Asia's weekly TOP10 crypto news (Feb 19 to Feb 25)

1. The Japanese Cabinet Approves New Proposal: Allowing Venture Capital Firms to Directly Invest in Cryptocurrency and Web3 Startups link

On February 16th, the Ministry of Economy, Trade, and Industry of Japan announced that the Japanese Cabinet has approved a proposal to add cryptocurrencies to the list of assets that local investment limited partnership companies can purchase or hold. If the revision of this law is realized, Japanese venture capital (VC) will be able to invest in projects that issue only virtual currencies, lowering the barriers for Japanese Web3 companies to raise funds and conduct business. Previously, Japanese venture capital firms were unable to directly invest in crypto assets.

2. South Korea’s Weekly Summary

2.1 Both Ruling and Opposition Parties in South Korea Make Favorable Commitments to the Crypto Market link

Both the ruling party and the opposition party in South Korea have made favorable commitments to the cryptocurrency market as part of their election campaign activities scheduled for April. These commitments include delaying cryptocurrency taxation, launching spot Bitcoin ETFs, allowing IEO/ICO, relaxing institutional investors’ investments in cryptocurrencies, and refining STO legislation. The Democratic Party has officially announced its commitment to cryptocurrency-related public opinion surveys, while the ruling People Power Party is expected to make its announcement later this week.

2.2 Gyeonggi-do, South Korea, Implements Digital Tracking System to Aid in the Retrieval of Taxes from Cryptocurrency Tax Evaders link

In South Korea, the most populous province of Gyeonggi-do has implemented a digital tracking system for the first time to help recover debts from cryptocurrency tax evaders. Among the identified 5,910 violators, 2,390 individuals have paid a total of $4.6 million in fines. The process involves using the phone numbers of violators registered locally in South Korea to trace accounts associated with cryptocurrency exchanges.

3. Terra Founder Do Kwon to Be Extradited to the United States link

According to local Montenegrin media outlet “Pobjeda,” the High Court of Podgorica has announced that Do Kwon will be extradited to the United States, where he is wanted for criminal offenses in the financial sector. On March 23, 2023, Do Kwon and his partner Hon Čand Jun were arrested at the Podgorica airport while attempting to fly to Dubai using fake Costa Rican passports. Hon Čand Jun was extradited to South Korea ten days ago.

Do Kwon’s defense lawyer, Goran Rodic, stated that they will appeal the illegal ruling of the Montenegrin court approving Do Kwon’s extradition to the United States because the court did not verify the accuracy of the facts and will disclose details during the upcoming appeal.

4. Hong Kong’s Weekly Summary

4.1 Hong Kong Monetary Authority Releases Guidance on Digital Asset Custody Services link

The Hong Kong Monetary Authority (HKMA) has issued guidance on the provision of digital asset custody services by authorized institutions, drawing on international standards and practices. The guidance outlines expected standards and requirements for governance and risk management, segregation of customer digital assets, protection of customer digital assets, delegation and outsourcing, disclosure, record-keeping and reconciliation of customer digital assets, anti-money laundering and counter-terrorist financing, as well as ongoing monitoring. Authorized institutions should apply these standards to protect customer assets whether they are acting as intermediaries in virtual asset-related activities, tokenizing assets, or providing standalone custody services.

4.2 Hong Kong Monetary Authority Issues Circular on the Sale and Distribution of Tokenized Products link

The Hong Kong Monetary Authority (HKMA) has issued a circular on the sale and distribution of tokenized products, outlining the expected regulatory standards that recognized institutions must adhere to when selling and distributing tokenized products to customers. As a general principle, the existing regulatory provisions regarding the sale and distribution of certain products and consumer/investor protection measures also apply to products sold and distributed in tokenized form. This is because the terms, characteristics, and risks (excluding risks arising solely from tokenization) are similar to those of related products. In addition to general principles, recognized institutions should implement consumer/investor protection measures related to due diligence, disclosure, and risk management for tokenized products.

5. The Mainland of China’s Weekly Summary

5.1 China’s Supreme People’s Procuratorate: Emergence of New Types of Cybercrime Utilizing Virtual Currency, Metaverse, and Blockchain link

On February 23, 2024, the Supreme People’s Procuratorate of China held a press conference titled “Punishing Cyber Crimes According to Law, Assisting in the Comprehensive Governance of Cyberspace,” stating that with the advent of new technologies and formats, the black and gray industries are accelerating iteration and upgrading. New types of cybercrimes using metaverse, blockchain, binary futures platforms, etc., as gimmicks continue to emerge, and virtual currency has become a new area of cybercrime. From January to November 2023, procuratorial organs prosecuted a total of 280,000 people for various cybercrimes, a year-on-year increase of 35.5%, accounting for 18.8% of all criminal offenses. Furthermore, the press conference indicated that “money laundering” with virtual currency has become a mainstream method, with low-income groups being exploited to help criminals transfer defrauded funds in “small amounts and multiple transactions.”

5.2 China’s Ministry of State Security: Overseas Mapping Companies Induce Domestic Personnel to Illegally Collect Sensitive Geospatial Information Data link

The Chinese Ministry of State Security issued a document on Tuesday, indicating that certain overseas mapping companies are enticing domestic individuals to purchase and utilize specialized equipment for map “check-ins” in exchange for virtual currency rewards. This method involves the illegal collection of sensitive geographic spatial information data.

6. Bright Dairy Industry and Shanghai Data Exchange Complete Interconnection of Digital Asset Issuance and Trading Platforms link

Recently, Bright Dairy teamed up with the Shanghai Data Exchange to become the first to complete the interconnection between the digital asset issuance platform and the digital asset trading platform. They jointly issued the first tradable digital asset named “Dragon Shine with Light, Brightness in Order”. The official statement is: this is the first demonstration case of dual-platform interconnection for the issuance and trading of digital assets in brand marketing application scenarios. According to the announcements from both parties, the limited tradable digital assets first issued by Bright Dairy are based on the “Bright Heart’s Desire” IP image, extending into the new national trend style of New Year paintings, with a total issuance of 999 units.

7. Huobi HK’s Application for a Virtual Asset Trading Platform License has been Withdrawn link

The official website of the Securities and Futures Commission (SFC) of Hong Kong indicates that the virtual asset trading platform license application submitted by Huobi HK has been withdrawn. According to the information provided, the virtual asset trading platform operator company name submitted by Huobi HK is “HBGL Hong Kong Limited”, with the application submitted on February 20, 2024, and the withdrawal of the application on February 23, 2024. As disclosed by the SFC, reasons for the rejection, withdrawal, or refusal of license applications include but are not limited to: incomplete applications and/or unresolved significant issues prompting the SFC to return the application; and refusal or withdrawal of the license application.

8. FalconX Expands into Hong Kong and Plans to Offer OTC Brokerage and Cryptocurrency Derivatives Services to Professional Investors link

FalconX, a leading digital asset prime brokerage firm, has announced its expansion into Hong Kong, aiming to offer over-the-counter brokerage and cryptocurrency derivatives services to professional investors in the region. These professional investors include proprietary trading firms, family offices, and fund managers. Matt Long, the Asia-Pacific Regional Manager at FalconX, remarked, “The regulatory framework for virtual assets and over-the-counter derivatives in Hong Kong is evolving.” Previously, FalconX expanded into the Asia-Pacific market by entering Singapore in February 2023.

9. Gaming Blockchain Oasys Partners with Kakao Games Subsidiary METABORA SG link

The Japanese blockchain gaming platform Oasys has collaborated with Metabora SG, the Web3 gaming division of the South Korean internet giant Kakao, to support the expansion of game publishers into the Japanese market. Last week, Oasys announced a partnership with another South Korean game developer, Com2uS, with plans to integrate their games into the Oasys blockchain platform.

10. Chainalysis: Company Operated in Myanmar Scams More Than $100 Million in Less Than Two Years link

Blockchain analytics company Chainalysis, in collaboration with the anti-slavery organization International Justice Mission (IJM), has revealed that a company operating in Myanmar scammed over $100 million from victims in less than two years. According to Chainalysis’ tracking of USDT, these assets were utilized to transfer funds from victims of Ponzi schemes. Their analysis indicates that USDT was also used to make payments to a company located in a park called KK Park in eastern Myanmar, with the funds allegedly originating from families of trafficked workers who were forced to pay ransom for their release.