Asia's weekly TOP10 crypto news (Feb 5 to Feb 11)

Feb 11, 2024

1. The United Nations Investigates $3 Billion Worth of 58 Cryptographic Network Attacks Originating from North Korea link

The United Nations sanctions monitors are investigating 58 suspected cyberattacks by North Korea against cryptocurrency-related companies between 2017 and 2023, valued at approximately $3 billion. According to reports, these attacks have provided funding for North Korea’s development of weapons of mass destruction.

2. Hong Kong’s Weekly Summary

2.1 The Hong Kong General Chamber of Commerce Proposes Consideration of Issuing CNY Stablecoin and Establishing a Virtual Asset Interconnection Plan link

The Hong Kong General Chamber of Commerce has submitted a proposal regarding the upcoming “Budget Address” by the Financial Secretary. Agnes-chan, the Vice Chairman of the Hong Kong General Chamber of Commerce, suggested that the Hong Kong government consider allowing the issuance of a CNY stablecoin or a stablecoin pegged to a basket of currencies (including CNY, Hong Kong Dollar, or US Dollar stablecoins). Additionally, she proposed establishing a Virtual Asset Interconnect Scheme, initially capping the daily trading volume at around HK$20 billion.

2.2 Hong Kong Initiates Legislative Consultation on Cryptocurrency Over-the-Counter Trading link

The Hong Kong government has announced the commencement of public consultation on the proposed legislation for the establishment of a licensing regime for over-the-counter virtual asset trading service providers. Key points of emphasis include: individuals or entities offering any virtual asset and money spot trading services in Hong Kong must apply for a license from the Commissioner of Customs and Excise. The draft also suggests considering similar exemptions for licensed stablecoin issuers after the implementation of the stablecoin issuer licensing regime. Anyone engaging in regulated over-the-counter virtual asset trading services without a license may face a fine of HK$1 million and imprisonment for two years upon conviction through legal proceedings. Additionally, it is considered a criminal offense for anyone to knowingly advertise non-licensed individuals providing over-the-counter virtual asset trading services, punishable by a Level 5 fine (currently HK$50,000) and imprisonment for six months.

2.3 Hong Kong Securities and Futures Commission Warns Public to Beware of Suspicious Investment Products Related to “Hong Kong International Financial Center Token (IFCT)” link

The Securities and Futures Commission (SFC) of Hong Kong has cautioned users to beware of suspicious investment products, projects, and arrangements related to the “Hong Kong International Financial Center Token (IFCT).” The promotional materials associated with this product claim that it has been officially approved in Hong Kong, but in reality, it has not been authorized by the SFC for offering to the Hong Kong public. The SFC has included this product and its related information in the list of suspicious investment products as of February 7, 2024.

3. South Korea’s Weekly Summary

3.1 South Korea Arrests Haru Invest Executives, Accusing Them of Embezzling $826 Million link

On Monday, South Korean prosecutors announced the arrest and detention of three executives from the cryptocurrency investment platform Haru Invest. Prosecutors in Seoul have accused the trio of embezzling cryptocurrency worth approximately 11 trillion Korean won (about 8.26 billion US dollars) from around 16,000 users. Haru Invest had claimed to offer returns of up to 12% for users of its Earn Plus product, allegedly misleading depositors about its risks.

3.2 Wemade Under Investigation by South Korean Prosecutors for Allegedly Evading Reporting Responsibilities link

South Korean blockchain gaming giant Wemade is currently under investigation by local prosecutors. Prosecutors are examining whether the decentralized exchange PNIX and its digital asset storage system, Play Wallet, associated with Wemade, have been withholding private keys from users, which would violate South Korean regulations. Wemade’s WEMIX team has responded to these allegations, stating that PNIX DEX and Play Wallet services are not bound by compliance requirements.

3.3 South Korea’s Financial Services Commission to Prohibit Illegal Virtual Asset Transactions Starting July link

The Financial Services Commission of South Korea has announced the legislative preview of the “Virtual Asset User Protection Act” and the “Regulations on the Regulation of the Virtual Asset Industry” before its implementation on July 19. The new regulations explicitly prohibit market manipulation, illegal transactions, and the use of undisclosed material information for virtual asset trading. Violators may face imprisonment for more than one year or fines ranging from three to five times the illegal gains. If the illicit gains exceed 5 billion Korean won, they could be sentenced to life imprisonment and fined twice the amount of the unlawful gains.

4. Japanese Financial Services Agency Releases Tokenized Employee Rights Regulation Easing Plan link

The Japanese Financial Services Agency has announced amendments to the definition of Article 2 of the Financial Instruments and Exchange Act, aiming to grant limited liability company-type DAO members the same treatment as regular LLC members regarding rights tokens. This measure is expected to relax regulatory oversight on the rights of tokenized limited liability company employees and streamline DAO operations.

5. Thailand Announces Exemption of Value-Added Tax (VAT) on Digital Asset Transactions link

The Ministry of Finance of Thailand has announced the exemption of value-added tax (VAT) on digital asset transactions to propel Thailand into a digital asset hub. Secretary to the Minister of Finance, Paopoom Rojanasakul, expressed the ministry’s aim to foster digital assets as a new fundraising option. The tax exemption policy took effect on January 1, 2024, with no expiration date. Previously, VAT exemption for digital asset transactions applied only to authorized digital asset exchanges, but now includes brokers and traders regulated by the Securities and Exchange Commission (SEC). Thailand has emerged as one of the preferred destinations for overseas digital asset investors.

6. NXC Seeking to Sell All Its Shares in Cryptocurrency Exchange Korbit link

The South Korean gaming behemoth Nexon’s holding company, NXC, is seeking to divest its 48% stake in Korbit, one of the top 5 domestic cryptocurrency exchanges in the country. NXC acquired 62% of Korbit’s shares in 2017 for 93 billion Korean won, but its stake was diluted after SK Group’s investment company, SK Square, became the second-largest shareholder in 2021. Korbit’s performance has deteriorated continuously over the 6 years since its acquisition by NXC, with net operating losses increasing from 7.5 billion Korean won in 2018 to 35.8 billion Korean won in 2022, and it is expected to continue facing deficits in 2023.

7. South Korea’s DAXA Accuses OKX of Operating Locally Without Proper Registration link

The Korean Digital Asset Exchange Association (DAXA) has reported OKX to local authorities, alleging its unauthorized operation in the area, specifically through Telegram Key Opinion Leaders (KOLs) promoting its Jumpstart program to local cryptocurrency users. A spokesperson for DAXA stated that they do not have the authority to adjudicate OKX’s alleged violations, and the decision will be made by the financial intelligence department. It is anticipated that the financial intelligence department, a regulatory body under the Financial Services Commission (FSC), will conduct an investigation into OKX following DAXA’s report.

8. Montenegro Court of Appeals Revokes Decision on Extradition Request for Do Kwon link

Official documents reveal that the Montenegro Court of Appeals accepted the appeal from the defense counsel of the defendant Do Kwon on February 7, 2023. The court overturned the decision of the High Court in this case, remanding the case to the trial court for retrial and judgment. The Court of Appeals found significant procedural errors in the original judgment and a lack of clarity regarding the sequence of extradition of the defendant to South Korea and the United States. Previously, on December 19, 2023, the Court of Appeals had rejected the decision of the Montenegro High Court regarding the extradition of Do Kwon to South Korea or the United States. The High Court filed this appeal again on January 15.

9. OSL Announces Participation in Investment-Grade Tokenized Stock Warrants Issuance by UBS Group in Hong Kong link

On February 9th, OSL Digital Securities Limited announced its participation in the issuance of investment-grade tokenized warrants by UBS Group in Hong Kong, serving as a pilot for simulated sales. The project, initiated by UBS Group, involves the issuance of subscription warrants linked to stocks on the Ethereum public blockchain to OSL Digital Securities Limited. OSL is simulating the entire product lifecycle of tokenized structured products linked to stocks, from token minting to simulated secondary market trading, culminating in the destruction of tokens upon expiry.

10. Ethiopia Emerges as One of the Most Preferred Destinations for Chinese Miners link

Mining service provider Luxor Technology estimates that Ethiopia has become one of the world’s largest recipients of Bitcoin mining machines. Luxor Technology stated that it has reached power supply agreements with 21 Bitcoin mining companies, all but two of which are Chinese. Ethiopia has allowed Bitcoin mining since 2022 but still prohibits cryptocurrency trading. The Ethiopian government permits Bitcoin mining primarily because these companies pay for their electricity consumption in foreign currency. Currently, the government has issued a directive to regulate “crypto products,” including mining.

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