Korea’s FSS to Collect Public Comments on Financial Statement Guidelines for Virtual Asset Entities

Tether, the issuer of the USDT stablecoin, has teamed up with local partners in the United Arab Emirates (UAE) in order to launch a dirham (AED)-backed stablecoin. In a statement published to the firm’s website on Aug. 21, Tether outlined that the stablecoin is being launched in partnership with Dubai-based technology conglomerate Phoenix Group and Green Acorn Investments, a company that describes itself as “a socially responsible investment firm dedicated to supporting critical sectors and supporting the generation of sustainable wealth and financial literacy.”Photo by DrawKit Illustrations on UnsplashFully backed by AED reservesThe stablecoin issuer outlined that each token will be “fully backed by liquid UAE-based reserves.” Tether further maintained that the back-end management of the new token will adhere to the firm’s “transparent and robust reserve standards,” and that “every Dirham-pegged token is tied to the value of the AED, providing stability and confidence in its value.”  Tether dominates the stablecoin market where USDT accounts for $117 billion, against a backdrop of an overall stablecoin market valued at $169 billion.  Perennial skepticsThe company has perennially faced criticism for a lack of transparency relative to the backing of its USDT stablecoin, given its policy of providing attestation reports instead of fully comprehensive audits from a top-tier auditing firm. One of the firm’s critics, the pseudonymous X account @OccamiCrypto took to the social media platform to provide its reaction to this most recent development, stating: "This Tether UAE stablecoin 'launch' will likely be as real as Tether’s promised audit and real time reserve reporting." The Tether critic went on to claim that the announcement is nothing more than "Tether spin," and that Tether has never attempted to become regulated in any market and that nothing would come of it. Another Tether critic, freelance journalist Jacob Silverman, commented on the development on X, stating:”Russian businessmen in UAE must be rejoicing.” His comment is suggestive of a common assertion that Tether is being used to facilitate the circumvention of sanctions. According to the firm’s press release, it believes that the product will enable users locally to access the benefits of the AED in digital form. The company claims that it will “streamline international trade and remittances, reduce transaction fees, and provide a hedge against currency fluctuations, thus playing a crucial role in the financial ecosystem of the UAE and beyond.” Tether’s partner Phoenix Group has been active in the crypto-sphere in recent times through mining. In December of last year, the company sealed a $380 million deal with Chinese mining equipment manufacturer MicroBT. Earlier that month, the company went public on the Abu Dhabi Securities Exchange (ADX). On face value, this development appears positive. However, UAE-based crypto and blockchain lawyer Irina Heaver recently warned that tightening regulations within the UAE may shut down crypto payments within the country. Heaver specifically cited the use of USDT as being under threat, with the potential for stablecoin-based transactions to be prohibited as new rules are ushered in.  

The Royal Government of Bhutan has moved $66 million in Bitcoin (BTC) to global crypto exchange Binance. That’s according to blockchain data analytics firm Arkham Intelligence, outlining that the assets were moved to Binance over two separate transactions. The firm took to the X social media platform on Oct. 29 to highlight the digital asset transfer. In its X post, the firm wrote:”Crypto wallets belonging to the Royal Government of Bhutan moved $66.55M BTC to Binance this morning. The last time they deposited to exchanges was 4 months ago, at the start of July.”Photo by Moose Photos on PexelsSell-off concernsSome crypto community commentators have expressed concern of a sell-off given that the nation nestled in the Himalayas still has a holding of 12,456 Bitcoin, worth in the region of $900 million. The transfer was made on a day in which Bitcoin reached a unit price in excess of $73,000.  Arkham outlined that geographical data suggests that Bhutan’s Bitcoin mines remain active. On Oct. 29, they had accumulated $600,000 worth of Bitcoin mining rewards on-chain.  In this latest market activity, the Bhutanese began selling when the Bitcoin unit price had exceeded $70,000. As Bitcoin reaches towards new all-time-high pricing, Bitcoin whales often take profits. Mining Bitcoin since $5KIt emerged in 2023 that Bhutan had been quietly mining Bitcoin over the course of a number of years, since the leading digital asset had a unit price of around $5,000. The commercial activity has been enabled via Druk Holding and Investments (DHI), the commercial arm of the Royal Government of Bhutan. The Asian nation has ample hydroelectricity resources, being the only carbon-negative country in the world. Consequently, all its Bitcoin mining is carried out using hydro. While mining activity had been ongoing for a number of years and had largely gone unnoticed by the industry, an entanglement between DHI and failed crypto lenders BlockFi and Celsius brought more attention onto the Bhutanese holding company’s activities relative to crypto.  LawsuitsDHI was sued by BlockFi with the action subsequently voluntarily dismissed. In the case of Celsius it withdrew around $65 million from the platform prior to Celsius declaring bankruptcy. As a consequence, Celsius is currently suing DHI to claw back the funds that were removed from the platform. In 2023 Singaporean Bitcoin mining firm Bitdeer entered into a partnership with DHI with a view towards jointly developing green digital asset mining operation within the Kingdom of Bhutan. At the time, DHI CEO Ujjwal Deep Dahal said that the partnership formed part of an overall strategy to ensure that Bhutan took its place at the forefront of global innovation. Arkham Intelligence outlined on X that in H2 2023, Bhutan’s Bitcoin mining operations were producing in the region of 26 Bitcoin per day, or 780 Bitcoin per month. However, over the past three months, that mining rate has decreased to 8.6 BTC per day or 260 BTC per month. Arkham suggests that the Bitcoin halving, together with the increase in the Bitcoin hashrate, explains the reduced output, although it speculated that some unknown issue with Bitcoin mining rigs may also be a contributing factor. 

South Korea's Democratic Party of Korea (DPK) plans to introduce a bill this week aimed at establishing a legal framework for digital assets, according to Edaily. The move is part of the party's ongoing efforts to advance its crypto policy agenda ahead of the upcoming presidential election. The proposed law would define the legal status of digital assets and set rules for their issuance, distribution and listing. The bill is expected to keep the requirement for Korean won-pegged stablecoin issuers to obtain authorization with a minimum reserve of 5 billion won ($3.58 million), a key point of debate.Photo by Brady Bellini on UnsplashA DPK official stated that the bill has been drafted and is set to be introduced to the National Assembly this week, following feedback from internal subcommittees. Most of the provisions remain consistent with last month’s draft, but final comments are still being collected on stablecoin reserve requirements, which have been a major point of discussion. Defining digital assetsThe bill defines digital assets as "electronic records with economic value based on blockchain technology" and establishes a regulatory framework for issuers, exchanges and custodians. Key provisions include permitting initial coin offerings (ICOs) and creating a digital asset committee under the Financial Services Commission (FSC). This committee would oversee legal framework design, market monitoring, and policy promotion. Additionally, an industry association will establish a separate committee to oversee token listing practices, ensuring consistent listing standards across exchanges. The most contentious part of the draft has been the regulations for won-based stablecoins. It classifies stablecoins as digital assets akin to fiat currency, requiring a minimum reserve of 5 billion won and authorization from the FSC. It also mandates real-time reserve disclosures, secure asset custody and quarterly reporting. Divide over stablecoin reserve requirementOpinions on the reserve requirement are divided. Some industry insiders argue that the 5 billion won threshold is too high, creating a barrier for startups. Others believe a minimum capital requirement is necessary due to stablecoins' role in payments and their potential as currency substitutes. Lee Jung-yup, president of the Blockchain Law Society, stressed that stablecoins must maintain a basic level of trust, warning that those failing to meet the 5 billion won threshold could become prone to insolvency or fraud. However, Lee acknowledged concerns about the centralized regulatory approach led by financial authorities and the potential for market dominance by large corporations. He suggested exploring the creation of an independent regulatory body for cryptocurrencies, warning that overly strict regulations could stifle domestic digital finance innovation amid growing global competition. Crime surges with market growthWhile regulations continue to evolve, crypto crimes are also rising sharply amid the expanding digital asset market. According to Segye Ilbo, South Korean police arrested about 2,100 individuals for crypto-related offenses last year—17 times more than in 2017, when data collection began. The total losses from such crimes now exceed 1 trillion won ($714 million) annually. Since the election of U.S. President Donald Trump, known for his crypto-friendly stance, Korea's crypto market has experienced rapid growth. This surge has raised concerns about an increase in fraud targeting investors chasing quick profits.