Hong Kong’s PCPD investigates Worldcoin over privacy concerns

Korean government to seize crypto for unpaid child supportStarting next year, the South Korean government is set to begin seizing virtual assets such as bitcoin from parents who are obligated to pay child support but fail to do so.Photo by Bonnie Kittle on UnsplashKorea Credit Bureau to assist in crypto seizuresAccording to a report by local news outlet Dailian, the Child Support Agency (CSA) of the Korean Institute for Healthy Family (KIHF), which operates under the Ministry of Gender Equality and Family, announced on Wednesday (local time) a partnership with the Korea Credit Bureau (KCB). This collaboration will empower the agency to confiscate virtual assets from parents who are delinquent in paying child support.Since 2015, the CSA has been offering emergency child support for approximately a year to low-income single parents who have not received payments from non-custodial parents. In this process, the agency initially pays the child support on behalf of the non-custodial parents and subsequently pursues reimbursement from them. This system ensures that the immediate needs of the children are met while still holding non-custodial parents accountable for their financial responsibilities.Before July 2022, the CSA was required to initiate lawsuits against non-compliant parents to recover child support payments. However, since then, the agency has been authorized to directly pursue reimbursements by following the compulsory national tax collection process.Challenges in enforcing child support paymentsDespite these improved measures, the government still encountered challenges in enforcing child support payments. Some non-compliant parents have resorted to earning income under other people’s names or deliberately concealing their properties, including virtual assets, to evade their child support obligations.Against this backdrop, the recent partnership between the CSA and the KCB is a strategic move to enhance the enforcement of child support payments. This collaboration will grant the CSA access to KCB’s virtual asset management system. With this access, the CSA will be able to efficiently search for and seize the cryptocurrency holdings of non-compliant parents.Jeon Joo-won, the head of the CSA, underlined the significance of the agency’s collaboration with the KCB. She pointed out that utilizing KCB’s financial transaction data will improve the CSA’s enforcement of child support payments. Jeon also emphasized that the mutual support between the two agencies will serve as a foundation for promoting social values, highlighting the broader societal impact of their combined efforts to ensure responsible child support compliance.

Crypto.com, the Singapore-headquartered cryptocurrency exchange platform, has outlined that it has seen significant growth thanks to high-profile sports sponsorship and advertising. Reaping the rewardsThe company has established advertising partnerships with Formula 1 (F1) motor racing and the Ultimate Fighting Championship (UFC). These lucrative sponsorship deals have propelled the exchange into the spotlight of two massive fan bases, contributing to its expansion. In an interview with Cointelegraph last week, Eric Anziani, president and chief operating officer of Crypto.com, discussed the company's successful advertising campaigns with F1 and the UFC, as well as its naming rights deal for the Crypto.com Arena in downtown Los Angeles. In 2021, what was then the Staples Center was renamed to the Crypto.com Arena in a $700 million naming rights deal. Anziani expressed gratitude for these partnerships, emphasizing the importance of staying top of mind for users in the competitive cryptocurrency market.  That same year, the company signed a multi-year partnership deal with leading French football club Paris Saint-Germain (PSG), rolling out various PSG-related marketing activities since then.Photo by Austin Loveing on UnsplashBrand recognition benefitsMarket surveys conducted by Crypto.com indicate a high level of global awareness and brand recognition among retail cryptocurrency users. The exchange's logo prominently displayed during F1 races and UFC events has helped it reach millions of fans worldwide. ESPN reports an average of 1.11 million viewers per race for the 2023 F1 season in the United States alone, with global viewership exceeding one billion over the entire race calendar. Similarly, the UFC boasts a global audience, with some of its biggest fights attracting millions of pay-per-view viewers. Anziani highlighted the effectiveness of these partnerships in bringing people into the cryptocurrency space.  User base approaching 100 millionThese partnerships have significantly contributed to Crypto.com's growing user base, which is approaching 100 million users in 2024, up from an estimated 80 million in the previous year. Anziani discussed the factors that drive users' choice of exchange platforms, emphasizing the importance of compliance, security, convenient access to cryptocurrency and competitive fees. He noted that different users prioritize different aspects based on their trading preferences and requirements. The firm is not alone in pursuing high-profile sports sponsorship deals. Rival platform OKX has an ongoing sponsorship deal in place with Manchester City Football Club in the English Premier League (EPL). It also has doubled down recently on the sponsorship of F1 racing team McLaren. Other notable partnerships include crypto gambling platform Stake.com’s sponsorship of Sauber F1, crypto exchange platform Kraken’s deal with Williams F1 and BingX’s sleeve sponsorship agreement with Chelsea football club in the EPL. High-profile marketing initiatives are alive and well, although in a much more sober way than in 2022 when six crypto companies featured in Super Bowl advertising in the United States. Kraken’s chief marketing officer, Mayur Gupta, recently stated that the Super Bowl is no longer an effective means of promotion for crypto companies.  

In an effort to fortify the cryptocurrency market and safeguard investors' funds, the Hong Kong Securities and Futures Commission (SFC) has introduced a minimum insurance requirement of 50% for licensed cryptocurrency exchanges handling customers' assets.Photo by Simon Zhu on UnsplashGuarding against insolvency riskThe move came to light through a statement published recently by OSL, one of Hong Kong’s licensed virtual asset trading platforms. It’s aimed at enhancing security measures, protecting users from potential security breaches or insolvency. As part of that disclosure, OSL announced a two-year partnership with Canopius, an underwriter syndicate associated with Lloyd's of London. Under this collaboration, OSL will provide insurance coverage for an impressive 95% of its users' assets, surpassing the mandated 50%. OSL emphasized its commitment to safeguarding regulated assets under custody, irrespective of the regulatory guidelines permitting virtual asset service providers (VASPs) to reduce insurance coverage to 50%. Response to recent failuresThis decision is grounded in the acknowledgment of the volatile market conditions and the series of cryptocurrency firm collapses witnessed in recent years. 2022 saw a number of high-profile crypto platform collapses, such as the demise of FTX. HashKey Exchange, another licensed crypto exchange in Hong Kong, has also proactively secured its users' assets by entering into a crypto insurance agreement with Hong Kong headquartered fintech firm OneDegree back in September. The insurer entered the digital assets space last July, expanding into the Middle East last month. OneDegree’s arrangement with HashKey offers coverage ranging from $50 million to $400 million, extending beyond standard security breaches and insolvency to include server downtime, data back-up and load management incidents, ensuring comprehensive protection. Broader regulatory effortsThe minimum insurance requirement is part of the SFC's larger strategy to regulate the cryptocurrency industry in Hong Kong. While the Chinese autonomous territory enabled cryptocurrency trading for retail investors in August, only OSL and HashKey have obtained virtual asset trading licenses. Thirteen other entities are currently in the application process, undergoing rigorous due diligence checks, including comprehensive financial audits exceeding the scope beyond proof-of-reserve systems. This insurance mandate represents a significant step toward enhancing investor confidence in the cryptocurrency market. As digital assets gain popularity, ensuring the security of customers' funds has become paramount. The SFC's proactive approach seeks to strike a balance between fostering innovation and safeguarding investors. Products are also emerging that crypto users themselves can access. UK-based CryptoShield offers insurance protection directly to users that covers potential loss of funds on crypto platforms. The cryptocurrency landscape in Hong Kong is evolving rapidly, with the SFC playing a pivotal role in shaping the regulatory environment. Regulators aim to establish a robust framework addressing potential risks and protecting market participants while embracing digital innovation. As the regulatory landscape matures, more licensed crypto exchanges in Hong Kong may be required to meet the 50% minimum insurance requirement, further strengthening security measures and making the market a safer place for investors.