Japanese police have arrested two suspects, both in their 30s, in connection with the theft of nearly $530 million in NEM currency following the Coincheck cryptocurrency heist in January 2018. The two suspects were arrested for possessing proceeds from the crime. Bitcoin has dropped to its lowest value last seen in 2019. Does this mean that the original cryptocurrency is not a safe-haven asset yet as it takes a beating alongside the rest of the traditional markets? Read this and more in the weekly round-up of the top stories in Asia’s crypto scene.
Japanese police nab two suspects for possession of stolen NEM cryptocurrency
Tokyo police arrested two men on March 12 for knowingly receiving and possessing NEM cryptocurrency stolen in the 2018 Coincheck hack. The Japanese exchange lost $530 million in NEM currency during the cyberattack, which led to Coincheck being sold to Monex Group.
According to The Japan Times, a doctor and a company executive, both in their 30s, were arrested on charges of possession of proceeds of crime. This violates a law intended to curb organized crime.
The Metropolitan Police Department (MPD) believes that the two suspects previously traded the stolen NEM currency for other digital currencies such as bitcoin between February and March back in 2018. These are the first arrests made since Coincheck suffered the hack more than two years ago.
According to reports, the two individuals have a stash of 24 million NEM tokens, accounting for around 5 percent of the stolen cryptocurrency. The suspects are also believed to have converted some of the digital currency to fiat using exchanges.
Following the incident, the MPD set up a dedicated task force made up of 100 investigators to get to the bottom of the hack.
The Tokyo Police cybercrime unit claim that the suspects purchased the NEM currency at a preferential rate on the dark web. The police are still probing the matter to identify more people linked to the matter.
Japan’s financial regulator launches blockchain governance initiative
Japan’s financial and securities regulator, the Financial Services Agency (FSA), together with Nikkei Inc. held a special online panel discussion that gave birth to a blockchain council. The FSA announced on its website that Georgetown University Research Professor Dr. Shin’ichiro Matsuo publicized the launch of a global network called Blockchain Initiative Governance Network (BIGN).
The new blockchain council aims to give a neutral platform for all blockchain stakeholders to share insights and address issues faced by the industry in an effort to foster growth within the blockchain community.
The global blockchain network aims to:
- Creating an open, global and neutral platform for multi-stakeholder dialogue
- Developing a common language and understandings among stakeholders with diverse perspectives
- Building academic anchors through continuous provision of trustable documents and codes based on an open source-style approach
Major corporations are reluctant to join the blockchain and cryptocurrency bandwagon due to a lack of regulatory clarity. However, as the FSA takes a giant step towards understanding the crypto sector, a number of big companies are expected to feel comfortable with the emerging technologies and start experimenting with them.
South Korea’s new cryptocurrency laws – Legal clarity vs heavy rules
South Korea recently announced new cryptocurrency laws in line with the Financial Action Task Force (FATF) Anti-Money Laundering (AML ) standards. The new laws represent legal clarity in areas where the crypto industry operated in grey areas and on the downside, impose heavy requirements for businesses in South Korea’s cryptocurrency scene.
According to the new strict law, virtual asset service providers (VASPs) are mandated to be registered with regulators and have a partnership with a single bank which they will use for both deposits and withdrawals.
Linking the digital wallets with traditional bank accounts will make it easy for regulators to pick up and track illicit financial activities.
The new law has left the crypto community with mixed feelings especially regarding the future survival of cryptocurrency exchanges. There are claims that once the new rules come into effect, about 190 cryptocurrency exchanges will likely go under.
There are nearly 200 crypto exchanges in South Korea but only the big four (Bithumb, Coinone, Korbit, and Upbit) are the only exchanges currently adhering to the new requirements.
Indonesia’s commodity regulator greenlights new crypto exchange
Indonesia’s Commodity Futures Trading Regulatory Agency, commonly known as Bappebti, has given regulatory approval to digital currency exchange service provider Zipmex.
The latest approval comes at a time when the crypto exchange has lodged a series of applications with regulators in the Asia-Pacific region and has already secured approval from Thai and Australian regulators.
Zipmex Chief Legal Officer Bank Yamwila spoke to Cointelegraph and said,
“Even though each jurisdiction has its own sets of rules and regulations, they are rooted in core principles of good corporate governance, strong custody solutions and comprehensive KYC/AML [Know Your Customer and Anti-Money Laundering] policies.”
Starting in February this year, all crypto exchanges offering their services in Indonesia are required to register with the commodities regulator.
Is Bitcoin failing the test as a safe-haven asset?
There is no better opportunity for bitcoin to prove that it is a safe-haven asset in times of global instability. But the leading digital currency has failed to convince its critics after plummeting in recent weeks amid the volatility in global markets due to coronavirus and other factors.
On March 12, bitcoin lost 20 percent of its value in an hour. The price crashed below $6,000 – a value last reached in 2019.
A number of crypto analysts have put the blame squarely on the novel coronavirus, which has now been officially been declared a global pandemic by the World Health Organization (WHO).
e-Toro Market Analyst Simon Peters told the Independent that the crypto industry has not been insulated from the factors causing mayhem in global markets.
“Bitcoin has fallen as cryptocurrencies become caught up in the turmoil we’re seeing in traditional markets,” said Peters.
The latest drop sees bitcoin lose around $50 billion of its value since the beginning of the month.