Lưu trữ cho từ khóa: Regulation

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South Korean regulator to review crypto ETF approval: report

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South Korea’s financial watchdog is reportedly set to review the approval of spot crypto ETFs and the legalization of corporate crypto accounts through a newly formed committee.

South Korea, which has been cautious in its approach to crypto regulation, is now considering the approval of spot crypto exchange-traded funds and corporate crypto accounts through its newly established Virtual Assets Committee.

According to a News1 Korea report on Oct. 10, the committee, chaired by the Financial Services Commission’s vice chairman, will include representatives from several government ministries and private-sector experts. While Bitcoin (BTC) and Ethereum (ETH) have secured approval from regulators for spot ETFs in the U.S. and Hong Kong, South Korea has yet to allow such products, and corporate crypto accounts remain prohibited.

However, the report does not indicate a specific timeline for when South Korean authorities will review the approval of crypto ETFs.

South Korea speeds up with crypto regulation

The move comes as the Korean regulatory body faces mounting calls for reform in these areas as the domestic crypto market evolves. Currently, the FSC is processing renewal applications for virtual asset service providers that first registered in 2021, as the regulator pushes amendments to the Specific Financial Information Act, designed to enhance oversight of market manipulation and unfair trading practices, the report notes.

The FSC reportedly also indicated it is considering “Phase 2 legislation,” which would focus on tighter regulatory controls for crypto businesses, such as issuance and listing requirements, following the recent enactment of the Virtual Asset User Protection Act, introduced in July.

South Korea has been gradually expanding its crypto oversight, focusing on balancing market growth with investor safeguards. As a result, major domestic crypto trading platforms, such as Upbit, have come under increased scrutiny, with the FSC recently investigating the exchange’s dominance and ties with K Bank.

Upbit, which holds around 80% of the local market, is the country’s largest crypto exchange and ranks fifth globally by 24-hour trading volume.

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Paxos expands yield-bearing stablecoin USDL to Arbitrum

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Paxos International has launched its yield-bearing stablecoin Lift Dollar on Ethereum layer-2 network Arbitrum.

The UAE-based subsidiary of Paxos, regulated by Abu Dhabi’s Financial Services Regulatory Authority, announced the expansion of Lift Dollar (USDL) to Arbitrum (ARB) on Oct. 9.

Paxos’ announcement comes just a few weeks after the company revealed plans to bring its products to the Ethereum (ETH) layer 2 scaling solution.

What is Lift Dollar?

USDL is a stablecoin pegged 1:1 to the U.S. dollar and offers yield from its reserves — cash and cash equivalents — to its holders. Lift Dollar uses an Ethereum smart contract to distribute its yield to eligible wallets daily without holders needing to take any additional steps.

With Lift Dollar being a regulated yield-bearing token, developers on the Arbitrum network now have another asset they can tap into to build and deploy new applications that drive DeFi growth.

A.J. Warner, chief strategy officer at Offchain Labs, noted that the addition of USDL is a boost to Arbitrum. The stablecoin allows for cost-effective and fast transactions across the L2 network, Warner said, with applications and use cases that will benefit from this, including those across gaming, social, and decentralized finance.

These are ecosystems that are increasingly gaining greater traction amid the expansion of stablecoin use globally. Paxos is one of the major players alongside Tether and Circle.

Paxos and Arbitrum partnership

Paxos International launched Lift Dollar in June 2024, with USDL distributed via partnerships with major crypto exchanges, wallets and trading platforms.

While the company allowed issuance to individuals and institutions, it noted that consumers in certain jurisdictions were not eligible. Such markets included the United States, the United Kingdom, Canada, Hong Kong, and the European Union, among others.

In September 2024, Paxos announced plans to integrate with Arbitrum. The partnership aimed at facilitating institutional integration across the Arbitrum network, with Paxos helping to bring real-world assets onto the platform via its regulated assets.

Paxos issues several other regulated digital assets, including Pax Dollar (USDP), PayPal USD (PYUSD) and Pax Gold (PAXG).

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Korea eyes FX rules for stablecoins used in cross-border trade: report

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South Korea is planning to impose foreign exchange controls on stablecoins, underscoring the government’s concerns over their growing use in cross-border trade.

South Korea is weighing the introduction of foreign exchange controls on stablecoins, reflecting government concerns over their growing use in cross-border trade, The Korea Economic Daily has learned. The Ministry of Economy and Finance is reportedly reviewing measures to enhance the stability of crypto transactions, particularly those involving stablecoins.

While stablecoins have been widely used only within the cryptocurrency ecosystem, the ministry believes that they may soon function as a payment and transaction method in the real economy. Concerns have been raised that these assets are operating outside government oversight, posing risks to the stability of South Korea’s foreign exchange market, the report reads.

Though no specific timeline has been announced, the Financial Services Commission is expected to prioritize discussions on stablecoin regulation in its forthcoming legislative efforts, drawing from regulatory frameworks established in Japan and the European Union.

The potential regulatory shift follows the South Korean government’s broader efforts to tighten oversight of the local crypto market. As crypto.news reported, Korean crypto exchanges, such as Upbit, Bithumb, and Coinone, will soon be obligated to pay an oversight fee to the Financial Supervisory Service of South Korea beginning next year as the country steps up its regulatory framework for the crypto sector.

Local industry representatives initially suggested delaying the imposition of supervisory fees on crypto operators. However, the decision to implement these fees was expedited due to upcoming inspections by the FSS following the enforcement of the Virtual Asset User Protection Act.

The new law introduces several requirements for crypto exchanges, including a mandate to keep at least 80% of users’ assets in cold storage. These assets must be kept separate from company funds and invested in “risk-free” assets to generate a yield. Additionally, exchanges must reassess listed assets by verifying their circulation and reviewing their whitepapers, with any assets that fail to meet the criteria required to be delisted.

The recent enforcement follows the postponement of a 20% crypto gains tax by South Korea’s Ministry of Economy and Finance, with reports indicating that the ruling party may delay the tax until 2028.

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Bitcoin

Bhutan’s path to economic self-reliance is Bitcoin mining | Opinion

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It’s time to start learning Dzongkha. That’s the language of Bhutan, a South Asian country on the Himalayas’ eastern edge that is one of two confirmed nation-states mining Bitcoin (BTC) today (the other being El Salvador).

Bhutan made the fateful decision to build out a world-class hydroelectric power production infrastructure in order to leverage one of the largest water reserves in the world, as well as the country’s dramatic attitudinal change, which creates swift-flowing rivers and makes Bhutan a natural haven for hydroelectric. 

With so much abundant electricity, much of which is sent to neighboring and energy-deficient India, the nation decided to begin building bitcoin mines with the official goal of ensuring the nation’s economic self-reliance and socio-economic development. 

Indeed, by leveraging its hydropower infrastructure to mine Bitcoin, Bhutan ensures its own self-reliance and socio-economic development. It can ensure these even further by being the first nation on planet Earth to adopt a Bitcoin standard.

Mining Bitcoin now creates new currency possibilities

Bhutan today holds over 13,000 BTC, according to Arkham Intelligence, which first identified Bhutan’s Bitcoin addresses. 

The holdings make Bhutan the fourth-largest government holder of Bitcoin in the world behind nations which confiscated their BTC during law enforcement busts: US, China, and UK. Bhutan is, in fact, ahead of El Salvador’s holdings. And since 2023, Bhutan has only increased its Bitcoin mining capabilities.

One million people make up the population of Bhutan, from the tropical southern plains to the brutal winters and cool summers of the northern Himalayas. And so, at the time of writing, the nation’s holdings from Bitcoin equals approximately 0.122 BTC per person or nearly $8,000.

As Bhutan’s Bitcoin holdings and mining infrastructure gain more domestic and geopolitical relevance with the devaluation of fiat currencies worldwide, Bhutan will find itself in a prime position to innovate in the realm of monetary policy and Bitcoin. 

On a Bitcoin standard, Bhutan could keep its monetary unit, Ngultrum. That would be in keeping with countries pegging their own individual national currencies to gold under the gold standard of the nineteenth and early twentieth century, while keeping their own currencies.

Thus, Bhutan’s currency would circulate alongside Bitcoin, whilst simultaneously pegged to Bitcoin. In other words, the notes would be redeemable for BTC. The currency would remain fiduciary, since it is not fully backed by bitcoin. 

Under the gold standard, central banks partially backed the issued notes with gold. Bhutan’s monetary authority would presumably define the amount of bitcoin to peg to the monetary unit. 

However, there would be sacrifice on the side of the state under a Bitcoin standard. If it were to adopt a Bitcoin standard, Bhutan would not be able to conduct an interest rate policy to change domestic economic conditions without depegging from Bitcoin—something any nation-state might eventually be tempted to do.

The times are changing in Bhutan

Bhutan didn’t have electricity until 1966. For comparison, England opened its first hydroelectric plant in 1878, and the US opened its first power plant in 1882. Despite being ranked 133rd in terms of land area and 160th in population today, Bhutan is proving itself a 21st-century leader. 

The nation’s investment in hydropower has fueled economic growth already. Bhutan’s decision to exploit its water resources for the production of electric, and the decision to use some of this electricity to mine Bitcoin, could drastically change the economic outlook of the landlocked country based on its Bitcoin accumulation alone.

By backing the Ngultrum with Bitcoin, Bhutan would shock the known universe by going on a bitcoin standard just like the world used to be on the Classical Gold Standard. Bhutan could draw up the Bitcoin standard  “rules of the game” that countries will follow as they too adopt a better way of life than central bank fiat currencies. 

If Bhutan adopts a Bitcoin standard, it might one day act as a lender of last resort for countries and institutions facing acute crises. Under a Bitcoin standard, as argued by Warren E. Weber for the Bank of Canada in his 2015 thought experiment, Bhutan might expect “mild deflation, low nominal interest rates, and good output growth under the Bitcoin standard.”

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Worldcoin shifts focus from Europe to Asia amid GDPR challenges

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Worldcoin is shifting its focus from Europe to Asia, seeking markets more receptive to its biometric technology.

Worldcoin, the crypto biometrics initiative co-founded by Sam Altman, is shifting its focus from Europe to Asia in search of markets that are more open to innovative technologies.

In an interview with Sifted, Fabian Bodensteiner, managing director of the company’s European operations, noted that Worldcoin aims to target markets where local companies and governments are more receptive to emerging technologies.

“I would not say that [Europe] is a large focus. We just see a larger dynamic in other regions of the world and because we are not 1,000 employees we need to prioritize where we see the biggest business opportunities.”

Fabian Bodensteiner

The technology behind Worldcoin, developed by Tools For Humanity, now faces regulatory scrutiny, with Bavaria’s data protection authority expected to announce a decision later this month that could impact its operations in Europe, the report notes.

In May, Hong Kong’s privacy regulator found that Worldcoin contravened local privacy laws, saying the San Francisco-headquartered startup poses risks to privacy associated with the way how it handles biometric data. The Privacy Commissioner, Ada Chung Lai-ling said the face and iris images collected by the Worldcoin project were “unnecessary and excessive,” violating local rules.

In a commentary to crypto.news, a spokesperson for the Worldcoin Foundation said the company “operates lawfully and is designed to be fully compliant with all laws and regulations governing data collection and use.”

Despite these challenges, Worldcoin has expanded into Poland and Austria this year and continues operations in Germany. While Europe is no longer the company’s primary focus, Bodensteiner stressed that Worldcoin is not pulling out entirely, saying “we want to stay in the conversation and we want to stay committed to the market.” As of press time, (WLD) is up 4.44%, trading at $1.92.

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Hong Kong’s SFC set to approve batch of new crypto licenses by end of year

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The Hong Kong Securities and Futures Commission plans to approve a batch of new crypto licenses by the end of this year. So far, there are 11 crypto platforms being considered for licenses.

In an interview with news outlet Hong Kong 01, CEO of the China Securities Regulatory Commission, Liang Fengyi, announced that the SFC will be giving out licenses in batches to Virtual Asset Trading Platforms.

The SFC has recently issued three licenses for crypto exchanges operating in the region, including the Hong Kong Virtual Asset Exchange, OSL Exchange and HashKey Exchanges.

Apart from the three licensed platforms, 11 other platforms have applied for an SFC-issued licenses and are currently awaiting approval.

Liang Fengyi explained that regulators have carried out the first phase of on-site reviews and have asked applicants to make the necessary corrections.

She stated that the SFC aims to make significant progress on regulating virtual assets by the end of the year, by issuing a batch of licenses for VATPs.

“Applicants who do not meet the requirements will lose their qualifications for licensing, while applicants who meet the requirements will be granted a license conditionally,” said Fengyi.

As part of their 2024-2026 strategy, Liang Fengyi said that Hong Kong regulators will promote the development of regulations for virtual asset trading platforms, support the tokenization of traditional products, and using regional chains and web3 basic technologies.

“The entire framework will be completed at least next year,” she said.

In regards to cryptocurrency over-the-counter services, Liang Fengyi pointed out that the CSRC has created a new licensing system for crypto OTC custody services to receive feedback from industry players.

In mid Sept. 2024, Hong Kong’s Securities and Futures Commission began working together with the Customs and Excise Department issuing licenses for over-the-counter crypto trading services. At the time, crypto platforms in Hong Kong struggled to get licenses due to not meeting government standards on client asset management and failure to properly anticipate cybersecurity risks.

On Sept. 30, ZA Bank became the first virtual assets bank in Hong Kong to gain a license from the SFC after a year-long review process.

Licenses have become vital for crypto platforms operating in Hong Kong as financial regulators have tightened restrictions on unlicensed exchanges and the development of a regulated crypto ecosystem.

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India’s officials probe crypto exchange WazirX over $235m hack: report

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Officials from India’s Financial Intelligence Unit and other agencies are probing WazirX over a $235 million crypto hack, as the exchange investigates potential insider involvement.

Indian cryptocurrency exchange WazirX is collaborating with government agencies, including the Financial Intelligence Unit, to address the aftermath of a cyberattack that resulted in the theft of $235 million from its wallet in July, Moneycontrol has learned, citing sources close to the matter.

The exchange has reportedly provided authorities with detailed server logs, transaction trails, and blockchain addresses related to the hack. While no physical assets have been seized, WazirX continues to engage in multiple meetings with regulatory bodies, the report reads.

The FIU has also reached out to other stakeholders in the crypto sector to assess the broader implications of the hack, which has raised concerns about the unregulated nature of the industry and its impact on retail investors.

WazirX plans to publicly disclose wallet addresses through court affidavits and respond to user queries as part of its commitment to transparency. The exchange aims to form a 10-member committee of creditors by Oct. 9 to guide its restructuring efforts, with hopes of returning 52-55% of the remaining crypto assets to clients within six months.

WazirX’s parent company, Zettai, has reportedly also initiated discussions with 11 potential partners, receiving preliminary proposals aimed at enhancing user recoveries through capital injections and profit-sharing strategies, though details of those talks remain unclear.

WazirX incurred a $235 million loss from the July 18 cyber-attack, which severely impacted the exchange and led it to seek a Scheme of Arrangement in Singapore, a restructuring process under local insolvency laws. An independent audit by Grant Thornton later found no evidence implicating Liminal Custody’s infrastructure — at the time, WazirX’s custodian partner — in the multi-million dollar hack.

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Crypto ETP giant 21Shares urges European regulator to bring regulatory clarity

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21Shares has urged the European Securities and Markets Authority to create a “much-needed clarity” for retail and institutional crypto investors across Europe.

Crypto investment firm 21Shares is pressing the European Securities and Markets Authority to establish clearer guidelines for including crypto assets in Undertakings for Collective Investment in Transferable Securities funds, addressing regulatory inconsistencies across Europe.

In a Monday press release, on Oct. 7, the Zurich-headquartered firm said that the move aims to address regulatory inconsistencies across Europe, which currently lead to confusion for both retail and institutional investors.

While some European countries, such as Germany and Malta, permit UCITS funds to hold crypto, others like Luxembourg and Ireland do not, the firm says, adding that such a fragmented approach creates “confusion, making it difficult for investors to understand and compare their options.”

“The lack of a common approach can lead to gaps in investor protection, as investors have to access the asset through other means, often more expensive and less professionally managed.”

21Shares

The firm has proposed that ESMA introduce clear, consistent guidelines for indirect exposure to crypto across all EU member states, arguing that this would help ensure a “high level of protection for investors,” while enabling broader access to crypto investments.

The proposal comes as ESMA considers feedback from its recent consultation on the inclusion of new asset classes, including crypto, in UCITS funds. While market participants are watching for ESMA’s next steps, the timeline for any potential regulatory changes remains unclear.

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Coinbase to delist non-compliant stablecoins for EU clients over MiCA rules

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Crypto exchange Coinbase is set to delist unauthorized stablecoins from its European branch by year-end, in response to incoming MiCA regulations.

U.S.-based cryptocurrency exchange Coinbase will remove all non-compliant stablecoins from its European exchange by the end of this year, as the company moves to comply with the European Union’s new crypto regulations, Bloomberg has learned.

The Markets in Crypto-Assets framework, which came into effect in June for stablecoin issuers, requires companies to hold e-money authorization in at least one Europe’s member state. Further regulatory guidelines for exchanges like Coinbase will be enforced starting Dec. 31.

A spokesperson for Coinbase told Bloomberg that the exchange plans to restrict services related to non-compliant stablecoins, including Tether’s (USDT) by Dec. 30. The exchange will provide users with an update in November, outlining options to convert their holdings to alternatives such as Circle’s USD Coin (USDC).

In early July, French blockchain analytics firm Kaiko said in a research note that Circle has benefited from the MiCA regulations, with its stablecoins experiencing significant increases in daily trading volumes following the introduction of the new requirements.

Still, industry leaders have expressed concerns about the regulations. For instance, Tether CEO Paolo Ardoino cautioned that stringent cash reserve requirements could pose systemic risks to banks.

The delisting trend is not limited to stablecoins as Kraken recently announced it would halt trading and deposits of Monero (XMR) in the European Economic Area due to regulatory changes, following similar moves by Binance and OKX.

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