2022, the firm had initiated its digital asset venture capital arm, positioning itself at the vanguard of digital innovation. In addition to this, Laser Digital secured a trading license from Dubai’s Virtual Asset Regulatory Authority (VARA) to operate within the United Arab Emirates (UAE).Nomura’s launch of the Bitcoin Adoption Fund is in perfect alignment with the broader trend of heightened institutional interest in Bitcoin-centric investment products. Regulatory bodies globally have granted approval for a range of Bitcoin-focused investment products in recent years, including Bitcoin-based futures exchange-traded funds (ETFs). These developments underscore the growing acceptance of cryptocurrencies within traditional finance circles.Laser Digital was founded by Nomura executives Steven Ashley and Jez Mohideen. Ashley previously led Nomura’s wholesale division while Mohideen was Nomura’s Chief Digital Officer and Co-Head of Global Markets for the EMEA region. The firm has invested in Singapore-based DeFi startup, Solv Protocol.It has registered as a mutual fund via the Cayman Islands Regulatory Authority, while the company has registered for product marketing purposes in Ireland, Luxembourg, and the UK.