Hong Kong considers rules for fiat-backed stablecoin issuers

Japan’s financial authority has decided to regulate cryptocurrencies under the Financial Instruments and Exchange Act, classifying them as financial instruments. According to a report by The Asahi Shimbun, the Financial Services Agency (FSA) intends to include this reclassification in an amendment scheduled for submission during next year’s regular Diet session. Under the revised framework, local crypto exchanges will be required to provide detailed disclosures on the 105 tokens they handle. This includes the existence of issuers, underlying technologies such as blockchain, and price volatility risks. The proposed regulations will also subject these classified cryptocurrencies to insider trading rules. Issuers and individuals affiliated with exchanges will be prohibited from trading based on material non-public information, such as the suspension of trading or an issuer’s potential bankruptcy.Photo by Karola G on PexelsToken coverage in JapanAlthough the regulatory list contains 105 tokens, data from the Japan Virtual and Crypto Assets Exchange Association (JVCEA), cited in a New Economy report, indicates that Japanese exchanges currently list 119 cryptocurrencies, leaving unclear how the remaining digital assets will be regulated.  To enhance investor protection, the FSA will mandate specific disclosure requirements for issuers that use token launches for fundraising. These entities will be required to report on their latest business activities and future issuance plans annually. This legislative push follows a discussion paper published by the FSA in April, which proposed dividing crypto assets into two distinct categories. The first category includes tokens issued for raising capital, while the second comprises established cryptocurrencies that are not primarily used for issuer fundraising, citing Bitcoin (BTC) and Ethereum (ETH) as primary examples. Tax cut from 55% to 20%In parallel with these regulatory changes, the FSA plans to request tax reforms similar to those applied to traditional stock trading. Under Japan’s current tax code, taxes on cryptocurrency gains can reach as high as 55%. The agency proposes reducing this rate to a flat 20% in next year’s tax reform. Responding to the news on X, Changpeng Zhao, the founder and former CEO of Binance, welcomed Japan’s initiative to lower crypto taxes. However, he noted that the proposed 20% rate remains high compared to other jurisdictions, many of which do not levy capital gains taxes on crypto at all. Crypto ETF CFDs set to closeThe government’s move to tighten regulations is already reshaping the financial product landscape. One immediate impact is visible in contracts for difference (CFDs) linked to crypto ETFs. As reported by FinanceFeeds, IG Securities, the Japanese subsidiary of the London-listed IG Group, announced changes to its offerings. The firm will stop accepting new orders for CFDs tied to BlackRock’s iShares Bitcoin Trust and its Ethereum equivalent on Dec. 1. Open positions are scheduled to be automatically closed on Jan. 31 of next year. If clients do not settle their holdings prior to this date, the final settlement will be calculated based on the official closing price of that final day. This discontinuation adheres to an FSA decision that derivatives referencing Bitcoin or Ether ETFs must be regulated as crypto-related derivatives rather than standard ETF products. These instruments, now under the crypto-related derivative classification, fall under stricter rules regarding investor protection, operational oversight, and licensing. Japan’s latest regulatory and tax initiatives reflect a broader effort to bring clarity and investor protection to the country’s growing crypto market. As the framework evolves, the industry will be watching how the new rules influence participation and market structure. With lower taxes and stricter oversight on the horizon, both investors and exchanges may need to adjust, potentially reshaping liquidity and Japan’s overall appeal while prompting trading platforms to rethink their product offerings. 

Indian police arrest eight more in $300M crypto scamIndian authorities have apprehended eight new individuals in connection with a sprawling $300 million (2500 crore Indian rupees) cryptocurrency scam that victimized approximately 100,000 people.According to a report published by local news media outlet The Times of India, the arrests have been made as part of an ongoing investigation. Of the eight individuals arrested, four have been identified as police officers.Photo by Big G Media on UnsplashLong running scamAs the investigation has unfolded, it has revealed an operation which is alleged to have been masterminded by Subhash Sharma, who remains at large. What has been termed the Himachal Pradesh crypto scam began to unravel in late September, although the Indian authorities believe that the origins of the scam stretch back to 2018.The perpetrators lured unsuspecting victims with investment schemes involving a local cryptocurrency known as Korvio Coin (KRO coins). As the scheme expanded, various other cryptocurrencies were introduced through fraudulent websites. One of these projects was abandoned after individuals had already invested, leading to significant financial losses.Targeting police officers and government officialsThe target audience for this particular scam has set it apart from that of others, given that police officers seem to have been involved while their colleagues are counted among the victims of the scam. Reports indicate that over 1,000 police personnel became entangled in the fraudulent web. While some officers were themselves victims, others made substantial gains. A few voluntarily took on the role of promoters, lending an air of credibility to the operation.Alongside police officers, 5,000 government officials also fell prey to the fraudulent investment schemes. The gravity of the situation became evident when it was revealed that around 56 complaints had been filed with police stations over the past two years.Multi-agency responseIn response to mounting concerns, multiple agencies, including the Enforcement Directorate and regional police teams, embarked on a comprehensive investigation under the guidance of a Special Investigation Team (SIT). The investigation has uncovered that over 100 individuals profited to the tune of $240,000 each, while another 200 reaped around $120,000 each from the scam.While the arrests have mounted to a total of 18 individuals, Sharma continues to evade capture. However, authorities have managed to identify and seize several properties associated with Sharma.In a separate investigation, the Enforcement Directorate is scrutinizing the roles of five women suspected of working as agents or promoters for the elusive kingpin. These developments underscore the vast extent of this crypto scam and the imperative for swift and thorough legal action.While crypto and Web3 more broadly have yet to fully unfold and reach full potential, there is no doubt that the sector has been blighted by ongoing scams, hacks and sharp practice. A recent report by Singapore-based blockchain security firm Immunefi estimated Q3 losses within the sector of $686 million.In August, a $120 million crypto ponzi scheme was uncovered in India’s Odisha state. Meanwhile, authorities in Hong Kong continue to come to terms with a fraud perpetrated by Dubai-based crypto exchange platform JPEX.As the investigation continues to unfold, the authorities are determined to bring all involved parties to justice, with a view towards sending a stern message to those who exploit unsuspecting individuals under the guise of cryptocurrency.

CarrieVerse joins Dubai’s DMCC as metaverse service providerWeb3 metaverse platform CarrieVerse has joined the Dubai Multi Commodities Centre (DMCC), the UAE’s largest free-trade zone for a wide array of companies including those in the blockchain and crypto industry. Last month, CarrieVerse received final approval to establish a local subsidiary there, which will serve as a hub to expand its global Web3 ecosystem, particularly in the Middle East and North Africa (MENA) region.Photo by ZQ Lee on UnsplashAn ever-growing business hub“DMCC has recently risen as a hub for Web3 companies and investors that is actively supported by the Dubai government and the royal family. As the first Korean Web3 company to officially partner with DMCC, we expect that CarrieVerse will grow into a global company here,” said David Yoon, CEO of CarrieVerse.DMCC is a UAE government agency located in the Jumeirah Lakes Towers district of Dubai and is currently led by Executive Chairman and CEO Ahmed Bin Sulayem. It is home to more than 23,000 companies ranging from startups to large corporations and has been named Global Free Zone of the Year by the Financial Times’ FDI Magazine for nine consecutive years since 2015.Notably, the zone also has a Crypto Centre for blockchain and crypto businesses, including big names like Binance and Bybit. It has been supporting companies by providing funding, incubation, peer-to-peer matching and opportunities for collaboration.According to Zaher El Orm, the Crypto Centre Executive at DMCC, the Crypto Centre also supports businesses in their pursuit of crypto licenses for business activities and regulated virtual assets activities. These include blockchain as a service, metaverse service provider, crypto proprietary trading and crypto mining activities. CarrieVerse revealed that it has officially obtained a license as a metaverse service provider.Promising outlook for CVTXDMCC is now an official partner of CVTX, the platform’s governance token, which is expected to boost the token’s momentum on global exchanges. It has recently been listed on the Singapore-based digital asset exchange BingX. This will further help the platform secure partnerships with more than 1,000 leading global Web3 companies at DMCC.CarrieVerse and DMCC stated that they plan to reveal the roadmap of their partnership in the future.