Investigation launched into prominent Chinese blockchain figure Yao Qian

Korean Financial Watchdog Takes Action to Prevent Abnormal Foreign Currency TransfersAccording to yesterday’s press release, the South Korean Financial Supervisory Service (FSS) has undertaken measures to tackle the issue of abnormal foreign currency transactions disguised as cross-border trade transactions. After identifying suspicious transactions of a total of approximately $7.2 billion involving 83 companies, the FSS has collaborated with the Korea Federation of Banks and domestic financial institutions to establish a task force. The objective is to improve the existing system and prevent such occurrences in the future.Photo by Eric Prouzet on UnsplashWeaknesses in internal controlsDuring inspections conducted within the banking industry since June 2022, the FSS uncovered weaknesses in internal controls related to foreign currency transfers. These included instances where banks neglected to verify the required documents for transfers and failed to detect abnormal transactions that had been ongoing for an extended period of time. The abnormal foreign currency transfers primarily involved funds flowing out of Korean virtual asset exchanges and being sent overseas under the pretense of trade transactions.Three-line defense internal control systemTo address these vulnerabilities, the task force has engaged in discussions and decided to build an internal control framework within the banking industry, rather than to add a new procedure. This was to minimize the disruption that the new system can pose to banks regarding foreign exchange transactions. The dedicated group has introduced a three-line defense internal control system.The new internal control system comprises three parts. Firstly, it involves standardizing a checklist of vital checkboxes that must be completed before initiating advance remittance transfers for imports. Secondly, the monitoring system employed by banks will be strengthened. Lastly, a follow-up system will be developed, clearly outlining the roles and responsibilities of banks and incorporating a review process.Implementation and timelineBanks plan to implement these improvement measures in July, following necessary preparations such as guidelines revision and rules update in the second quarter of this year. Since developing a computerized system and devising new procedures may require additional time, they will be gradually introduced in the third quarter.The FSS expects these improvements will ensure the systematic operation of banking institutions’ internal control functions related to cross-border prepayments, thereby preventing suspicious foreign currency transfers and curtailing companies’ risks of violating their obligations.

Aave v3 Launches on Metis Scaling NetworkMetisDAO confirmed on Tuesday that leading decentralized liquidity protocol Aave has been deployed on the layer 2 Ethereum-centric scaling platform.Photo by Joshua Sortino on UnsplashGiven the distributed nature of the teams behind decentralized networks and projects, it can be difficult at times to determine where project teams are based, albeit in the case of MetisDAO, according to LinkedIn, its primary location is Singapore despite having a Canadian Co-Founder and CEO.Aave’s move to ZK networksThe move comes following a vote taken by Aave’s user community, who voted in favor last month of a proposal to deploy the liquidity protocol on zero knowledge-based networks. In a social media post, the Metis team referred to the decentralized lending market going live on the network as “a new era of Decentralized Finance.”The development is significant for Metis, given that Aave is the third largest project in crypto based on the total value locked (TVL) metric. Within DeFi lending, it’s the biggest project in the sector, holding a TVL of $5.4 billion.One of the keys of Aave’s dominance is its multi-chain strategy. Metis marks the eighth network upon which it has been deployed. The others include Ethereum, Polygon, Arbitrum, Optimism, Fantom, Harmony and Avalanche.Metis technical roadmapWhile there’s a lot of uncertainty as to how various crypto projects will pan out over the longer run, most agree that Ethereum is here to stay. Metis stands a good chance of contributing to that ecosystem over the long term as layer two scaling networks are likely to be part and parcel of the Ethereum environment for some time to come.Last month, the project set out a technical roadmap, detailing what the project has in store, while claiming that in general, 2023 would be a great year for Ethereum. Metis is a layer two network based on Optimistic Rollup architecture. It has grown into the third largest scaling network relative to Ethereum.The project plans to roll out Bedrock, a technical upgrade that will enable improved network security. Furthermore, it plans on bringing about consensus and execution separation. Also in its sights are faster deposit times, which the project claims, will enable better UX.Many DeFi networks are under scrutiny in terms of the centralized elements that they incorporate. Metis plans to make improvements in this regard, with the intention of decentralizing the sequencer pool. The project claims that “Metis Andromeda will be decentralized to the core.”Hybrid rollupsDemonstrating further ambition, Metis is aspiring to bring about hybrid rollups, combining the features of optimistic rollup architecture with zero-knowledge proofs. In a tweet, Head of Marketing and MetisDAO Co-Founder Kevin Li said that “by combining the best traits from both schemes, hybrid rollups will offer the unmatched scalability and EVM-equivalence of optimistic rollups, together with the censorship resistance and fast finality enabled by zero-knowledge proofs. The best of both worlds.”MetisDAO believes it adds value for users of its network through Aave’s offering, enabling them to borrow assets with less collateral via Aave’s High-Efficiency mode. Furthermore, the deployment makes for improved risk management through supply and borrow caps, and siloed borrowing, reducing the risk in the event of market contagion.

The decision by U.S. regulators to approve spot Bitcoin exchange-traded funds (ETFs) in January appears to be having some knock-on effects, with the latest such response seeing the Thai authorities enable access to such products for institutional investors and ultra-high-net-worth individuals within Thailand.Photo by Karolina Grabowska on PexelsMeeting a growing demandAccording to a report in the Bangkok Post on March 12, Thailand’s Securities and Exchange Commission (SEC) has agreed that Thai asset management firms may manage and offer funds that incorporate investment in U.S. spot Bitcoin ETF products. The decision was arrived at following a recent SEC board meeting. The SEC's decision reflects a strategic response to the growing demand for digital asset exposure among institutional investors. It would appear that spot Bitcoin ETF approval in the United States has bolstered investor confidence in this investment instrument on an international basis. Urging cautionDespite the opportunities this presents for institutional investors, the SEC has emphasized caution, citing the high-risk nature of digital asset investments. SEC Secretary-General Pornanong Budsaratragoon verbalized that need for caution, stating: "Asset management firms asked the SEC for them to have exposure in digital assets, especially Bitcoin and spot Bitcoin ETFs, but we need to consider carefully whether to allow asset management firms to invest in digital assets directly due to the high risk.”It’s interesting to note that in an immediate response to the approval of these products in the United States in January, Thailand’s SEC clarified that it had no plans to allow asset management firms to launch similar products within Thailand. For the moment at least, it seems that demand will be satisfied by accessing products that have gained exposure to U.S. spot Bitcoin ETFs instead. Retail investors excludedWhile this move expands the investment landscape for institutional players, retail investors in Thailand find themselves sidelined due to regulatory restrictions. The amended regulations primarily cater to accredited investors, leaving retail participation in spot Bitcoin ETFs out of reach. This exclusion contrasts with the popularity of retail crypto trading in Thailand, albeit within regulated boundaries. Recent government regulations have both facilitated and restricted certain crypto activities. Thailand's move aligns with broader trends in the cryptocurrency sector, with several countries, including South Korea and Hong Kong, exploring opportunities in the space. In Hong Kong, regulators are currently processing applications for Bitcoin ETFs, with several financial institutions expressing interest in introducing spot Bitcoin ETFs. Just like the Thai authorities, the governor of the Royal Bank of India (RBI) had also responded in the aftermath of product approval in the U.S. stating that he didn’t favor the approval of such products in India. Despite that, news emerged on March 11 that Indian crypto investment platform Mudrex is planning to meet demand by providing clients with access to these U.S. products. As institutional investors gear up to capitalize on this opportunity in Thailand, the regulatory framework surrounding digital assets will continue to shape market dynamics, both domestically and internationally.