Ripple Receives In-Principle Approval From Singaporean Regulator

Phemex, a Singapore-headquartered crypto derivatives trading platform, has halted withdrawals following a multi-million dollar hack.Photo by GuerrillaBuzz on UnsplashHot wallet compromisedIn a message to platform users published to social media, the project stated: “To ensure security, withdrawals have been temporarily suspended while we conduct an emergency inspection and strengthen wallet services. We sincerely apologize for the inconvenience. Withdrawals will be restored soon.” In further commentary, the project apologized for the disruption, assuring service users that its mission remains to provide a trusted trading environment, while outlining that it is working on putting together a compensation plan. It added that “Our ongoing business operations are fine,” and that “trading services continue as usual.” The digital assets were removed from the platform over multiple blockchains including Polygon, Arbitrum, the Base network and BNB. Blockchain analytics firm Lookonchain itemized some of the assets that are believed to have been stolen. They include 3.48 million USDC stablecoin, 3.42 million USDT stablecoin, 841 ETH valued at $2.7 million, 110,701 LINK valued at $2.69 million, 142 billion PEPE tokens valued at $2.12 million, 1.19 million FET tokens valued at $1.45 million and 29,509 AVAX tokens valued at $1.04 million. Initial reports put the loss at $31 million. However, Web3 security firm Cyvers later claimed that $37  million covers the full extent of the loss. Following deeper analysis, it found that both Bitcoin and TRON blockchains had also been impacted, resulting in the overall loss being increased by a further $6 million. Cold wallet assets are safeThe company’s CEO Federico Variola, published a post on X advising service users that all of the assets held within the company’s cold wallets remain safe. He included a link to the Phemex proof of reserves, encouraging customers to check it. In a follow-up post, he wrote: “We are currently carefully testing our system to reprise withdrawals as soon as possible. Due to the sophistication of the threat actor we cannot rush this stage. The estimated timeline to reprise full operations is within 24h, thank you for your support.” The XNET Foundation, a non-profit entity that develops decentralized wireless networks, said that it is actively working with the Phemex team on the production of an exploit report following the incident. It added that “It has been confirmed that tokens sent to the exchange for a launchpad pool were compromised as part of this exploit.” Ongoing problemCrypto hacking remains a major concern within the digital assets sector. Blockchain security firm PackShield reported recently that $1.3 billion had been laundered from crypto hacks in 2024. That statistic demonstrates that the problem is worsening as it accounts for a $342 million or 280% increase when compared with 2023. In December a Chainalysis report found that 61% of the hacking losses suffered in 2024 implicated the involvement of North Korean hackers. It estimated crypto hacking losses of $2.2 billion for 2024, based on losses associated with 303 hacking incidents.

Singapore-headquartered cryptocurrency exchange platform Crypto.com is making a move to further its global reach through an application for a virtual asset trading platform (VATP) license with the Hong Kong Securities and Futures Commission (SFC). Application via Fortis DAX HK LimitedA number of months ago, the SFC established a list of both licensed platforms and license applicants. Crypto.com is the latest entity to appear on that list through a locally incorporated entity, Fortis DAX HK Limited. The application was made on Feb. 9, 2024. In this pursuit of regulatory approval in Hong Kong, Crypto.com now joins 16 other exchanges, including notable players like Bybit, Bullish, OKX and VAEX.Photo by Jie Yeu Teoh on UnsplashRegulatory ultimatumThe urgency to obtain a VATP license has become more immediate, given the regulatory ultimatum issued by the SFC recently. A stern warning from the Hong Kong regulator has been issued, mandating that exchanges must apply for the said license by Feb. 29, 2024, with a looming shutdown deadline of May 31, 2024, for those that fail to comply.  Currently, only two platforms, OSL and HashKey Exchange, hold the coveted licenses, underscoring the rigorous process and the importance of compliance in operating within the Hong Kong market.  Despite recent approvals of spot bitcoin exchange-traded funds (ETFs) in the United States and the acceptance of applications for similar products in Hong Kong, regulators are once again asserting their authority in the crypto space, demanding stringent compliance measures to safeguard investors and combat financial crimes.  Julia Leung, the chief executive officer of the SFC, emphasized the importance of regulatory oversight in today's landscape, highlighting the need to protect investors and hold wrongdoers accountable.  In light of these developments, the SFC has issued a cautionary advisory to investors, urging them to verify the regulatory status of the platforms they engage with. While exchanges can continue operating during the application process, investors are encouraged to take proactive measures, such as closing accounts with unlicensed platforms or transferring their assets to SFC-licensed exchanges before the looming deadline.  Licensing and partnerships Despite the regulatory pressures, Crypto.com appears to be navigating the challenges adeptly, leveraging its strategic partnerships and growth initiatives to reinforce its position in the market. In a recent interview, Eric Anziani, the COO of Crypto.com, highlighted the success of the company's collaborations with sports giants like F1 and the UFC, as well as a stadium naming rights deal in Los Angeles that has led to the Crypto.com Arena. These partnerships not only enhance brand visibility but also serve as avenues for attracting new users to the platform. With an approaching user base of 100 million, Crypto.com continues to expand its offerings, recently introducing Crypto.com Prime, an exclusive program tailored for high-net-worth individuals requiring a $1 million deposit. Anziani emphasized the importance of compliance, user convenience and competitive fees, while also acknowledging the diverse trading preferences among users. This license application is the most recent example of Crypto.com’s efforts to expand compliantly. Over the course of the past 12 months, the company has secured trading licenses in Spain, the UK, Dubai and Singapore.

Korean Police Establishes Task Force to Tackle Virtual Asset-Related CrimesIn response to the recent increase in virtual asset-related crimes in South Korea, the country’s police agency is establishing a dedicated task force to combat these illegal activities, according to local media outlet News1. This action by the National Police Agency comes as virtual asset legislation gained momentum and as prosecutors launched a joint virtual asset investigation division. Additionally, the police are considering establishing a new regional investigation unit focused on virtual asset-related investigations in the future.Photo by Sungho Song on PixabayMulti-divisional approachDuring this month, the police will consolidate various functions related to virtual asset investigations within its headquarters to establish the task force. This group will convene monthly meetings to exchange information on ongoing investigations and will also extend invitations to on-site investigators for the purpose of studying the most effective investigative methods and staying updated on the latest trends in virtual asset-related crimes.The task force will be jointly overseen by the heads of the Cyber Investigation Bureau and the Investigation Bureau and will consist of members from several divisions, including the Cyber Investigation Planning Division, Economic Crime Investigation Division, Cybercrime Investigation Division, Cyber Terrorism Response Division, Narcotic and Organized Crime Investigation Division, and National Security Investigation Command Division.Escalation of virtual asset crimesBy the end of the first half of this year, the global crypto market value reached $1.17 trillion, coinciding with a notable uptick in crypto-related criminal activities. In 2021, there were 427 instances of domestic fraud cases linked to cryptocurrencies, resulting in the arrest of 1,717 individuals. However, in 2022, these numbers increased to 628 cases involving 2,123 people. Furthermore, from January to July of the current year, the police have apprehended 1,146 individuals in connection with 327 cases related to cryptocurrency crimes.However, responding to virtual asset-related crimes presents a significant challenge due to their diverse nature and wide-ranging applications. For example, incidents involving crypto hacking typically fall under the jurisdiction of the Cybercrime Investigation Division. On the other hand, cases related to fraudulent crypto investment schemes are typically handled by the Economic Crime Investigation Division, while the Narcotic and Organized Crime Investigation Division concentrates on instances of drug trading conducted using cryptocurrencies.Paving the way for specialized expertiseFurthermore, as part of the task force’s efforts, the police will seek input and feedback regarding the potential establishment of a new department focused exclusively on investigating virtual assets in the future. A police official mentioned that the creation of such a dedicated unit is seen as a desirable step that could facilitate the development of specialized expertise among on-site officers. Looking ahead, the police are also contemplating the formation of a regional investigation unit specifically dedicated to cryptocurrency-related investigations, a unit akin to the existing Financial Crimes Investigation Unit.Upcoming law implementationThe police’s decision to form a working group is seen as a proactive step in preparation for the forthcoming Virtual Asset User Protection Act, slated to take effect in July next year. This legislation is designed to enable legal action against unfair trading practices related to virtual assets, including the misuse of undisclosed information, market manipulation, and illicit transactions. It parallels the regulatory framework applied to financial investment products.In August, public prosecutors took action by launching a joint cryptocurrency investigation division at the Seoul Southern District Prosecutors’ Office in collaboration with several key agencies, including the Financial Supervisory Service (FSS), Financial Intelligence Unit (FIU), National Tax Service (NTS), Korea Customs Service (KCS), Korea Deposit Insurance Corporation (KDIC), and Korea Exchange (KRX). Moreover, in light of the growing importance of legal issues related to cryptocurrencies, prominent law firms have been swiftly mobilizing to establish specialized teams dedicated to handling crypto legal cases.This trend is not limited to South Korea alone; it is also unfolding in other countries. For instance, in a parallel development, the Hong Kong Police Force and the Securities and Futures Commission (SFC) have recently instituted a working group to monitor and address suspicious activities linked to virtual asset trading platforms (VATPs).