Korea’s Bithumb joins forces with Interpol to fight crypto crime

Thailand Pushes Back Against Facebook-Enabled Crypto ScamsThai authorities are contemplating serious action against social media giant Meta (formerly Facebook), as Thailand battles against fraudulent cryptocurrency schemes and misleading investment advertisements propagated through Facebook, given a rise in the occurrence of such scams.Photo by Dan Freeman on Unsplash200,000 victimsThe Ministry of Digital Economy and Society (MDES) in Thailand has revealed that over 200,000 individuals in the country have fallen victim to fraudulent Facebook advertisements, which tout promises of massive returns through crypto-related investments and other financial opportunities. These deceitful ads have preyed on unsuspecting users, leading to growing concerns about online safety and consumer protection.The fraudulent adverts often make outrageous claims, guaranteeing daily profits as high as 30%. To add credibility, scammers even resort to using images of celebrities and renowned figures from the financial industry as fabricated endorsements. Some ads have gone to the extent of replicating the logos and symbols of the Thailand Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand to establish an appearance of legitimacy.Inadequate responseChaiwut Thanakamanusorn, Minister of MDES, acknowledged that the ministry has engaged in discussions with Facebook regarding the alarming prevalence of these fraudulent ads on its platform.Thanakamanusorn stated: “In the past, the ministry talked to Facebook all the time, but did not screen advertisers, causing damage to Thai people of more than 100,000 million baht.” Despite sending a letter to the platform requesting the removal of more than 5,301 misleading advertisements, Facebook’s response has been inadequate in addressing the issue effectively.In the face of Facebook’s reluctance to take appropriate action against these fraudulent ads and the substantial financial damage amounting to $2.8 million, MDES has issued a stern warning. Should Facebook fail to rectify the situation, MDES is prepared to pursue a court-issued shutdown order against the platform within a span of seven days.To protect the public from falling victim to these scams, MDES has advised individuals to exercise caution when encountering ads that promise exorbitant profits. Moreover, users are urged to be skeptical of endorsements from celebrities, as these images are often manipulated to deceive the public. The ministry also emphasized the importance of verifying the credentials of businesses and platforms before engaging with them.Safeguarding investorsThailand’s regulatory efforts in the cryptocurrency domain have taken a cautious trajectory. Thailand’s Securities and Exchange Commission (SEC) has stepped up its efforts to safeguard investors from crypto scams by instituting stringent guidelines against deceptive crypto marketing.As part of those guidelines, the SEC stated: “It is forbidden to advertise or persuade the general public or do any other act in the manner of supporting the deposit taking & lending service.” Acknowledging the inherent volatility of the crypto market, the SEC has mandated risk-related disclosures for all crypto trading platforms.With Facebook boasting around 48.1 million users in Thailand as of January 2023, the platform holds substantial influence, making the resolution of this issue even more critical. Striking a balance between innovation and regulatory measures is imperative to ensure that online spaces remain safe and conducive to a healthy crypto market.

Dubai-headquartered crypto derivatives trading platform Bybit has moved to enable stock trading on its platform.  The offering, initially featuring 78 stocks, is being provided via Bybit’s MT5 platform, which includes access to various financial instruments including forex, commodities, contracts for difference (CFDs) and crypto, according to an announcement made by the company last week.Photo by Ishant Mishra on UnsplashStock derivatives via CFDsIndividual stocks are being offered in a pairing with U.S. dollar stablecoin USDT. Bybit’s MT5 is a trading platform originally developed by software company MetaQuotes, facilitating the integration of various asset classes within one platform. Enabled through the use of CFDs, holders of such stock-derived CFDs can receive dividend adjustments based upon the ex-dividend events of the underlying stocks. A trading fee of 0.04 USDT has been set, with a minimum charge of 5 USDT per order. Access to leading global equitiesBybit users will now be able to gain exposure to leading U.S. equities such as Apple (AAPL), Amazon (AMZN), Meta (META), Microsoft (MSFT) and Nvidia (NVDA). By adding this product to its multi-asset trading platform, Bybit has reduced a degree of friction for market participants. In pairing these stocks with USDT, it means that there is no fiat onboarding required and transferring funds in fiat from outside the crypto ecosystem is not required. In a press release, the firm asserted that the development was a “landmark move bridging traditional and decentralized finance.” Bybit further asserted that with this product launch, it has become “the first and only major crypto exchange to unify crypto, stocks, and traditional assets under one roof.” Previous offeringsA few years ago, global crypto exchange platform Binance had offered tokenized stocks through a partnership with German global financial services firm CM-Equity AG. However, it withdrew that product offering in 2021 when faced with growing regulatory pressure.  Failed crypto exchange FTX also offered its users exposure to tokenized stocks, which was also facilitated by CM-Equity AG. That product offering came to an abrupt halt in November 2022 when the platform collapsed. With a more positive regulatory position having been adopted in the United States following the election of U.S. President Donald Trump, tokenized stock offerings are emerging once again. In March Coinbase CFO Alesia Haas said that the Securities and Exchange Commission (SEC) could facilitate such offerings going forward. The U.S. crypto exchange platform has revived plans to tokenize its own COIN stock, alongside other securities.Bernstein analysts recently predicted that the crypto sector is moving towards integrated platforms that offer both traditional financial products alongside digital assets. Further evidence of this approach emerged on May 22 with the news that global crypto exchange platform Kraken plans to add access soon to a range of tokenized stocks for its global user base.  The company’s U.S. clients can already access in excess of 11,000 stocks and exchange-traded funds (ETFs). Blurring the lines further between TradFi and the digital assets space, JPMorgan CEO Jamie Dimon indicated last week that the investment bank will facilitate Bitcoin trading for clients from now on.

Korean Experts Advocate for Global Crypto Info Exchange to Combat Tax EvasionIn a recent event held to discuss the tax regime in South Korea, law professors offered a suggestion to combat tax evasion associated with cryptocurrencies. They proposed the implementation of a global cryptocurrency information exchange system for more effective response measures.Kim Beom-jun, a professor at the University of Seoul Law School, and Kim Seok-hwan, a professor at Kangwon National University Law School, delved into this matter last Friday at the tax administration forum that took place at the Korea Federation of Small and Medium-sized Enterprises (KBIZ).Photo by Karolina Grabowska on PexelsRising crypto adoptionAccording to their report, the cryptocurrency market is currently facing challenges stemming from the Terra-Luna incident and the broader economic downturn caused by rising interest rates and inflation. However, it’s worth noting that in Korea alone, there are approximately 6.27 million cryptocurrency exchange users, with a collective market capitalization of around KRW 19.4 trillion ($14.6 billion). This suggests that cryptocurrencies continue to integrate into our everyday lives.Crypto tax starting in 2025Starting in 2025, South Korea is set to impose taxes on income from cryptocurrency trading. However, before the tax is put into effect, there is a pressing need for administrative enhancements aimed at preventing tax evasion involving cryptocurrencies. These initiatives encompass the development of crypto-tracking technology and the allocation of sufficient staff and budgets to enable tax authorities to effectively address crypto-related issues.Foreign exchanges and DeFi platformsDuring the forum, experts voiced concerns about the possibility of tax evasion through the use of overseas crypto exchanges and decentralized platforms.Tax specialists pointed out that it’s difficult to expect people to fully meet their tax obligations when they’re trading on international exchanges. They also emphasized the challenges in collecting accurate tax information from crypto users who report transactions in overseas financial accounts.OECD’s initiativeIn August 2022, the Organization for Economic Co-operation and Development (OECD) gave the greenlight to the Crypto-Asset Reporting Framework (CARF). This framework aims to standardize the reporting of tax information related to crypto-asset transactions and facilitate the automatic exchange of such information. During the forum, researchers proposed that in the future, if Korea decides to participate in the OECD’s CARF, it should not only establish a cooperative system between virtual asset service providers (VASPs) and regulatory authorities but also revisit and amend pertinent laws.Additionally, presenters at the forum underlined the necessity of obligating taxpayers to furnish essential tax information for effective virtual asset taxation. They also stressed the importance of implementing appropriate sanctions in cases where taxpayers fail to comply with these reporting requirements.Commissioner Kim Chang-ki of the National Tax Service (NTS) stated that the agency is committed to enhancing tax accountability and transparency. He added that the NTS will take strong measures against malicious tax evasion activities, especially those involving online platforms.Furthermore, Commissioner Kim mentioned that the tax agency is boosting its investigative capabilities using scientific methods to combat emerging forms of tax evasion, like those related to virtual assets. He also said the NTS is expanding its international collaboration and devising other measures.