Korea’s Crypto Exchange Group Hires Data Security Professor as Advisor

While the crypto markets have not been immune to geopolitical developments, the sector in Iran experienced a more direct effect last week with a politically motivated $90 million exchange hack, prompting the authorities to introduce an exchange curfew. Blockchain analytics firm Chainalysis outlined on X on June 18 that Nobitex, Iran’s largest cryptocurrency exchange, had been hacked, with crypto assets to the value of $90 million having been drained from exchange-controlled wallets.Photo by Engin Akyurt on PexelsWeaponizing blockchain technologyThe hack had the hallmark of a politically-motivated attack given that rather than the digital assets being stolen, they were sent to vanity addresses, customized blockchain addresses involving user-defined sequences of characters. The vanity addresses contained “politically charged messages” and in sending the funds to them, the funds were effectively burned as they’re now permanently inaccessible.  The firm stated:”This incident highlights how crypto exploits aren’t always financially motivated. Bad actors can weaponize blockchain technology for geopolitical messaging, turning hacks into ideological statements rather than profit-driven crimes.” Pro-Israel hacker group Gonjeshke Darande, also known as “Predatory Sparrow,” appears to have carried out the hack, given that on June 18, it outlined on X that it would release Nobitex’s source code together with other internal information related to the firm’s internal network, while confirming that it had conducted cyberattacks against the company. The group made the following assertion:”The Nobitex exchange is at the heart of the [Iranian] regime’s efforts to finance terror worldwide, as well as being the regime’s favorite sanctions violation tool.” Rafe Pilling, director of threat intelligence at Sophos, a British cybersecurity company, told The Guardian that Predatory Sparrow “bears all the hallmarks of a false persona used by a government-sponsored threat group to conduct disruptive operations against targets” linked to the Iranian government. While Nobitex is estimated to have seven million users, an Open Source Intelligence (OSINT)-based investigation carried out in 2024 linked relatives of Ali Khamenei, Iran’s supreme leader, and other Iranian establishment figures to the crypto exchange. Minimizing systemic riskThe cyber attack has prompted a response from the Iranian government. In a blog post, Chainalysis outlined that the Central Bank of Iran has instructed all domestic crypto exchange platforms to curtail their service hours to between 10 a.m. and 8 p.m. The company speculated that this measure could be motivated by a desire to impose a higher level of oversight and control over the local crypto sector. However, it also suggested that it may be part of an attempt by the Iranian authorities to manage and minimize systemic risk. In recent years, Iran has been subject to extensive international sanctions applied by various entities including the United States, the European Union and the United Nations. Those sanctions have had a significant impact upon the country’s economy, triggering high inflation and currency devaluation.  With that, crypto has been increasingly viewed by the authorities as a means to circumvent sanctions. Last December, the Iranian authorities appeared to be working towards regulating crypto, embracing the asset class in acknowledgement of its growing importance to the Iranian economy. In February, Chainalysis reported that sanctioned entities worldwide had received $15.8 billion in crypto transactions in 2024.

Web3 Offers Potential for Japan to Rediscover its MojoEveryone recognizes that Japan has been at the forefront of innovation and the development of technology in the past but can it rediscover that cutting edge through Web3 and blockchain? In a recent interview with Forkast News, Yudai Suzuki, Co-Founder of a Tokyo-based Web3 incubator, suggested that it has that potential.©Pexels/邱 韬Re-establishing a competitive edgeSuzuki, who heads up Fracton Ventures, believes that such a pivot is possible for Japan in making Web3 the means through which it can rediscover the innovative edge it has been lacking in more recent years.Despite an historical strength and depth in technology and innovation, Japan has struggled when it comes to adopting and implementing new technology on a global scale more recently.Legacy techEarlier this year, it emerged that leading Japanese technology companies were collaborating with a view to creating a new open metaverse infrastructure called “Ryugukoku.” That project implicates the creation of a Japan Metaverse Economic Zone. Suzuki cites this project as demonstrative of a key issue relative to the overall development of Web3 in Japan.The project involves Japan’s legacy tech companies such as Fujitsu and Mitsubishi. He goes on to clarify that the majority of Web3 projects in Japan are being led by the existing technology behemoths despite the fact that Japan is seeing the emergence of a Web3-native generation.Suzuki identifies that one of the fundamental aspects of Web3 is that every decentralized autonomous organization (DAO) that’s created is immediately global in nature. Allied with that, most of that 18–25 year old Web3 native generation in Japan want to break through language barriers and communicate on a global basis.That outward looking characteristic is positive but it’s not how venture investment has traditionally worked in Japan. He explains that the conventional approach to investing in start-ups in Japan has been to first look to dominate the Japanese market before going global. The Fracton Ventures founder believes that this is a flawed approach in today’s world and that by the time they’ve gotten to number one in Japan, it’s already too late in trying to achieve that on a global basis.Government responsibilitySuzuki places much of the responsibility in affecting a more appropriate approach on the Japanese Government. “If they focus only on these huge Japanese companies, they will not succeed,” he says. He is also critical of the regulatory approach. Suzuki believes that “the government wants to change the laws and set new regulations at an early date,” and with that, such over-regulation has resulted in crypto entrepreneurs leaving the field. Regulation needs to be set on a more flexible basis so that it can be easily updated and upgraded as the technology develops.Global MindsetHe highlights the importance of having a global mindset and being open to different ideas and perspectives in order to succeed in the Web3 space. The entrepreneur points to that Web3-native demographic in Japan, explaining that their mindset has changed to a more global one as a consequence of dabbling in Web3. The same he believes is necessary on the part of the government if Japan is to become a leader in the tech industry once again.

Hong Kong SFC CEO Prioritizes Investor Protection in Crypto RegulationsAccording to a report by Chinanews, Julia Leung, Chief Executive Officer of the Hong Kong Securities and Futures Commission (SFC), participated in a seminar organized by the Hong Kong Academy of Finance (AoF). During the event, she emphasized the importance of investor protection in the formulation of guidelines for operators of virtual asset trading platforms.Photo by Kanchanara on UnsplashDevelopment of crypto in Hong KongAt the seminar yesterday, Leung discussed the development of virtual assets in the special administrative region of China. She recalled the pushback the SFC received in 2018 when it first proposed regulations for virtual asset trading platforms. Critics argued that the licensing system, demanding applicants to comply with stringent internal control and investor protection standards, might compel fintech companies to relocate their operations to other jurisdictions, such as Singapore.Market recognition of crypto regulationsDespite initial criticism, the market came to appreciate the importance of these regulatory standards, especially after witnessing the bankruptcy of several overseas cryptocurrency organizations.The guidelines for operators of virtual asset trading platforms in Hong Kong are set to take effect in June. Leung mentioned that these guidelines match market expectations and place emphasis on protecting investors. They encompass regulations for virtual asset custody, the segregation of client assets, and the avoidance of conflicts of interest. She also expressed satisfaction with the SFC’s role as a leading regulator in the virtual asset space.Crypto exchange ratingMeanwhile, Chinese blockchain news media Jinse Finance reported today the official establishment of the Hong Kong Virtual Asset Consortium (HKVAC), a private entity that rates virtual assets.It has also launched a virtual asset index and will introduce a virtual asset exchange rating system. The HKVAC Large Market Cap Cryptocurrency Index comprises the 30 leading cryptocurrencies by market capitalization. The index will be reviewed quarterly on the last day of each quarter (March, June, September, and December). The Virtual Asset Exchange Rating System will assess the credibility of trading platforms and enhance transparency and accountability in the virtual asset trading market.HKVAC was established by a team of industry experts and professional rating agencies. It brings together key stakeholders in the virtual asset industry, such as big data firms, exchanges, and institutional investors, along with the city’s licensed rating agencies. HKVAC aims to cultivate a secure environment for crypto investments and enhance the public’s understanding of virtual assets.