Korean Crypto Exchange Coinone Protects Investors from Fraud Losses of $370K in H1

In an effort to safeguard crypto investors from falling prey to misleading advertisements, the Securities and Exchange Commission (SEC) of Thailand has intensified its scrutiny of promotional campaigns within the crypto sphere. Photo by Dave Kim on UnsplashBroker agent eventsOn April 29, the Bangkok Post reported that the SEC has raised concerns regarding the potential violation of local regulations through introducing broker agent (IBA) events. These events, the SEC clarified, may breach regulations as IBAs are only permitted to promote digital token services to deter speculation on cryptocurrencies, categorized as high-risk assets. IBAs, acting as local conduits for partner digital asset exchanges, typically earn commissions by onboarding clients within a specific market. Such practices are common for exchanges or brokers that don't directly operate in certain markets. Deputy Secretary-General Anek Yooyuen conveyed the commission's unease over crypto exchanges offering preferential treatment to onboard users. Yooyuen stated: "When operators organise sales promotions by offering rewards to entice people to use the service, this could encourage use of the service without considering the investment risks. This is especially the case for cryptocurrencies.” Warning of consequencesHe cautioned that failure to adhere to these guidelines would result in “punishment according to the law.” While cryptocurrency exchanges are legal in Thailand, they must secure local approval. Notably, last month, Thailand even greenlit asset management firms to launch private funds, offering Bitcoin exchange-traded funds (ETFs) exclusively to institutional and ultra-high-net-worth investors. Nonetheless, the country recently prohibited the sale of cryptocurrency lending products and mandated that exchanges prominently display risk warning messages. International regulatory trendThis move by the Thai SEC mirrors actions taken by regulators in other major crypto markets. For instance, the United Kingdom's Financial Conduct Authority (FCA) issued 450 alerts for illegal crypto ads in 2023 alone. Similarly, Spain’s principal securities market regulator, the National Stock Market Commission, denounced fraudulent crypto asset promotions in November 2023, emphasizing companies’ obligations to adhere to local laws. Thai advertising guidelines mandate businesses and advertisers to substantiate the “facts” presented in their campaigns, failing which could lead to legal repercussions. A recent incident provides a case in point. Hackers hijacked advertisements on Etherscan, redirecting users to phishing sites aimed at draining crypto wallets. Scam Sniffer, a blockchain investigation firm, attributed the widespread phishing campaign to the inadequate oversight by advertisement aggregators. The company made the following statement on the matter: “Etherscan aggregates ads from platforms like Coinzilla and Persona, where insufficient filtering could lead to exposure to phishing attempts.” The wallet drainer scam involves enticing users to counterfeit websites and coercing them to link their crypto wallets, enabling scammers to siphon funds into their own wallets without user authentication or consent. This is not the first time that the authorities in Thailand have homed in on crypto-related advertising. In August 2023, the Southeast Asian country’s Ministry of Digital Economy and Society (MDES) outlined that it had engaged with social media firm Meta, owner of Facebook, informing it that its response to the proliferation of fraudulent platform ads relative to crypto had been inadequate. 

India’s RBI Cites Stablecoin Risks With Call for Global RegulationIn its latest Financial Stability Report released on Wednesday, the Reserve Bank of India (RBI) expressed concerns about the potential harm stablecoins could inflict on emerging markets and developing economies (EMDE).Photo by rupixen.com on UnsplashPerennial criticThe RBI has been a consistent critic of cryptocurrencies, but particularly so in the case of stablecoins, from an EMDE perspective. However, the lack of authenticated data and inherent data gaps in the crypto ecosystem hindered a comprehensive assessment of financial stability risks.According to the report, one of the ways stablecoins could pose a threat to an EMDE is through currency substitution. Since the underlying assets of stablecoins are generally denominated in freely convertible foreign currencies, the widespread adoption of stablecoins could lead to currency mismatches on the balance sheets of banks, firms, and households, resulting in an increased risk to the economy.Monetary policy headacheFurthermore, the presence of stablecoins in the economy could create challenges for an EMDE’s central bank in setting domestic interest rates and managing liquidity conditions. The decentralized, borderless, and pseudonymous characteristics of crypto-assets make them potentially attractive instruments for circumventing capital flow management measures.Another concern highlighted by the RBI is that stablecoins could undermine credit risk assessment and interfere with banks’ ability to mobilize money and create credit by offering an alternative to the domestic financial system. Additionally, the report emphasized the difficulty in tracking peer-to-peer transactions, on the basis that they increase the potential for illicit activities.In light of these risks, the RBI reiterated its call for global coordination and regulation. It emphasized the need for a globally coordinated approach to analyze the risks posed to EMDEs compared to advanced economies (AEs). As India holds the G20 presidency, one of its priorities is to establish a framework for the global regulation of unbacked crypto-assets, stablecoins, and decentralized finance (DeFi).Establishing a CBDCWhile the RBI has been cautious about cryptocurrencies, it has shown more enthusiasm for central bank digital currencies (CBDCs). In November, the RBI launched a wholesale digital rupee pilot project. It followed that up in February with a retail digital rupee pilot project. In March, it signed an agreement with the Central Bank of the United Arab Emirates to study a CBDC bridge aimed at facilitating trade and remittances.By calling for global regulation and highlighting the risks associated with stablecoins, the RBI aims to foster a safer and more secure environment for financial transactions while exploring the potential benefits of CBDCs in facilitating trade and remittances.As the discussions around stablecoins and CBDCs continue, we’re likely to see ever greater collaboration between regulators, policymakers, and international organizations with a view towards establishing a comprehensive regulatory framework that addresses the challenges and harnesses the potential of digital assets on a global basis.

Malaysian Prime Minister Datuk Seri Anwar Ibrahim has said that Malaysian government agencies and the country’s central bank need to study blockchain and cryptocurrency from a policy perspective so as not to get left behind.Photo by Esmonde Yong on UnsplashConsidering major changesHis comments emerged alongside the news that Anwar had discussed digital finance policy matters with Abu Dhabi government officials and with Changpeng Zhao (CZ), the founder and former CEO of Binance. According to the New Straits Times, an English-language newspaper published in Malaysia, the Malaysian government is homing in on the establishment and adoption of a formal policy relative to digital assets and blockchain.  Anwar confirmed that discussions also related to “digital transformation, data centers and artificial intelligence (AI),” and that the demands that Malaysia now faces require the government to consider major changes. In discussion with local media, Anwar stated: "I proposed several months ago how our agencies, including security, treasury and Bank Negara study how Malaysia can explore this so we aren't left behind. Ensuring that is regulated could safeguard the people's interests and prevent leakages.” Crypto-friendly regulationsAnwar added that a “radical departure from the old ways” would be needed for Malaysia to remain competitive, emphasizing the need for the Southeast Asian country to keep up to speed through the application of crypto-friendly regulations. Addressing the pace of technological change, he stated: “This is an evolution which happens quickly and requires us to be equally fast. We feel that Malaysia should not be left behind while mired in an old financial system.” In moving towards setting out a clear policy relative to digital assets, the Malaysian prime minister is encouraged by his recent dialogue with United Arab Emirates (UAE) government officials. He said that they confirmed that they feel they can forge close cooperation with Malaysia on the matter. Anwar added:“We need to discuss this in detail, leave behind the old business model and give meaning to this digital finance policy.” Taking to the X social media platform, Binance’s CZ described the nature of his discussion with the Malaysian prime minister, stating: “The discussions were not about Binance but about the crypto industry and Malaysia, including regulations, policies, risks, and collaborations between industries and across national borders. Forward!” A pseudonymous crypto investor and programmer, @darren_com_my, responded to CZ’s tweet to explain that the Malaysian government provides support to the digital assets industry via government agencies, but that, on the other hand, it has blacklisted a number of exchanges such as HTX (formerly Huobi) and Binance.  The local regulator has issued licenses to six virtual asset service providers. In recent weeks, Malaysia’s Securities Commission has taken action against global exchange Bybit and crypto app Atomic Wallet, prohibiting them from trading within the jurisdiction due to both companies not having obtained the required licensing.