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South Korean regulators plan to screen and approve crypto executives

South Korean regulators plan to screen and approve crypto executives
Terraform Labs founder Do Kwon is back in the news as his colleague Han Chang-joon was extradited to South Korea. Credit: Andrés Tapia
Asia Dispatch
  • South Korean regulators seek stronger oversight of crypto sector.
  • The JPEX scandal is voted the top crypto story in Hong Kong.
  • Regulators turn to videos to warn investors about the risks of crypto.

The South Korean Financial Services Commission proposed new legislation on Monday to bring greater oversight to the crypto industry — including vetting executives at crypto companies.

The agency wants companies to seek approval for the appointment of new executives, and those convicted of certain crimes would be barred from taking their positions.

The proposals come after a busy week in the South Korean crypto crime world.

Montenegro extradited Terraform Lab’s CFO Han Chang-joon to South Korea to face fraud charges. He fled the nation with Do Kwon, Terra’s founder and former CEO, in 2022 after the blockchain ecosystem collapsed.

The two were arrested in the capital Podgorica in March 2023. Both South Korea and the US have requested Kwon’s extradition from local authorities.

Meanwhile, Korean authorities also arrested executives at Haru Invest this week as part of an investigation into the theft of $828 million worth of cryptocurrency from 16,000 investors.

The firm, which offered high yields to investors, paused withdrawals last June due to supposed problems with service partners, and fired about 100 employees.

On July 19, South Korean lawmakers plan to implement new laws that prohibit market manipulation, insider trading, and illegal transactions.

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JPEX named top Hong Kong consumer news story of the year

The JPEX scandal has been dubbed the top consumer news story for 2023, the Year of the Rabbit, in Hong Kong, according to a poll conducted by the Consumer Council in the city.

With over $200m in assets involved and the arrest of 69 people — though no charges have been filed yet — the JPEX story beat out the lifting of the mask mandate, deep fake scams, and Japanese nuclear waste water.

“The results showed that consumers are not only concerned about the security and reliability of virtual asset trading platforms, but also anticipate the authorities to take action against suspicious platforms to safeguard the interests of investors,” said the Consumer Council in a statement.

Singapore police warn against wallet drainers as Asian officials pump out funny awareness campaigns

Cybercriminals are increasingly using “crypto drainers” to empty wallets as a rising market attracts more users, Singaporean police warned last week.

It said cybercriminals are selling “commercial” crypto draining kits online to those with limited technical expertise for a cut of the money stolen.

A crypto drainer is a type of malware that attacks wallets, often through phishing attacks.

Scary stuff, though the police admit no such cases have been observed in Singapore.

Perhaps the Singaporean police should take inspiration from some of the more creative approaches to scam prevention we’ve been seeing in Asia of late.

Singapore’s Maybank released a series of skits about a scammer call centre to educate people about scamming tactics.

In Hong Kong, where a deep fake video recently lost a finance company $25 million, the deputy chief executive of the Hong Kong Monetary Authority recorded a song with Cantopop singer Wan Kwong about not clicking on random links.

And in Malaysia, the Royal Malaysia Police Force signed on as producers for a feature film, Oppa, about a primary school teacher who becomes the victim of an online romance scam. Set to be released later this year, it featured fifty actual police officers.

In an interview with local outlet The Star, Bukit Aman Commercial Crime Investigation Department assistant director (intelligence), Mohd Faizal Zainal said the police were always looking for different ways to prevent crime.

Though he stressed casting wasn’t easy: it was difficult to find an actor who looked “good like a South Korean man” to play the villain.

Asia News Roundup

  • Bitcoin will benefit from the stock market “bloodbath” in China as investors seek alternative places to park their cash, according to Noelle Acheson.
  • Get a licence or get out, Hong Kong’s Securities and Futures Commission told crypto exchanges as the deadline for applying for a licence approaches. It also warned investors to take their money out of platforms not on the application list.
  • Chinese authorities are set to add revisions to anti-money laundering regulations covering virtual assets. It comes as academics and officials in an executive meeting of the State Council acknowledged crypto had gone “mainstream.”
  • Binance co-founder Yi He has warned against insider trading at the company after Ronin’s native token value plummeted following its listing on the site.

Callan Quinn is DL News’ Hong Kong correspondent. Have a tip? Contact the author at