In the ever-evolving world of cryptocurrency, Asia remains a hotbed of activity and intrigue. This week, Singapore’s stance on Bitcoin ETFs, a high-profile crypto theft in the Philippines, and a cunning attempt to smuggle advanced mining rigs into South Korea have captured headlines. Singapore Exchange (SGX) CEO Loh Boon Chye recently declared that the city-state is not yet prepared to list cryptocurrency-based exchange-traded funds, citing an immature ecosystem. Meanwhile, the Philippines has charged two former consultants with a $6 million XRP theft, and South Korean customs officials have uncovered a scheme to evade taxes on high-end crypto mining equipment. Dive into these stories and more in our latest roundup from East Asia.

Singapore’s Hesitation on Bitcoin ETFs

SGX CEO Declares Singapore Not Ready

While several nations have approved the listing of cryptocurrency-based exchange-traded funds (ETFs), Singapore, a key financial hub in Asia, is apparently not ready. SGX CEO Loh Boon Chye stated at a Reuters NEXT conference on July 9 that SGX is currently not open to crypto listings. “The ecosystem, I feel, at this point in time, is not ready for such products in Singapore,” said Loh.

Singapore vs. Hong Kong: A Financial Rivalry

Singapore is often considered a rival to Hong Kong as both cities are global financial centers that strive to offer the most favorable business environment through regulation and tax incentives. Hong Kong has already launched Asia’s first spot Bitcoin and Ether ETFs, a few months after the spot Bitcoin ETFs made their debut in the United States, the world’s largest economy. Like Hong Kong, Singapore has expressed ambitions to become a hub for crypto businesses and has handed out more permits than its rival. As of today, Singapore has green-lighted 24 digital payment token licenses, a permit that allows businesses to provide crypto services, including trading and custody.

Philippines Charges Two in $6 Million Crypto Exchange XRP Theft

The High-Profile Theft

The Philippines Department of Justice has filed criminal charges against two former consultants of Coins.ph, who allegedly hacked the crypto exchange in October last year, allowing them to steal $6 million in XRP from a hot wallet. The pair, identified as Vladimir Evgenevich Avdeev and Sergey Yaschuck, worked as consultants for Coins.ph. The exchange is licensed by the Philippines central bank to provide crypto trading and custody services to 16 million users.

The Hack and Its Aftermath

Their tenure allowed them access to Coins.ph’s network infrastructure, including secure access key protocols and server systems, according to the DOJ. When their tenure ended, they managed to retain access and used them without right, the prosecutors explained. The alleged hack was discovered when Coins.ph found a 12.2 million XRP hole in one of its hot wallets. The stolen assets were subsequently traced to a separate external wallet which was eventually linked to Yaschuck’s account.

Legal Proceedings

The two former consultants face charges for violating the nation’s Cybercrime Prevention Act. Avdeev is facing 23 counts, and Yaschuck is charged with three. Vladimir Evgenevich Avdeev and Sergey Yaschuck reportedly departed from the country before they were indicted.

Importer Caught Trying to Sneak Expensive Rigs Through Korean Customs

The Tax Evasion Scheme

South Korea’s airport customs has reportedly busted an importer for tax evasion after trying to bring cutting-edge cryptocurrency mining equipment disguised as obsolete and second-hand models. The importer allegedly reported the products as outdated models worth $290 (400,000 Korean won) per unit. They were, in fact, one of the latest mining rigs available in the market worth a blistering $14,000 each.

Customs Discovery

Incheon Airport Customs said that the unnamed 44-year-old importer has been referred to prosecution on charges of violating the Customs Act by importing almost 700 units of high-end crypto mining rigs across 45 instances from November 2022. They alleged the importer evaded around $144,000 worth of customs duties. During customs clearance inspection, customs officials discovered discrepancies between the declared and actual models. Upon disassembling the mining machines, they confirmed that high-performance components such as GPUs (graphics processing units) were installed.

Legal Actions

The accused has been referred to prosecutors for further legal proceedings but has not been detained or held in custody. A customs official cited by local media said that the country expects an uptick in low-cost declaration cases due to the increasing domestic demand for cryptocurrency mining rigs.

Suspicious Seven: Hong Kong’s Securities Watchdog Issues Warning

The Fraudulent Platforms

The Hong Kong Securities and Futures Commission (SFC) listed seven businesses suspected of engaging in crypto fraud in a statement last week, naming XTCQT, CEG, BTEPRO, Bitones.org, Yomaex, Bstor, and Taurusemex. The SFC said that clients of the trading platforms have reported encountering withdrawal issues. In several instances, the platforms claimed the accounts were linked to money laundering activities, which was the reason for suspension.

Law Enforcement Response

This led to some paying exorbitant fees to unfreeze their accounts. In response to these allegations, local law enforcement has started blocking access to the websites associated with the named businesses, as requested by the city’s financial watchdog. However, many of these sites were already offline by the time action was taken. Taurusemex stands accused of falsely advertising that its investors’ accounts were regulated by the city’s financial authority, a claim the SFC has denounced as untrue.

Hong Kong’s Crypto Ambitions

It comes as Hong Kong has expressed its ambitions to establish itself as a hub for cryptocurrency, unveiling a licensing scheme aimed at providing regulated crypto trading access to both retail and institutional investors. Local businesses were mandated to obtain a license or at least be deemed-to-be-licensed by the deadline of June 1, 2024. As of July 10, 2024, only two entities, HashKey and OSL, are on the SFC’s roster of licensed trading platforms. Meanwhile, twelve applications have been withdrawn or rejected.

Bitget Expects Japanese Crypto Users to Continue Growing

Japan’s Crypto Adoption

Japan had the sixth-highest number of visitors to centralized exchanges in the world from November 2023 to April 2024, according to a new report released by Bitget Research. The research arm expects Japan’s crypto adoption to continue heating up.

Trends Among Japanese Users

Bitget’s study found a distinctive trend among Japanese users. There’s been a preference for older dog-themed memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB). In contrast, newer memecoins like Book of Meme (BOME) and Slerfsol (SLERF) did not appear in the trending searches of Japanese internet users. The country’s investors have also maintained strong interest in early blue-chip tokens like XRP and Cardano’s ADA. These two currencies were not found in the trending search list of most other countries, according to Bitget.

Government Initiatives

In 2022, Prime Minister Fumio Kishida’s administration drew up its own Web3 project team to highlight blockchain technology as a key element in achieving its vision for a sustainable and technologically advanced society. Bitget expects Japan’s daily active cryptocurrency traders to increase from 350,000 in 2024 to approximately 500,000 by the end of the year.

Summary

The cryptocurrency landscape in East Asia is dynamic and rapidly evolving. From regulatory hesitations in Singapore to high-profile thefts in the Philippines and innovative smuggling schemes in South Korea, the region remains a focal point for both opportunities and challenges in the crypto world. As Japan continues to see growing interest in cryptocurrencies, the broader Asian market is poised for significant developments in the coming months. Stay tuned for more updates and insights into the ever-changing world of cryptocurrency in East Asia.

The author does not own or have any interest in the securities discussed in the article.