Research Summary

The report provides an overview of recent regulatory news and developments in the cryptocurrency sector across Hong Kong, South Korea, Thailand, and Japan. It also highlights the actions of various financial authorities, the launch of Thailand’s first Bitcoin ETF, and the challenges faced by certain crypto businesses.

Key Takeaways

Hong Kong’s Push for Web3 and Crypto Expansion

  • Web3 Promotion in Europe: Christopher Hui, Secretary for Financial Services and the Treasury of Hong Kong, visited the Netherlands, Spain, and Portugal to promote Hong Kong’s fintech sector and its efforts in building a sustainable Web3 ecosystem.
  • Approval of More Cryptocurrencies: Hong Kong regulators are set to approve more cryptocurrencies following the receipt of licenses by HashKey. This could increase the number of cryptocurrencies available for retail investors in the coming months.

South Korea’s Regulatory Actions and Developments

  • Investigation into Troubled Crypto Exchanges: South Korean financial authorities found that 7 out of 10 inspected virtual asset service providers (VASPs) failed to properly return users’ assets. Strict measures will be taken against these violations.
  • Establishment of Virtual Asset Division: The South Korean Financial Services Commission (FSC) plans to establish a new “Virtual Assets Department” by the end of June to address the forthcoming implementation of the “Virtual Asset User Protection Act” on July 19.
  • Inclusion of Virtual Asset Crimes in Prosecutors’ Scope: The South Korean Ministry of Justice has included virtual asset crimes within the scope of direct investigation by prosecutors, with penalties including prison sentences and fines.

Thailand’s First Bitcoin ETF

  • Approval of Bitcoin ETF: The Thai Securities and Exchange Commission (SEC) has approved One Asset Management (ONEAM) to launch the country’s first Bitcoin ETF, targeting high-net-worth individuals and institutional investors.

Japan’s Response to Crypto Theft

  • Order to DMM Bitcoin: Japan’s Financial Services Agency has ordered DMM Bitcoin to investigate the cause of the unauthorized outflow of crypto assets and submit a customer compensation plan. The theft involved Bitcoin worth approximately $300 million.

Challenges Faced by Crypto Businesses

  • Closure of Bithumb Meta’s NFT Trading Platform: South Korea’s Bithumb Meta’s NFT trading platform, NAEMO Market, will cease operations due to prolonged losses amid a downturn in NFT and metaverse-related businesses.
  • Bankruptcy of Rivermen: The NFT project Rivermen declared bankruptcy due to mismanagement, leading to unpaid labor compensation totaling 591,692 yuan.

Actionable Insights

  • Monitor Regulatory Developments: Stakeholders should keep a close eye on regulatory developments in key markets such as Hong Kong and South Korea, as these could significantly impact the crypto landscape.
  • Assess Risks in Crypto Investments: The challenges faced by Bithumb Meta and Rivermen highlight the risks in the crypto sector. Investors should conduct thorough due diligence before investing in crypto businesses.
  • Consider Opportunities in Emerging Markets: The approval of Thailand’s first Bitcoin ETF indicates growing acceptance of cryptocurrencies in emerging markets, presenting potential opportunities for investors and businesses.

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