VCs Say US Crypto Crackdown Opportunity for Asia

North Korea Using DeFi for Money LaunderingThe United States Treasury issued a warning on Thursday where it identifies North Korea as a user of DeFi services for money laundering. According to the Treasury, both North Korea and criminal organizations have been using DeFi platforms to launder dirty money.©Pexels/PixabayWhile DeFi has been praised for its potential to democratize finance and provide greater financial freedom to users, it has also been criticized for its lack of regulatory oversight. According to the Treasury, this lack of oversight has made DeFi platforms an attractive target for money launderers and other criminal organizations.In its warning, the Treasury noted that North Korea has been using DeFi platforms to launder money and evade international sanctions. The country is believed to have developed a sophisticated system for laundering money through cryptocurrency exchanges, and it is now turning its attention to DeFi platforms.Illicit money movementCriminal organizations are also using DeFi services for money laundering, according to the Treasury. These groups are said to be using DeFi platforms to move money around the world, in order to avoid detection and to launder the proceeds of their illicit activities.The use of DeFi for money laundering poses a significant challenge for law enforcement agencies, as these platforms operate outside of the traditional banking system and are often difficult to track. The Treasury has urged DeFi platforms to implement strong anti-money laundering (AML) and know-your-customer (KYC) policies, in order to prevent their services from being used for criminal activities.The warning from the Treasury comes at a time when DeFi is becoming increasingly popular among investors and users. According to data from DeFi Pulse, the total value locked in DeFi protocols recently surpassed $100 billion, indicating a significant level of interest and investment in the sector.Calls for greater regulationHowever, the lack of regulatory oversight and the potential for DeFi to be used for money laundering and other criminal activities have raised concerns among regulators and policymakers. Some have called for greater regulation of the sector, in order to prevent its abuse by criminal organizations.Despite these concerns, many proponents of DeFi argue that the sector has the potential to transform the financial industry and provide greater financial freedom to users. They point to the benefits of decentralized systems, such as greater transparency, lower fees, and faster transaction times.The use of DeFi for money laundering is a complex issue that requires a multifaceted approach. While regulators and policymakers must work to implement strong AML and KYC policies, users and investors must also take responsibility for ensuring that they are using DeFi platforms in a responsible and legal manner.Ultimately, the future of DeFi will depend on how the sector is able to balance innovation and regulation. While DeFi has the potential to transform the financial industry, it must also be subject to appropriate oversight and accountability in order to prevent its abuse by criminal organizations.By working together, regulators, policymakers, and industry stakeholders can help to ensure that DeFi is used for its intended purpose — to provide greater financial freedom and empowerment to users around the world.

Bitget Exec Speaks to Utility of Enhanced KYCCrypto continues to undergo significant transformation as regulatory authorities across Asia tighten their grip on the industry. In response to these regulatory changes, Seychelles-headquartered Bitget has joined KuCoin and OKX, which have recently bolstered their Know Your Customer (KYC) measures to ensure compliance and safeguard their operations.In a recent interview with Cointelegraph, Bitget Managing Director Gracy Chen spoke to the utility of KYC measures, stating that KYC is useful in filtering out illegitimate users, particularly those engaged in activities such as money laundering.Photo by Pixabay on PexelsMeeting Asian regulatory requirementsThe Seychelles-based exchange with ties to China and Singapore recently announced updates to its KYC protocols. These changes come in the wake of the Monetary Authority of Singapore’s (MAS) directives, which advise financial institutions, including cryptocurrency exchanges, to implement robust risk management procedures. The MAS has taken a stringent stance, shutting down certain digital payment token service providers to prevent them from facilitating lending and staking activities by retail customers.Starting from October 1, Bitget will require users who have not completed level 1 KYC verification to be restricted from creating new trading orders. This move aims to ensure that users comply with the newly updated guidelines and maintain the integrity of the exchange’s operations.Following industry peersKuCoin and OKX, two other prominent exchanges which, like Bitget, have their corporate headquarters in Seychelles and a strong presence in Asia, have also revamped their KYC policies. While KuCoin initially introduced KYC in 2018, the exchange has strengthened its identity verification procedures, requiring users to upload documents and complete face checks.Furthermore, in July, it announced a mandatory KYC requirement, in line with anti-money laundering (AML) regulations. While the mandatory KYC requirement is already in force, the other changes are set to take effect at the end of the month.OKX, on the other hand, has implemented stringent requirements, including the submission of a government-issued ID selfie for users to access all its services. The exchange recently set a deadline for service users to complete KYC.Bitget’s Chen highlighted that its decision to embrace KYC measures was driven by a commitment to serving the market responsibly. She acknowledged that while some users may have reservations about KYC, it is a necessary step to maintain the integrity of the exchange and prevent illicit activities. Speaking at the fringes of the firm’s EmpowerX Summit in Singapore, Chen said:“I’m pretty sure if the user is a financially healthy user, such as, like, if they’re not doing something illegitimate, such as money laundering, they should be pretty comfortable with the KYC process.”Tightening regulationThe tightening of regulations in Asia is not limited to Singapore alone. Japan has also taken steps to enhance anti-money laundering measures related to cryptocurrency transactions, responding to international calls for stricter oversight. Additionally, South Korea’s Financial Services Commission (FSC) has announced plans to require companies to disclose details about their cryptocurrency holdings, expected values, and related business models in their financial statements, aligning crypto accounting with conventional financial reporting.These regulatory developments signify a broader trend in the region, with cryptocurrency service providers proactively adapting to the changing landscape. As governments and regulatory authorities take steps to address the potential risks associated with cryptocurrencies, exchanges are prioritizing compliance to ensure their longevity and continued growth.

Incheon Partners with Daehong to Implement Web3-Driven Urban Marketing StrategyIncheon Metropolitan City, renowned for its international airport in South Korea, has partnered with Daehong Communications, a marketing solutions subsidiary of the country’s retail giant Lotte Group, to leverage Web3 technology for the purpose of promoting the city.Daehong has established an extensive global network within the blockchain industry. Among its notable partners are layer 1 blockchain Aptos, Metaverse company Animoca Brands, and decentralized social protocol CyberConnect. One of Daehong’s primary initiatives is the NFT project associated with Bellygom, a pink bear character of Lotte Homeshopping, a media commerce affiliate of Lotte Group.Photo by Daesun Kim on UnsplashHarnessing blockchain for city promotionThrough this collaborative effort, Incheon aims to harness blockchain technology to explore innovative ways of promoting the city and building stronger connections with its residents.Incheon has recently been very dedicated to Web3 initiatives in promoting the city. Last month, it worked with The Sandbox, the virtual gaming platform of Animoca Brands, to create a metaverse representation of the Incheon Landing Operation to commemorate the 70th anniversary of the Korean War Armistice Agreement. More recently, the city unveiled its NFT membership program named “Incheon Heroes,” demonstrating its commitment to pioneering its unique path in the era of Web3.Daehong’s role in Web3 adoptionIn the private sector, Daehong has been working towards the widespread adoption of Web3. The marketing firm introduced business models that integrate NFTs into areas that have significant public engagement, such as ticketing, memberships, and brand characters. Daehong has been actively working to facilitate many brands’ entry into the Web3 space.Lee Se-woong, Brand Manager of Incheon City, anticipates that the collaboration with Daehong will serve as a fresh catalyst for Incheon, expressing excitement about the potential synergies between Incheon’s public infrastructure and Daehong’s industrial expertise.Incheon is set to initiate a range of projects by leveraging the Incheon Heroes NFT membership program and the Incheon Universe, a virtual space that allows visitors to immerse themselves in various facets of the city. Furthermore, the city is in the process of establishing collaborations with enterprises, brands, and artists who share a common interest in promoting the sustainability of both the planet Earth and the city itself.