Crypto Winter Halves Korean Bank Fee Profits

Korbit, one of South Korea’s leading crypto exchanges, has recently conducted an education session on anti-money laundering (AML) for its employees, local tech media outlet ZDNet Korea reported.  Held in the office lounge of Korbit, the session was led by Hwang Seok-jin, an expert in financial crime and anti-money laundering regimes. A professor at the Graduate School of International Information Protection of Dongguk University, he has served as a compliance officer and a consultant at Digital Asset eXchange Alliance (DAXA), a group consisting of five leading cryptocurrency exchanges in South Korea.  Photo by Viacheslav Bublyk on UnsplashEmphasis on the Virtual Asset User Protection Act  Mr. Hwang informed Korbit’s employees about the upcoming Virtual Asset User Protection Act, effective July, highlighting guidelines for investor protection, prohibitions against unfair transactions and the financial regulators’ authority and oversight. The session especially focused on explaining the Virtual Asset User Protection Act, given that the Act would deeply influence many departments of Korbits ranging from the accounting and finance unit handling customer deposits to blockchain-related units responsible for the custody of virtual assets.  Korbit maintains a no-negotiation policy that bars projects from interacting with exchange employees prior to their tokens being listed. This policy enhances the transparency of Korbit’s evaluation process, ensuring that the exchange assesses projects impartially, without third-party influence or external pressures. After listing an asset, Korbit conducts quarterly risk assessments on all crypto assets traded on the platform. Additionally, it plans to adopt a stricter approach to internal controls to enhance customer protection, in line with the upcoming enactment of the Virtual Asset User Protection Act. 

While the digital assets space moves at a blistering pace, the Asia Pacific (APAC) region is on the brink of a substantial regulatory transformation, with a focus on tokenization as we enter 2024.Photo by CHUTTERSNAP on UnsplashContinued regulatory focusThat’s according to Rahul Advani, Ripple’s Singapore-based Policy Director for the Asia-Pacific (APAC) region. The Ripple Labs Executive expressed his thoughts as part of a series communicated by the company last week on social media, emanating from some of its top tier executives. This shift comes amid growing interest in tokenized assets within and beyond traditional financial markets. In setting out his thoughts, Advani reflected on the APAC region’s regulatory focus on achieving clarity for crypto in 2023. Throughout the year, there has been an emphasis on consumer protection, retail investor safeguards, market integrity and business conduct requirements. This regulatory momentum is expected to continue into 2024, particularly concentrating on enhancing retail protections. Shift towards tokenizationThe Ripple Policy Director highlighted tokenization, which converts assets into digital tokens, as an item that is experiencing increased adoption. Notable collaborations, such as Iota’s partnership with Fireblocks to streamline asset tokenization, highlight its relevance in both crypto and traditional finance. The United Kingdom’s venture into fund tokenization further exemplifies this cross-industry trend. Ripple itself has been moving further towards real-world asset (RWA) tokenization. In September, an influential pseudonymous account on X underlined how Ripple was preparing itself to get further involved in asset tokenization. The account stated: “#Ripple now owns properties that can build the infrastructure for exchanges, companies, wallets and apps to connect to fiat rails, banks, trusts, retirement plans, etc., to tokenize real world assets and hold them in safe, compliant ways.”In May the company collaborated with the Hong Kong Monetary Authority (HKMA) on a pilot program with the objective of showcasing an RWA tokenization solution. APAC to advance CBDC and stablecoin developmentIn the stablecoin sector, where digital assets are pegged to stable values, APAC is positioned to lead in regulatory efforts, according to the Ripple executive. While some regions are still formulating stablecoin regulations, Advani envisions more APAC jurisdictions providing the necessary regulatory clarity to foster innovation while ensuring consumer safety. In the broader context, Advani anticipates more focused efforts towards the development and implementation of central bank digital currencies (CBDCs), emphasizing the need for a shift from speculative hype cycles. He wrote: “In the coming year, we also foresee a regional trend that involves a more focused effort on developing CBDCs. Stablecoins will continue to be a regulatory priority, with an emphasis on ensuring a high degree of value stability.” The forecast underscores the dynamic regulatory landscape in APAC, where regulators must delicately balance fostering innovation, safeguarding investors and maintaining market stability. Striking this balance will be a defining aspect of the regulatory narrative in 2024. Advani’s thoughts were offered by Ripple alongside those of some of his colleagues at the company, such as the enterprise blockchain firm’s APAC region Managing Director Fiona Murray. These predictions from Ripple executives collectively offer insights into the evolving regulatory landscape and industry dynamics as we approach 2024.

South Korea Launches Blockchain Project to Streamline Public ServicesThe South Korean Ministry of Science and ICT and the Korea Internet and Security Agency (KISA) have launched the 2023 blockchain application project to bolster the domestic industry and adapt to the rapidly evolving global blockchain landscape.Photo by Ping Onganankun on Unsplash$1.6 million projectAs part of the Korean government’s broader strategy to promote the blockchain industry, the project has received a budget of approximately 20.7 billion KRW ($1.6 million). The project participants are focused on exploring blockchain-based services that offer convenience to the public and have the potential to penetrate the global market. The digitization of drivers’ licenses is such a service that has been developed and has simplified the lives of Korean citizens.The project encompasses both the public and private sectors, each undertaking six programs. The public sector programs aim to explore blockchain-based services that the government can provide, while the private sector programs are dedicated to supporting the commercialization of business prototypes developed by companies.Public sector programsThe six public sector programs are the implementation of digital badges for national licenses, the development of an online voting system for residents, the establishment of a remote pension eligibility check system, the enhancement of the electronic authentication system, the streamlining of drone operation applications, and the creation of a performance tracking platform for athletes.For instance, the implementation of digital badges for national licenses will greatly streamline the process for individuals who need to present their licenses to relevant organizations as a means of verifying their credentials. Presently, license holders are required to physically visit issuers or navigate their websites to gather the necessary documentation. However, the introduction of this new technology eliminates the need for this cumbersome process.Private sector programsMeanwhile, the private sector programs focus on developing the following six platforms: the battery life authentication system for electric vehicles (EVs), the oil waste trading platform, the non-fungible token (NFT) issuer for digital identity authentication, the NFT concert ticket system, the fractional investment platform for power plants, and the corporate management planner for environmental, social, and governance (ESG) initiatives.For example, the introduction of a blockchain-based certificate system to assess the remaining life of EV batteries holds significant implications for both car insurance and the trading of used cars. Currently, the lack of comprehensive data to evaluate the exact value of EV batteries poses challenges to the efficient trade of both used cars and batteries. Establishing this certificate platform will not only promote battery recycling but also positively impact the industry as a whole.