Tag: Asia Pacific

1
An old-fashioned bank heist – in cyberspace
2
Hacking of digital currency exchange leaves Japanese company footing the bill
3
Asia-Pacific regulatory trends
4
ASIC signs fintech Cooperation Agreement with Indonesia
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Will there be an Asia Pacific ‘FinTech Passport’ in the future?
6
Asia Region Funds Passport memorandum signed
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Japan Aims to Facilitate Banking Institutions to Invest in Bank-Related FinTech Companies
8
Japan Introduces Regulation on Bitcoin Exchanges

An old-fashioned bank heist – in cyberspace

By Cameron Abbott and Sarah Goegan

In the old days the bank robbers would rob the local town and ride off into the sunset. The new version is a little less easy to see. Coinrail, a South Korean cryptocurrency exchange, has announced that it was hacked on 10 June.  That’s a polite phrase for “our customers lost a lot of coins”.

The cyberattack resulted in more than $40 million USD worth of altcoins (coins that aren’t bitcoin or Ethereum) being stolen. This represented around 30% of coins traded on the exchange. Quite a substantial amount, considering Coinrail is a smaller cryptocurrency exchange!

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Hacking of digital currency exchange leaves Japanese company footing the bill

By Cameron Abbott and Allison Wallace

Coincheck – one of Japan’s largest digital currency exchanges – says it will repay hundreds of millions of dollars’ worth of virtual money, after hackers broke into its network, stealing a reporting 58 billion yen (AUD660 million) worth of NEM (a cryptocurrency like Bitcoin).

Hackers broke into the Coincheck network early Friday morning, but it wasn’t discovered until nearly eight and a half hours later. Read More

Asia-Pacific regulatory trends

By Jim Bulling

Jim Bulling contributed an article to American Lawyer on regulatory trends in the Asia-Pacific region. The article contains a high level review of some of the policies and regulatory settings that countries in the region have adopted in response to the development of the FinTech industry. In particular the article looks at some of the regulatory settings which Governments have put in place to encourage a local FinTech industry and to protect consumers and the local financial system.

To read the article, click here.

ASIC signs fintech Cooperation Agreement with Indonesia

By Claire de Koeyer and Jim Bulling

The Australian Securities Investment Commission (ASIC) has entered into a Cooperation Agreement (Agreement) with Indonesia’s financial services sector regulator Otoritas Jasa Keuangan (OJK) which focuses on promoting innovation in financial services in their respective markets.

The Agreement establishes a framework for cooperation between ASIC and OJK in the expanding space of financial services innovation, including an agreement to share information on emerging market trends and regulatory issues arising from the growth in innovation.

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Will there be an Asia Pacific ‘FinTech Passport’ in the future?

By Jim Bulling and Michelle Chasser

Australian Securities and Investments Commission (ASIC) Chairman, Greg Medcraft, has discussed cooperation between FinTech regulators at the recent International Institute of Finance Chief Risk Officer Forum in Singapore.

The Chairman noted “because the internet knows no boundaries” cooperation and collaboration between regulators is critical and developing responses to FinTech should not be done in isolation. The Chairman then highlighted the following steps required for cooperation.

1. Sharing information

Regulators in Australia, UK, Singapore, Canada, Kenya, South Korea, Switzerland and India have entered into various cooperation agreements with other regulators to share information about FinTech developments and emerging trends in their markets. Many of the cooperation agreements also allow FinTech businesses to access Innovation Hubs in other jurisdictions. The Chairman noted that ASIC was also informally in regular contact with regulators in the US and Europe.

2. Harmonisation

While ideally regulators would work towards harmonising their regulatory responses and approaches, it was acknowledged that this will be a challenge due to competition between countries to attract FinTech businesses. The Chairman raised the possibility of introducing a “fintech passport” which could ease entry into other jurisdictions for businesses. Another possible solution raised was to develop “equivalence processes” around regulation.

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Asia Region Funds Passport memorandum signed

By Jim Bulling and Michelle Chasser

After 6 years of international negotiation, Australia has signed the Asia Region Funds Passport’s Memorandum of Cooperation with Japan, South Korea and New Zealand. Other countries which have been involved in the negotiations but are yet to sign include Singapore, Thailand and the Philippines.

The Passport facilitates the cross border offering of eligible collective investment schemes in participating countries. Australian Minister for Small Business and Assistant Treasurer, Kelly O’Dwyer, said “The Passport will create a single market for managed funds encompassing economies across the region”.

FinTech businesses which utilise managed funds, such as marketplace lenders and some robo-advisers, and are regulated in a participating country may be able to use the Passport to offer managed funds in other participating countries without needing to go through local licensing and registration processes.

The Memorandum of Cooperation comes into effect on 30 June 2016 and can be found here.

Japan Aims to Facilitate Banking Institutions to Invest in Bank-Related FinTech Companies

By Yuki Sako

On March 4, 2016, the Cabinet of Japan approved and submitted to the Diet an amendment bill to the Banking Act of Japan that would enable banks and bank holding companies to acquire more than the permitted holding of nonbank interests (5% (banks) or 15% (bank holding companies)) of certain nonbank companies whose businesses involve innovative technologies that can be applied in banking business.  Under the amendment bill, banking institutions are, with approval of the Financial Services of Agency of Japan (FSA), permitted to acquire and hold a controlling interest in various FinTech companies that would provide innovative technologies to advance banks’ operations or benefit bank customers.  When proposing the amendment bill, the FSA explained that the amendment bill aims to facilitate banking institutions to invest in bank-related innovative technologies, IT technologies in particular.

The amendment bill is expected to pass the Diet during the current Diet session and to come into force within 1 year after the promulgation.

Text of the amendment bill can be found here (only in Japanese).

Japan Introduces Regulation on Bitcoin Exchanges

By Ayuko Nemoto and Yuki Sako

To date, virtual currencies and related service providers remain unregulated in Japan.  However, on March 4, 2016, the Cabinet of Japan approved an amendment bill to the Payment Services Act of Japan and submitted it to the Diet (“Amendment Bill”).

Most importantly, the Amendment Bill aims to bring the industry under the supervision of the Financial Services Agency of Japan (“FSA”) and introduce new registration requirements for virtual currencies exchanges, including those based outside of Japan that provide services to customers in Japan.  Exchanges based outside of Japan may be registered as a “Foreign Exchange” if they are registered or licensed in their home jurisdiction; however, they must have an office in Japan and designate a “representative of Japan,” the failure of which would result in disqualification.

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