Web3 chatting app Beoble launches beta version with 50,000 users

Crypto Winter Halves Korean Bank Fee ProfitsLast year, Korean banks collected only half the amount in fees from crypto exchanges compared to the previous year, according to Korean news agency News1.©Pexels/PixabayDeclining bank fee profitsFiles submitted by the Korean Financial Services Commission to Yun Chang-hyun, a member of the ruling People Power Party, revealed that the five major Korean crypto exchanges paid 20.4 billion KRW (~$15.6 million) in fees to banks last year, which is a 49.4% decrease from the previous year’s 40.3 billion KRW (~$30.7 million). These exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax) have established agreements with banks to hold real-name bank accounts, which is a legal requirement for exchanges that wish to conduct trades in Korean won.Banks that have provided real-name accounts to crypto exchanges saw an increase in fee profits from 2019 to 2021. However, due to a decline in market sentiment last year, trade volume decreased, resulting in a reduction of bank fees. Last year’s crypto winter is attributable to various factors, including uncertainties in the global economy and collapses of crypto enterprises such as Terraform Labs and FTX.Fees by exchangesIn terms of fees paid to banks by exchanges last year, the largest exchange, Upbit, paid 13.9 billion KRW (~$10.6 million) in fees to Kbank, a mobile banking service provider. Bithumb and Coinone paid 4.9 billion KRW (~$3.7 million) and 989 million KRW (~$750,000) in fees to NH Bank, respectively. It is worth noting that Coinone switched its bank from NH Bank to Kakao Bank last November, paying 72 million KRW (~$55,000) to Kakao Bank in the fourth quarter. Korbit paid 486 million KRW (~$370,000) and 19 million KRW (~$14,500) to Shinhan Bank and Jeonbuk Bank, respectively. Gopax partnered with Jeonbuk Bank to obtain its real-name accounts in April last year.Lawmaker Yun said it was apparent that partnerships were being forged between only a handful of banks and crypto enterprises. Current regulations have to be reviewed to encourage more banks to participate in various blockchain businesses, he added.

Korea’s FSC Embarks on Developing Regulatory Framework for VASPsThe South Korean Financial Services Commission (FSC) has taken a step towards the development of a virtual asset regulation system by seeking external parties to undertake a research project in this area, according to local news agency News1.Photo by Joshua Miranda on PexelsSecond phaseEarlier this month, the National Assembly passed the Virtual Asset User Protection Bill, aimed at protecting investors and preventing unfair trading practices. This legislative accomplishment, scheduled to go effective in July next year, is referred to as the “first phase” of virtual asset regulations. Building upon this foundation, the FSC has now shifted its focus to the “second phase,” which involves the regulation of virtual asset service providers (VASPs).Regulating VASP operationsOne primary concern regarding VASPs is the potential for conflicts of interest arising from their involvement in the issuance and distribution of virtual assets. In response, the FSC is determined to design a regulatory framework that covers a wide range of virtual assets, including stablecoins, security tokens, and utility tokens.In addition to this, the FSC intends to establish a system that governs advisory and disclosure businesses, which will play a crucial role in disseminating information about asset prices and disclosures.Moreover, the regulatory system will include guidelines for holding parties accountable in case of incidents and for overseeing the operations of VASPs to maintain a safe and fair market environment.The FSC acknowledges the significance of aligning policies with international standards. To achieve this, the commission will conduct an examination of virtual asset regulatory approaches taken by different countries and international organizations. Through this study, the FSC aims to integrate global best practices and approaches into Korea’s own regulatory framework for virtual assets.Once the study is complete, the FSC has to report the result to the National Policy Committee of the National Assembly by July 2024 before the Virtual Asset User Protection Bill goes into effect.

MAS Offers Guidelines for Banks Handling Crypto-Related ClientsThe Monetary Authority of Singapore (MAS) has released a comprehensive set of guidelines to assist banks in managing clients who are involved in digital assets, such as cryptocurrency exchanges or individuals whose wealth is derived from cryptocurrencies.Photo by Meriç Dağlı on UnsplashIndustry working groupAccording to a report in local media source, The Straits Times, these non-mandatory guidelines, developed by an industry working group, aim to provide best practices for financial institutions to address concerns related to money laundering, terrorism financing, and sanctions risks associated with cryptocurrencies.The working group suggests that enhanced due diligence may be necessary for firms closely connected to facilitating crypto transactions. For instance, conducting site visits or walk-throughs of a client’s anti-money laundering and anti-terrorism financing processes and controls could be required.During the onboarding process, banks should request information documenting the customer’s crypto exposure and the intended usage of the account. Additionally, banks are advised to establish the source of the client’s funds or wealth.To evaluate the regulatory status of a merchant customer’s crypto-related counterparties, especially if they contribute significantly to the merchant’s transactions, banks should conduct thorough assessments.The working group also highlights the use of blockchain screening tools to review the on-chain activity of digital token payment service providers. Regular screening of new and existing wallet addresses owned or controlled by these providers against the sanctions list and designated wallets is also recommended.Comprehensive guidelinesLoretta Yuen, Head of Legal and Compliance at Oversea-Chinese Banking Corp (OCBC), a Singapore-headquartered bank, describes the guidelines as one of the most comprehensive in the world, providing insights into banks’ management of crypto-related money laundering, terrorism financing, and sanctions risks.She believes the guidelines will raise awareness among prospective customers regarding the key risk considerations banks prioritize and enable customers to proactively fulfill banks’ customer due diligence requirements during the onboarding process.Evy Theunis, DBS Bank’s Head of Digital Assets, views the guidelines as a codification of best practices across the industry, aligning with the bank’s existing protocols. United Overseas Bank (UOB) also acknowledges the benefits of the best practice paper, particularly given the diverse range of digital assets with varying levels of risk.Eight participating banksThe working group responsible for developing these guidelines includes representatives from eight banks, MAS, the Commercial Affairs Department, and Big Four audit firm Ernst & Young. Formed in August 2022 under the anti-money laundering and countering the financing of terrorism industry partnership (ACIP), the group aims to identify, assess, and mitigate money laundering and terrorism financing risks in Singapore through a collaborative private-public partnership involving the financial sector, regulators, law enforcement agencies, and other government entities.Singapore is vying to establish itself as a hub for digital asset business in Asia, alongside other centers such as Hong Kong. The Chinese autonomous territory has been making greater progress over the course of the past year.However, a report in The Wall Street Journal on Monday suggests that banking remains a difficulty for crypto businesses in Hong Kong. Hong Kong’s difficulty may be Singapore’s opportunity, given the work that this working group has carried out in smoothing the way for the banking of digital asset-related businesses.