South Korean police boost crypto team in fight against drug trade

Venture Smart Financial Holdings Ltd. (VSFG), a Hong Kong-based financial services company, is gearing up to initiate an exchange-traded fund (ETF) directly investing in bitcoin in the first quarter of this year.Photo by Kanchanara on UnsplashThat’s according to a report by Bloomberg on Friday. The move aligns with Hong Kong's strategic efforts to establish itself as a digital asset hub, and with that, the company plans to submit an application to the Securities and Futures Commission (SFC) for ETF approval. Brian Chan, the group head of investment and product at VSFG, expressed optimism about the potential of this market, setting a goal of achieving $500 million in assets under management by the end of the year. Long-term objectiveWhile the firm has taken the decision to focus on spot crypto ETFs amid a backdrop of spot bitcoin ETF approval in the United States earlier this month, it’s an objective the firm has been working on for some time. In June of last year, crypto media reported that VSFG were planning the launch of such a product. Notwithstanding that intention, the recent launch of several high-profile bitcoin funds in the United States, including offerings from BlackRock and Fidelity Investments, will likely assist the company in getting product approval in Hong Kong. Immediately following U.S. approval, a Hong Kong lawmaker suggested that the Chinese autonomous territory should respond proactively. Johnny Ng outlined that Hong Kong had to respond to secure its global position in developing the digital assets space in Hong Kong. Positive soundingsTowards the end of December, there appeared to be positive soundings on the possibility of spot bitcoin ETF approval in Hong Kong emerging from the local regulator. SFC CEO Julia Leung stated that the regulator was open to the notion of retail participation in spot crypto ETF products. Her comment was followed shortly afterwards by a joint announcement from the SFC alongside the Hong Kong Monetary Authority (HKMA) that they were prepared to accept applications for such funds. The approval process for such products typically takes weeks to months, following the precedent of traditional ETFs. Hong Kong presently permits futures-based crypto ETFs, with three already listed: CSOP Bitcoin Futures, CSOP Ether Futures and Samsung Bitcoin Futures. However, these funds have a combined asset value of around $50 million. Samsung Asset Management has not ruled out exploring the launch of a spot ETF, while CSOP Asset Management remains silent on the matter. VSFG is one of Hong Kong's first SFC-approved virtual asset managers, offering both traditional and digital wealth management services. Aegis Custody, a digital asset custodian, is in discussions with four asset managers about listing spot crypto products in Hong Kong. The regulatory requirements in the city may lead issuers to impose higher fees compared to the low management levies seen in many new U.S. spot bitcoin ETFs. Although bitcoin experienced substantial growth in anticipation of these U.S. products, it has seen a 10% decline since their trading commenced on Jan. 11. Nevertheless, many industry commentators expect a stronger bitcoin unit price in the medium to long term as a direct consequence of these products. 

On Wednesday, the Office of the Privacy Commissioner for Personal Data (PCPD) in Hong Kong launched investigations at six premises controlled by Worldcoin, the biometric cryptocurrency project established by Sam Altman, the CEO of OpenAI. Potential personal data privacy risksIn a statement, the Privacy Commissioner expressed serious concerns about potential risks to personal data privacy. The PCPD executed warrants as part of the inquiry into Worldcoin's identity verification project, particularly focusing on the use of iris-scanning orbs for identity verification. The PCPD urged Hong Kong residents to consider the implications of Worldcoin's biometric data collection and emphasized the importance of evaluating the legitimacy of such data collection. The Commission also advised individuals to inquire about the purpose of data collection, the intended use of the data, the classes of entities with access to the data, the retention period of biometric data and the safety measures implemented to protect sensitive information. "The PCPD is concerned that the operation of Worldcoin in Hong Kong involves serious risks to personal data privacy, and believes that the collection and processing of sensitive personal data by the relevant organization may be in contravention of the requirements of the Personal Data (Privacy) Ordinance," stated the privacy watchdog. The Commission highlighted that any personal data controlled by Worldcoin must be collected for a lawful purpose related to the project's function or activity, with the information collected from users' irises deemed sensitive according to regulatory guidelines.Photo by Harpreet Singh on UnsplashGlobal scrutinyWorldcoin, which commenced operations in 2021 and officially launched in July 2023, has faced regulatory scrutiny in various countries due to privacy concerns. As of December 2023, Worldcoin reported that over 5 million people had created accounts using their identities. However, the project's approach to identity verification through iris scanning has triggered investigations and actions by regulators. Notably, the project suspended services in Kenya and halted iris scans in India in response to regulatory challenges.  The company’s activities in the French and Brazilian markets have been suspended. Last year the UK’s Information Commissioner’s Office said that it would make further enquiries into the company’s activities. Meanwhile, the German data watchdog has been investigating Worldcoin since 2022. In an effort to clarify the efforts the company is making to achieve compliance across international jurisdictions where data privacy is concerned, Worldcoin recently published a blog post on the subject. Within it, the company states that it “is designed to be fully compliant with all laws and regulations governing data collection and data transfer." Despite its ongoing regulatory challenges, Worldcoin CEO Alex Blania remains steadfast in advancing the project's mission, stating recently:"We race toward billions of users as fast as we possibly can."  The project closed out 2023 by expanding into Singapore. The privacy concerns surrounding Worldcoin underscore the growing importance of balancing technological innovation with robust data privacy regulations to ensure the protection of individuals' sensitive information.

India’s Jio Financial Services to Delve Into BlockchainJio Financial Services (JFS), a subsidiary of Indian multinational conglomerate Reliance Industries (RIL), is gearing up to venture further into the realm of blockchain and central bank digital currencies (CBDCs), according to announcements made by Indian billionaire businessman and Reliance Chairman and Managing Director, Mukesh Ambani, during RIL’s 46th annual general meeting on Monday.Photo by Shubham Dhage on UnsplashBlockchain ambitionsThe Indian billionaire revealed his Web3-related plans, signaling a strategic move for JFS towards blockchain and centralized digital currencies. While addressing the AGM, Ambani emphasized his current caution regarding highly volatile crypto assets. However, he indicated that he aims to have Jio Financial delve deeper into blockchain technology and permissioned digital currencies, particularly the eRupee CBDC, which is undergoing advanced trials within India.JFS will serve as the entry point for Reliance Industries into the Web3 sector. Formerly known as Reliance Strategic Investments, JFS has been rebranded and will now facilitate management services for digital assets.Consolidating payment infrastructureAmbani’s vision for JFS encompasses the consolidation of payment infrastructure, a strategic effort to drive digital adoption throughout India. JFS hit the headlines in July when it was revealed that it was forging a major partnership with BlackRock, the world’s largest asset manager, valued at over $100 billion as of August 18.Ambani’s statement during the RIL annual general meeting highlighted JFS’s objectives: “JFS will consolidate its payment infrastructure further driving digital adoption for India. JFS products will explore pathbreaking features such as blockchain-based platforms and CBDC.”CBDC development has been ongoing through initiatives taken by central banks around the world over the past couple of years. The Reserve Bank of India (RBI) has been no slouch in this respect. It is actively engaged in developing its own CBDC, aiming to modernize online payment systems while reducing reliance on physical cash, thereby optimizing operational efficiency.In July, the RBI turned its attention to the cross-border functionality aspect of CBDCs, experimenting with various use cases relative to international payments. At a governmental level, India is also playing a key role in working towards global regulatory standards for cryptocurrencies. The RBI has contributed to the discussion, citing risks associated with stablecoins in a Financial Stability Report released in June and calling for global regulation.RIL CBDC initiativesNotably, Reliance General Insurance recently announced its acceptance of the eRupee CBDC for premium payments, and earlier this year, Reliance Retail initiated the use of India’s digital rupee CBDC across its Mumbai-based stores. The CBDC is anticipated to outperform India’s successful Unified Payments Interface (UPI) mobile payments system, according to V Subramaniam, Managing Director at Reliance Retail.Ambani’s RIL empire encompasses a diverse range of businesses, including Jio’s network services, retail stores, and fuel stations. Mukesh Ambani’s move to embrace blockchain and CBDCs will likely have broader implications beyond his own companies, given that it signals his intention to drive India’s digital transformation forward.