Rising popularity of XRP and DOGE

XRP and DOGE have seen a resurgence in popularity, fuelled by a combination of market dynamics and external influences. For XRP, the easing of regulatory pressure in the U.S. has provided a much-needed boost, as Ripple Labs, its parent company, continues to navigate legal challenges. On the other hand, DOGE’s growth has been tied to high-profile endorsements, particularly from Elon Musk, whose renewed interest in the token has rekindled investor enthusiasm.

Bitcoin, the perennial leader in trading volume, has taken a backseat as XRP and DOGE captured the spotlight. While BTC remains a staple in global portfolios, its trading volume on South Korean exchanges has been eclipsed by the excitement surrounding these altcoins.

Insights from South Korean exchanges

Reports reveal that XRP and DOGE accounted for 30 percent of trading volumes on Upbit and nearly 20 percent on Bithumb over the past 24 hours. Upbit alone reported the highest XRP volumes globally, even surpassing trading activity on international platforms like Binance and Coinbase.

This spike in activity could partially be attributed to speculative trading, with South Korean traders historically known for driving euphoric market rallies. Additionally, concerns about wash trading, where automated programs artificially inflate volumes, have been raised, suggesting that some of the reported activity may not reflect genuine market demand.

XRP is currently trading above $1, marking its strongest rally in three years. Analysts note that momentum indicators suggest a bullish trend, with key support levels at $0.96 and $0.65, and resistance levels at $1.26 and $1.40. Currently trading at just under $0.40, DOGE has more than doubled in value over the past two weeks. Its futures products have also hit yearly highs, signalling strong interest from both retail and institutional investors.

South Korea has long been a hotspot for crypto speculation, with past instances of the Kimchi premium highlighting the region’s influence on global prices. This localised surge in XRP and DOGE trading volumes mirrors these historical trends.

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Details of fraud

A staggering 64 percent of fraud cases reported to Nepalese authorities until May 2024 were cyber-enabled, with cryptocurrencies playing a significant role. As a subsidiary of the central bank, the FIU collaborates with various agencies, ensuring that financial institutions comply with anti-fraud and anti-money laundering regulations.

Fraudsters leverage crypto’s global accessibility, transferring illicit funds to offshore accounts to obscure their trail. Criminals convert stolen or illegal funds into cryptocurrencies, exploiting the lack of regulation and transparency. Scammers lure victims with promises of high returns, often targeting individuals through flashy advertisements or testimonials. Platforms like Facebook and Instagram are rife with fraudulent accounts promoting fake crypto opportunities.

Nepal’s ban on cryptocurrency trading inadvertently hinders the reporting of fraud cases, as victims fear legal repercussions. Victims often hesitate to report incidents, fearing ridicule or backlash. Nepal’s limited resources make it difficult to monitor and trace sophisticated crypto transactions effectively.

The FIU advocates for advanced monitoring tools to track suspicious transactions in real-time. Institutions must be equipped to recognize unusual patterns or large transactions involving crypto. Timely reporting can prevent further damage and help authorities act swiftly. Empowering citizens with knowledge about crypto risks can significantly reduce susceptibility to scams. Encouraging open communication between victims and law enforcement is vital for improving fraud detection.

South Korea’s reporting mandates

South Korea’s policy of pre-registering businesses handling cross-border crypto transactions offers a valuable model for Nepal. Global cooperation is essential to address the borderless nature of cryptocurrency fraud. South Korea’s Finance Minister, Choi Sang-Mok, said the country would introduce reporting mandates on cross-border crypto transactions at a recent G20 meeting in the United States.

Nepal must update its policies to tackle the complexities of crypto-related fraud effectively. Enhanced collaboration between financial institutions, law enforcement, and international bodies is crucial for success.

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Thailand is among the top 20 markets that Binance operates in out of the more than 100. Conlan said, “Thailand, as a country, has taken a pioneering approach to crypto and is trying to introduce regulations and a framework in the right way. I think that is what ultimately is going to help this industry thrive and drive forward.”

Latest data finds that Thailand’s crypto penetration rate stands at 12 percent, with the global benchmark at 6 percent. Conlan praised Thailand for taking a “pioneering approach to crypto” and continuing to work to establish regulations and a framework “in the right way.”

Binance has grown exponentially in the past six months, gaining 60 million users worldwide. The crypto exchange, which has over 240 million users globally, attributes this growth to the increased institutional adoption and positive developments like ETF approvals.

Thailand’s supportive crypto approach

This comes as the country itself seems to be betting on crypto. Siam Commercial Bank recently launched Thailand’s first stablecoin-powered cross-border payment system. The bank has partnered with SCB 10X and Lightnet to use stablecoins to facilitate faster, more efficient international transactions.

Stablecoins are cryptocurrencies whose value is pegged to another asset, such as a fiat currency or gold, to maintain a stable price. Designed to track the value of currencies or assets like the dollar, they are primarily used as bridge currencies in and out of the crypto economy.

In August, Thailand’s financial regulators launched a Digital Asset Regulatory Sandbox to promote broader crypto adoption in the country. The initiative was backed by a public hearing in May, it will help develop Thailand’s digital asset market by allowing participants to test crypto services under flexible regulations.

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Overview of new legislation

The new law is part of Russia’s ongoing efforts to regulate digital currencies, increase oversight, and potentially leverage cryptocurrencies to mitigate the effects of international sanctions. By expanding the scope of oversight, Russia aims to reduce reliance on foreign currencies like the US dollar and ensure the security and transparency of digital transactions.

One of the most prominent aspects of this law is the government’s ability to impose restrictions on cryptocurrency mining activities based on regional requirements. The legislation allows the government to define specific circumstances under which mining operations can be prohibited. This gives the authorities greater flexibility in responding to local issues, such as energy shortages, environmental concerns, or even economic challenges.

In addition to targeting mining operations directly, the law also grants the Russian government the authority to regulate the infrastructure providers that support mining. This includes controlling companies that provide hardware, software, or energy to miners, thereby tightening the entire ecosystem of cryptocurrency production.

Impact on digital currency mining pools

The new law also addresses mining pools groups of miners who combine resources to increase efficiency. The legislation grants the government power to stop these mining pools from operating in specific regions. This control could help authorities manage and monitor mining activities more effectively, curbing illegal operations and ensuring compliance with national laws.

Under this legislation, multiple federal agencies, beyond Rosfinmonitoring (Federal Financial Monitoring Service), will gain access to digital currency identifiers. These identifiers are used to track digital transactions, which could be linked to illegal activities like money laundering or financing terrorism. This expansion will enhance Russia’s capacity to monitor and regulate crypto transactions comprehensively.

The responsibility for maintaining the national mining register has been shifted from the Ministry of Digital Development to the Federal Tax Service. This change signifies a more centralized and stringent approach to monitoring mining activities.

While individual miners can avoid registration if their electricity consumption remains within a defined limit, companies and individual entrepreneurs are now required to comply with new registration guidelines.

The gradual development of crypto regulations in Russia shows a dual approach: tightening control over mining and crypto infrastructure while simultaneously enabling the use of digital currencies to circumvent sanctions. This duality suggests a pragmatic strategy aimed at leveraging crypto’s potential while safeguarding national interests.

As Russia advances its crypto regulations, its stance may influence global cryptocurrency trends, especially in countries exploring the use of state-backed digital currencies.

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VASP licence update

The BSP has been proactively regulating digital currencies and related service providers through VASP licensing. These Virtual Asset Service Providers offer various crypto-related services, from digital wallets to exchange platforms.

The recent update added a new digital bank, GoTyme, to the VASP licence list. However, it also removed four entities, including Appsolutely Inc., the Philippine-based company linked with the now-defunct cryptocurrency LoyalCoin. The addition of GoTyme has brought the number of licensed VASPs to 14, although the majority remain tagged as inactive or non-operational. With tightening regulations and periodic updates, the BSP is keen on curating a list of active and compliant firms in the crypto space.

GoTyme has officially joined the VASP community and has been experimenting with innovative features, such as the recently introduced U.S. dollar buying and time deposit feature. Customers can invest in U.S. dollars and earn up to 5% annual interest, a unique offering within the local banking sector. It remains to be seen how the bank plans to expand into the digital asset space.

In 2020, Appsolutely Inc. was given approval by the BSP to operate as a Remittance and Transfer Company (RTC) with a Virtual Currency Exchange (VCE) Service. However, despite multiple partnerships with firms like Cebu Pacific, Lazada, and even 7-Eleven, the project slowly faded away. By 2023, Appsolutely Inc. was tagged as an inactive and non-operational VASP by the BSP.

Atomtrans Tech, another company that lost its VASP licence, partnered with Coinfirm, a London-based blockchain technology firm, in 2021. The collaboration aimed to bolster security and transparency in Atomtrans’ VASP operations. However, due to operational and financial difficulties, the company ceased its services in January 2022.

I-Remit has been serving Overseas Filipino Workers (OFWs) with its remittance services since 2001. It obtained its Electronic Money Issuer (EMI) licence in 2019 and a VCE licence in 2020. Despite its expansion to 23 countries, I-Remit was eventually classified as an inactive VASP by 2023.

Philbit aimed to offer a mobile application supporting 850 digital currencies, focusing on money-changing and remittance services. Similar to other firms, Philbit was tagged as inactive and non-operational in the BSP’s 2023 update. While the BSP currently lists 14 licensed VASPs, many are inactive or not yet operational. The central bank’s regulatory vigilance is evident as it periodically reviews these firms to ensure compliance and transparency in their activities.

Impact on crypto landscape in Philippines

The removal of these entities could indicate a stricter stance from the BSP, signalling to other VASPs that failure to comply with regulations could result in licence revocation. This move may also help rebuild trust in the Philippine crypto market by filtering out inactive or questionable players.

The BSP’s continuous updating of the VASP list strengthens the credibility of the virtual asset services market. By ensuring that only compliant and active firms hold licences, the BSP aims to foster a more secure and transparent environment for crypto transactions.

With the BSP maintaining a close watch on VASPs, the crypto industry in the Philippines is likely to see more developments, including possible new regulations or the entry of new players like GoTyme. Digital banks and crypto firms will need to adapt to remain compliant while still offering innovative services to their users.

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Reportedly, the centre had to prioritise other matters as the nation is brimming with events like election and announcement of budget, meetings with other nations and the impending World Bank annual meetings.

This comes after the nation was initially expected to publish its policy stance on cryptocurrencies by September following consultations with stakeholders including the central bank and the markets regulators. According to reports, the discussion paper will be published but the timeline is not decided.

The discussion paper would have been a step towards bringing comprehensive crypto legislations that the country currently does not have in place.

India’s crypto regulation

India does not have any specific legislation or regulatory framework in place to govern crypto transactions. This legal vacuum creates ambiguity and challenges that shroud the crypto market.

While the nation lacks a uniform law for regulating the industry, India was recently at the Financial Action Task Force (FATF) pushing for online gaming companies to be included under the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) framework. The centre will be bringing up the issue for discussion by illustrating cases that highlight the misuse of online gaming platforms wherein they have been used for illegal activities like money laundering.

The government had also initiated internal discussions to actively explore the means to enforce stringent Know Your Customer (KYC) protocols and the mandatory reporting of suspicious activities by online gaming companies.

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Incident overview

WazirX is one of India’s leading cryptocurrency exchanges, offering users a platform to buy, sell, and trade digital currencies such as Bitcoin, Ethereum, and more. On 18th July 2023, WazirX suffered a major breach in its wallet infrastructure, resulting in the theft of approximately $235 million worth of cryptocurrency. The hack has since led to a significant drop in market confidence and stirred up conversations around the security vulnerabilities in crypto exchanges.

The attack occurred over a brief but intense period where hackers exploited vulnerabilities within WazirX’s wallet infrastructure. According to reports, the exchange immediately began investigating the breach, but by the time action was taken, the attackers had already siphoned off millions in digital assets.

Following the hack, India’s Financial Intelligence Unit (FIU), alongside other regulatory bodies, launched a comprehensive investigation to uncover the details of the cyberattack. One of the key aspects of the ongoing investigation is the suspicion of insider involvement. While WazirX has not publicly confirmed this, authorities are exploring the possibility that someone with inside knowledge of the exchange’s systems may have facilitated the hack. If proven, this could dramatically change how cryptocurrency exchanges manage internal security.

Impact and response

The ripple effects of this breach extend beyond WazirX, as it has spurred a larger conversation about the safety of cryptocurrency exchanges and digital wallets. The WazirX hack has brought attention to the unregulated nature of the cryptocurrency market in India, adding urgency to ongoing discussions around how the government should regulate crypto exchanges and digital assets.

In response to the breach, the FIU has also been reaching out to other cryptocurrency exchanges and industry stakeholders. The goal is to assess the broader implications of the WazirX hack and to prevent similar incidents from occurring in the future.

To navigate the aftermath of the hack, WazirX is taking steps to restructure its business. The exchange aims to form a 10-member committee of creditors by 9th October 2024. The committee will guide the restructuring process. WazirX hopes to return approximately 52-55 percent of remaining crypto assets to the affected users within six months.

WazirX’s parent company, Zettai, has also been proactive in addressing the crisis. The company has reportedly engaged with 11 potential partners, exploring capital injections and profit-sharing strategies to improve user recovery efforts.

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The Federal Tax Authority (FTA) published amendments to the country’s value-added tax rules on 2 October. The new policy, which takes effect from 15 November, applies retrospectively to transactions dating as far back as 1 January 2018.

All crypto transfers and conversions from now as well as the past till 2018, made by both individuals or businesses, will be exempt from the previously imposed 5 percent VAT. This means that those who have previously paid VAT on crypto transactions could be eligible for refunds from the UAE government.

A notable move that showcases the UAE as a crypto-friendly nation, the policy establishes for the first time that VAT does not apply to digital assets.

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Fabian Bodensteiner, managing director of the project’s Europe subsidiary and a founding team member, said at a recent summit that the company is now focusing on markets where local companies and governments were receptive to embrace new technologies.

He said the company sees a “larger dynamic” in other regions and that Europe is not a major focus.?“We just see a larger dynamic in other regions of the world, and because we’re not 1000 employees, we need to prioritize where we see the biggest business opportunities.”

Bodensteiner said there are more substantial business prospects in other regions despite most of its products being built in Europe. He continued that the countries in the Asia-Pacific (APAC) region, such as Japan and Malaysia, and Latin American jurisdictions like Argentina, look more promising in terms of technology adoption. He noted that the company is working with several prominent game publishers in the APAC region to integrate Worldcoin’s technology into their platforms.

Worldcoin’s history and critics

Sam Altman co-founded Worldcoin in 2023. The company runs on the idea to use biometric data from eye scans to provide a ‘World ID’ to every person on the planet. It is an online verification concept that proves they are human beings through a ‘proof of personhood’ concept, verifying an individual as a unique human being.

The unique ID will be given via chrome sphere devices known as ‘Orbs.’ Participants can claim the project’s cryptocurrency, WLD, for taking part in the project.

Critics have argued against Worldcoin’s iris scanning practice, raising serious privacy concerns regarding the same. They believe that collecting biometric data on such a large scale could potentially lead to surveillance or data being sold to third parties. The concern remains despite Worldcoin’s constant assurances about data security and protection.

Several European countries, including Spain, France, Germany, and Portugal, have launched investigations into the company. The probes focus on whether Worldcoin complies with the strict General Data Protection Regulation (GDPR) regulations governing data protection in the European Union.

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Bhutan currently holds 13.047k BTC worth $782.10 million at the time of writing. The country holds more than double the crypto that El Salvador, a pro-Bitcoin nation. El Salvador commands about $350 million in the leading digital cryptocurrency.

Bhutan has an estimated gross domestic product (GDP) of $3.11 billion, according to data from the International Monetary Fund (IMF). This implies about under a third of Bhutan’s GDP in Bitcoin.
In addition, the Himalayan kingdom of Bhutan holds about 656.013 in Ethereum (ETH) worth $1.52 million.

Bhutan’s 2023 wave of bitcoin mining

Bhutan has not derived its Bitcoin from law enforcement asset seizures, which is commonly undertaken by most governments. The country has substantially ramped up its crypto mining operations for Bitcoin since 2023. These mining operations are overseen by the country’s investment arm Druk Holdings.

The Himalayan kingdom has constructed Bitcoin mining facilities in various locations across the country. Its largest facility is on the site of now-disused Education City Project. While the country has substantially increased its mining efforts in 2023, the ventures date back to 2019 when Bitcoin was less than $10,000.

Last year, Bhutan had teamed up with Singapore-based mining firm Bitdeer Technologies Group to develop a 600-megawatt mining farm for Bitcoin by 2025. The move into crypto mining, comes as the kingdom works to recover from the COVID-19 pandemic. Bhutan’s economy contracted by 10 percent in 2020.

In May of last year, Bitdeer had also partnered with Druk Holding & Investments to develop a 100% carbon-free digital asset mining operation in Bhutan.

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