Binance under fire; Internet giant Naver takes on South Korea’s CBDC

The Asian crypto industry reacts to the US Department of Justice and Internal Revenue Service money laundering probe into Binance. In South Korea, the nation’s largest internet company plans to join Bank of Korea’s CBDC ventures. Over in Singapore, Southeast Asia’s largest lender DBS Bank expands its crypto services for its private bank clients by launching a crypto trust solution.

May 14, 2021
min read


Welcome to the Daily Forkast, May 14th, 2021. I'm Angie Lau. Let's get you up to speed from Asia to the world.

Binance, the world's largest crypto exchange under fire. According to new reports, the US Department of Justice and Internal Revenue Service, the IRS, have opened a money-laundering investigation into Binance.

Now, in a statement on Twitter, Binance says, "We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion.

The company's CEO, Changpeng Zhao — or CZ — also chimed in saying, "The news title is bad. The article itself isn't so bad, actually (but who reads). It describes how Binance collaborated with law enforcement agencies to fight bad players, but somehow made it look like a bad thing." He adds. "Anyways, back to work."

"I think a lot of us got into this industry because we actually think we can use blockchain-based assets to revolutionize the way finance is done. If that's really what we are claiming, we need to start thinking about investors first. Not necessarily our pockets," [said Fusang CEO Henry Chong].

But does this fuel public perception against the industry? I sat down with ex-CFTC head Chris Giancarlo today for an upcoming Word on the Block episode, discussing the Digital Dollar Project, which he leads. I asked him how the Justice Department and IRS investigation into anti-money laundering issues at Binance impacts the bigger picture of crypto adoption.

"The future of money in my view, is very much digital and networked. So I don't think one headline should distract us from the overall goal of modernizing money, whether that be non-sovereign or sovereign."

Meanwhile, here in Asia, new developments in the CBDC space. Naver, Korea's leading Internet company, plans to join Bank of Korea's CBDC simulation. Naver will enter the project with its instant messaging and lifestyle app Line Plus and Naver Financial, which owns Naver Pay, the dominant player in the local smart payment market. Approximately 40.3% of smart payment users in Korea are using Naver Pay.

Will we see a digital won in the near future? Well, the Bank of Korea has stated there are no plans, but the industry remains hopeful as the central bank is open to discussions.

Bitcoin continuing to tumble today, down 1.8%. And in the top 10 for cryptocurrency, some coins have started to recover from yesterday's bloodbath. Dogecoin up 25% after another shout-out from Elon Musk.

And finally, this — Singapore-based DBS Bank, Southeast Asia's largest lender, is launching a crypto trust solution for its private bank clients. Now, this builds on the DBS Digital Exchange launched last December that allows the bank's institutional and accredited investors to invest in Bitcoin, Ether, Bitcoin Cash and XRP.

"More and more clients are saying that we do intend to increase our share of our assets in cryptocurrencies and we see it increasing over time"

Now it's one of the first traditional bank-backed crypto products we're seeing here in Asia. And others in the industry say it's another big step towards crypto greater adoption

"For the overall credibility of the space is a very good piece of news, and it's very important that such a reputable and large institution, one of the most advanced and reputable jurisdictions globally, is actually entering the market with a clear stance that 'we are offering.'"

There's no doubt Asia is in play. High net worth investors in Asia are already looking at succession planning of their digital assets. Onboarding with traditional banks like DBS makes crypto adoption that much easier.

And that's The Daily Forkast. I'm Angie Lau. until next time.

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