Coinbase Effects International Expansion By Extending Singapore Offering

Korean Supreme Court acquits Dunamu Chairman Song Chi-hyungThe Supreme Court of South Korea, in a significant ruling on Thursday (local time), acquitted Song Chi-hyung, chairman and principal stakeholder of Dunamu, of fraud and forgery charges, according to a report by local news agency Yonhap. This ruling is particularly noteworthy because Dunamu is the operator of the nation’s largest cryptocurrency exchange, Upbit.This decision, led by Justice Oh Kyung-mi, marks the culmination of a legal battle that began with Song’s indictment in Dec. 2018, and it extends to the acquittal of the company’s Chief Financial Officer (CFO) and the head of the Data Value Team, who were jointly indicted.Photo by Tingey Injury Law Firm on UnsplashBackground of the caseSong Chi-hyung and his colleagues were alleged to have fabricated an account on Upbit between September and November 2017. They had been accused of feigning the deposit of assets valued at KRW 122.1 billion and then employing these fictitious funds to enable transactions among actual members.The prosecution also leveled fraud charges against them, claiming that the fabricated account was utilized to sell 11,550 bitcoins to 26,000 members, thereby generating KRW 149.1 billion.The Seoul Southern District Court, acting as the court of first instance, found them not guilty. The court reasoned that the evidence presented by the prosecution was insufficient to establish that the defendants actually deposited the assets in the account.Issues with the prosecution’s evidence gatheringThe Seoul High Court, serving as the appellate court, identified problems with the evidence provided by the prosecution, determining that part of it lacked credibility due to improper collection methods. Notably, the court observed that the prosecution had directed Dunamu employees to access their Amazon cloud server to download the account’s transaction history. However, since this remote server was not included in the search and seizure warrant, the court highlighted the illegitimacy of the evidence.The appellate court also pointed out another issue with the evidence: documents stored on the CFO’s USB drive. The prosecution did not follow the legitimate search process, which requires them to extract only data related to the allegations. Moreover, the prosecutors did not present a warrant when confiscating the laptop of the Data Value Team’s lead, further undermining the credibility of their evidence.The court further stated that even if the remaining evidence provided by the prosecution was considered viable, it was still insufficient to substantiate the prosecution’s accusations.The prosecution, disagreeing with the decision of the appeals court, had escalated the case to the Supreme Court. However, the highest court in the nation sided with the ruling of the appeals court, effectively upholding the decision made at the appellate level.

The Monetary Authority of Singapore (MAS) is set to gain enhanced powers through the Financial Institutions (Miscellaneous Amendments) Bill 2024 (FIMA Bill), currently under consideration in the country's parliament.Photo by Kenneth Koh on UnsplashProfound impactIf the bill passes, it could have a profound impact on cryptocurrency firms operating in Singapore. One significant aspect of the proposed amendments is the expansion of MAS's authority to issue directives to capital markets services license (CMSL) holders involved in unregulated business activities. This move is particularly aimed at firms offering unregulated products that might pose contagion risks to their regulated operations. The bill cites examples such as bitcoin futures and payment token derivatives traded on overseas exchanges. At the moment, the regulator is actively monitoring the crypto space in Singapore, issuing investor alerts relative to unregulated entities. Last month, MAS added imToken, a non-custodial crypto wallet, to its Investor Alert List. The list serves as a means for the regulator to draw attention to entities that may be actively trading within the city-state while being wrongly perceived by the investing public as licensed or regulated entities. Greater powersIn response to potential risks, MAS had previously issued guidance on risk-mitigating measures for CMSL holders conducting unregulated business with retail investors. The FIMA bill seeks to empower MAS further by enabling it to issue written directions specifying the minimum standards and safeguards for CMSL holders and their representatives engaging in unregulated businesses. Cryptocurrency exchanges, potentially categorized as CMSL holders, along with Major Payment Institution (MPI) licensees, may face increased regulatory scrutiny. MAS has been active in implementing measures to curb speculation in cryptocurrency investments and has updated its regulatory framework for stablecoins. The bill introduces additional provisions empowering MAS to compel individuals to participate in interviews and provide written statements. It grants MAS the authority to enter premises without a warrant and obtain court orders to seize evidence. Furthermore, the bill allows MAS to approve agents appointed by foreign regulators for inspecting Singaporean financial institutions. Precursor to ETF offeringThe potential ramifications of the bill extend beyond local regulatory dynamics. Industry observers suggest a connection between these developments and the recent approval of spot bitcoin exchange-traded funds (ETFs) in the United States. Lasanka Perera, CEO of Independent Reserve Singapore, recently highlighted that the approval of bitcoin ETFs in the U.S. will likely attract major global wealth management firms, intensifying the demand for bitcoin and transforming it into an accessible asset class for traditional institutions. Perera sees relevance in this proposed legislation as it pertains to the potential offering of spot bitcoin ETF products within the Republic of Singapore. While he speculates that it's too early to tell, he said Singapore’s proposed new bill to enhance regulatory authority over financial services, including bitcoin futures, makes provisions for possible spot bitcoin ETFs in the Republic. As Singapore continues to refine its regulatory framework, the proposed amendments reflect a broader trend of regulatory tightening in the global cryptocurrency landscape, emphasizing the importance of compliance and risk management for industry participants. 

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.