Asia diverges on crypto policy as China clamps down, neighbors embrace

Korean Supreme Court acquits Dunamu Chairman Song Chi-hyungThe Supreme Court of South Korea, in a significant ruling on Thursday (local time), acquitted Song Chi-hyung, chairman and principal stakeholder of Dunamu, of fraud and forgery charges, according to a report by local news agency Yonhap. This ruling is particularly noteworthy because Dunamu is the operator of the nation’s largest cryptocurrency exchange, Upbit.This decision, led by Justice Oh Kyung-mi, marks the culmination of a legal battle that began with Song’s indictment in Dec. 2018, and it extends to the acquittal of the company’s Chief Financial Officer (CFO) and the head of the Data Value Team, who were jointly indicted.Photo by Tingey Injury Law Firm on UnsplashBackground of the caseSong Chi-hyung and his colleagues were alleged to have fabricated an account on Upbit between September and November 2017. They had been accused of feigning the deposit of assets valued at KRW 122.1 billion and then employing these fictitious funds to enable transactions among actual members.The prosecution also leveled fraud charges against them, claiming that the fabricated account was utilized to sell 11,550 bitcoins to 26,000 members, thereby generating KRW 149.1 billion.The Seoul Southern District Court, acting as the court of first instance, found them not guilty. The court reasoned that the evidence presented by the prosecution was insufficient to establish that the defendants actually deposited the assets in the account.Issues with the prosecution’s evidence gatheringThe Seoul High Court, serving as the appellate court, identified problems with the evidence provided by the prosecution, determining that part of it lacked credibility due to improper collection methods. Notably, the court observed that the prosecution had directed Dunamu employees to access their Amazon cloud server to download the account’s transaction history. However, since this remote server was not included in the search and seizure warrant, the court highlighted the illegitimacy of the evidence.The appellate court also pointed out another issue with the evidence: documents stored on the CFO’s USB drive. The prosecution did not follow the legitimate search process, which requires them to extract only data related to the allegations. Moreover, the prosecutors did not present a warrant when confiscating the laptop of the Data Value Team’s lead, further undermining the credibility of their evidence.The court further stated that even if the remaining evidence provided by the prosecution was considered viable, it was still insufficient to substantiate the prosecution’s accusations.The prosecution, disagreeing with the decision of the appeals court, had escalated the case to the Supreme Court. However, the highest court in the nation sided with the ruling of the appeals court, effectively upholding the decision made at the appellate level.

Crypto.com Becomes Preferred Platform for Paypal’s PYUSDIn an ever-tightening integration of conventional financial systems with the realm of cryptocurrencies, Singapore’s Crypto.com has forged a strategic alliance with PayPal and Paxos.Photo by Brett Jordan on PexelsProviding liquidity for PYUSD trading pairsAccording to a press release published by the crypto trading platform on Thursday, the alliance will fortify Crypto.com’s status as the foremost exchange platform for PayPal’s USD-pegged stablecoin, PYUSD. The implications of this collaboration extend far and wide, affecting both individual retail traders and institutional investors.With this move, the platform solidifies its position as the premier destination for managing PYUSD, boasting the most extensive global liquidity for PYUSD trading pairs. PYUSD, masterminded by digital asset solutions firm Paxos Trust Company, is a stablecoin backed by US dollar deposits, short-term US Treasuries, and similar cash equivalents. This robust backing provides the digital asset with stability and dependability.Gathering momentumThe new stablecoin is rapidly gaining recognition and prominence, securing placements on major cryptocurrency exchanges such as Bitstamp, Coinbase, and Kraken. It also functions as a preferred payment option on platforms like BitPay and MetaMask. Most notably, the New York State Department of Financial Services has given its seal of approval to PYUSD, categorizing it under its coveted “green list” of regulated cryptocurrencies.The collaboration between Crypto.com, PayPal, and Paxos is an extension of their preexisting partnership that allowed users to fund the Crypto.com visa card using PayPal. Joe Anzures, Senior Vice President of Americas and Global Head of Payment Partnerships at Crypto.com, pointed towards Paxos’ status as a stablecoin issuer and emphasized the potential to connect more than 80 million Crypto.com users with cutting-edge crypto innovations while providing vital support to PayPal’s extensive global network of consumers and merchants. Anzures remarked:“Connecting our more than 80 million users to the latest crypto innovations, as well as supporting PayPal’s global network of consumers and merchants, will be pivotal in our continued pursuit of crypto to every wallet.”Importance of stablecoinsThe collaboration also shines a spotlight on the growing importance of stablecoins within the cryptocurrency ecosystem. As stablecoins continue to gain traction and become more accessible, this partnership is poised to expedite the widespread adoption of digital assets in the global financial landscape.In a related development, leading USD stablecoin issuer Circle struck up a strategic partnership earlier this month with Singapore super app Grab, with Circle’s Web3 services platform being integrated into the Grab app as part of the deal.Meanwhile, the local regulator, the Monetary Authority of Singapore (MAS), announced the outline of a new regulatory framework in respect of stablecoins in August.Crypto.com’s partnership with PayPal and Paxos represents a significant leap forward in the cryptocurrency space. The collaboration will likely boost the exchange’s reputation as a premier destination for PYUSD trading, fostering accessibility to cryptocurrencies and contributing to the ongoing convergence of traditional finance with the digital asset landscape.As stablecoins like PYUSD continue to garner regulatory approval and broader acceptance, the cryptocurrency ecosystem continues its journey toward mainstream recognition.

Binance Takes P2P Service Measures in Response to Sanctioned Russian BanksGlobal crypto exchange Binance has removed the option for users to conduct transactions via sanctioned Russian banks on its peer-to-peer (P2P) platform, a decision that comes on the heels of a Wall Street Journal exposé published earlier this week, shedding light on the platform’s involvement in facilitating the movement of funds for Russian users.Previously, Binance’s peer-to-peer service featured five Russian banks under sanctions as a method for ruble transfers between users. However, the company swiftly acted to address potential compliance concerns. Fittingly, this latest news was also broken by the Wall Street Journal on Friday.Dmitry Sidorov on PexelsSailing too close to the windWhen approached regarding the omission of these banks, a Binance spokesperson stated: “We regularly update our systems to ensure compliance with local and global regulatory standards. When gaps are pointed out to us, we seek to address and remediate them as soon as possible.”The Wall Street Journal’s article outlined how Binance’s peer-to-peer platform facilitated ruble-to-crypto trades that frequently involved the sanctioned Russian banks, with Rosbank and Tinkoff Bank being prominent examples.These trades often utilized layers of intermediaries to convert funds from these banks into Binance balances, as detailed by various company resources, user screenshots, and messages in official chat groups. Despite these revelations, Binance’s exchange had continued to handle significant volumes of ruble trading, according to data compiled by digital asset research firm CCData.US DoJ probeBinance’s activities in Russia could potentially contribute to its ongoing legal challenges in the United States. The US Justice Department (DoJ) has been probing the company’s actions for potential violations of American sanctions on Russia. In response to such concerns, the Binance spokesperson emphasized:“Binance aims to diligently comply with the global sanctions rules and enforces sanctions on people, organizations, entities, and countries that have been blacklisted by the international community, denying such actors access to the Binance platform.”WorkaroundsTraders, however, had reportedly found workarounds to the bank removals, as observed in the official Telegram chat group for Russian clients. Many shared that they could still engage with sanctioned banks by selecting alternative payment methods and then manually inputting their Rosbank or Tinkoff bank details.Earlier this year, an investigative report by CNBC alleged that employees of the company had told it that Binance staff regularly helped Chinese customers to bypass Know Your Customer (KYC) controls in order to access the platform. More recently, another report, once again by the Wall Street Journal, found that business in China was booming, which surprised many given that China banned crypto trading within the country in 2021.It’s apparent that the company is reacting to regulatory and legal pressures in taking the decision to make these changes to its P2P service. Perennial crypto critic US Senator Elizabeth Warren took to X (formerly Twitter) on Friday, stating:“I rang the alarm about sanctions evasion by Russia using the crypto platform Binance — and urged [the DoJ] to investigate potentially false statements it made to Congress. We need stronger crypto regulations to rein in illicit finance.“