Japan is positioning itself as a promising destination for American investment in emerging tech sectors, with Prime Minister Fumio Kishida directly appealing to US executives during a lunch event in Washington. Kishida emphasised Japan’s openness to collaboration in critical areas like AI, semiconductors, and clean energy, highlighting the mutual benefits such investments would bring. His visit preceded a summit with President Joe Biden, which was focused on enhancing defence and economic ties between the two nations.
Japanese foreign direct investment in the US has exceeded $750 billion, making Japan the largest foreign investor in America and contributing to creating over 1 million jobs. Microsoft recently announced a substantial $2.9 billion investment to bolster its cloud computing and AI infrastructure in Japan, marking its largest-ever investment in Asia’s second-largest economy. This move underscores the increasing business ties between the US and Japan, coinciding with efforts to modernise their political and military alliance.
As the global geopolitical landscape undergoes significant shifts, Japan and the US are intensifying collaboration, particularly in areas like semiconductor technology. Rapidus, a Tokyo-backed chipmaker, is partnering with IBM to advance chip technology in Japan, aiming to regain ground in an industry once dominated by Japan but now led by competitors like TSMC, Intel, and Samsung. Japan’s efforts to revitalise its semiconductor sector align with Washington’s tightening restrictions on chip sales to China, reflecting broader tech rivalry between the two economic giants.
Prime Minister Kishida also addressed concerns about Japan’s economy, expressing optimism for a resurgence after years of deflationary pressures. With recent moves like ending negative interest rates and initiating the first rate hike in 17 years, Japan aims to break free from deflationary sentiments and foster growth in the coming years. These economic reforms signal Japan’s determination to regain its economic strength and reaffirm its position as a key player in the global market.
The EU antitrust regulators are scrutinising a proposal by Apple to determine if it meets their directive allowing Spotify and other music streaming services to inform users of alternative payment methods outside of Apple’s App Store. This review follows the European Commission‘s recent order and hefty fine imposed on Apple for breaching competition rules. Under Apple’s proposal, services like Spotify can now include links on their apps directing users to their websites to purchase digital content or services, circumventing Apple’s payment system.
However, there’s a catch: any transactions resulting from these links will incur a 27% fee to Apple, including subsequent auto-renewing subscriptions. The European Commission is evaluating whether Apple’s proposal fully aligns with its decision. If there’s suspicion of non-compliance, the Commission may issue a Statement of Objections to address the concerns.
Apple insists that its plan adheres to the Commission’s decision, although Spotify has expressed frustration over Apple’s delay in complying with the EU order, which was issued five weeks ago. Meanwhile, the Commission is conducting a separate investigation into Apple’s App Store rules and its recent measures to comply with the Digital Markets Act (DMA) amid concerns that these could restrict developers from freely communicating and promoting their offerings.
Why does it matter?
The outcome of the EU’s assessment will determine whether Apple faces additional antitrust charges and penalties if its proposal is found to fall short of the Commission’s requirements. The ongoing dispute highlights the broader regulatory scrutiny facing tech giants like Apple over their market practices and dominance in the digital ecosystem, particularly concerning payment systems and app store policies.
Terraform Labs PTE Ltd. and its former CEO, Do Kwon, have been found liable for defrauding investors in crypto asset securities by a jury in the United States District Court for the Southern District of New York. This verdict follows the court’s previous determination that the defendants unlawfully offered and sold these securities in violation of the registration provisions of the US Securities Act.
According to Gurbir S. Grewal, the Director of the Division of Enforcement at the Securities and Exchange Commission (SEC), this decision marks a victory in combating crypto fraud. The defendants allegedly deceived investors by misrepresenting the stability of the crypto asset security known as Terra USD, as well as providing false information about a popular payment application supposedly utilizing Terraform’s blockchain. These deceptions resulted in devastating financial losses for investors and caused the market value of Terra USD to plummet by tens of billions overnight.
“For all of crypto’s promises, the lack of registration and compliance has very real consequences for real people.” Grewal expresses the SEC’s commitment to utilizing all available tools to protect investors, while also urging the crypto market to align itself with regulatory requirements.
The defendants allegedly engaged in fraudulent activities by providing misleading information about the stability of a crypto asset security and the application of their blockchain technology. As a result, investors suffered significant financial losses and the market value of Terra USD experienced a sharp decline.
Google has initiated legal action against two alleged crypto scammers for distributing fraudulent cryptocurrency trading apps through its Play Store, deceiving users and extracting money from them. Based in China and Hong Kong, the accused developers uploaded 87 deceptive apps that reportedly conned over 100,000 individuals. According to Google, users suffered losses ranging from $100 to tens of thousands per person due to these schemes, which have been operational since at least 2019.
The lawsuit marks Google’s proactive stance against such scams since Google swiftly removed the fraudulent apps from its Play Store. The company’s general counsel, Halimah DeLaine Prado, emphasised that holding these bad actors accountable is crucial to safeguarding users and maintaining the integrity of the app store. The company claims it incurred over $75,000 in economic damages while investigating this fraud.
The scam reportedly enticed users through romance messages and YouTube videos, urging them to download fake cryptocurrency apps. The scammers allegedly misled users into believing they could profit by becoming affiliates of the platforms. Once users invested money, the apps displayed false investment returns and balances, preventing users from withdrawing funds or imposing additional fees, ultimately leading to more financial losses.
Google’s legal action accuses the developers of violating its terms of service and the Racketeer Influenced and Corrupt Organizations Act. The company seeks to block further fraudulent activities by the defendants and aims to recover unspecified damages. The legal move represents Google’s commitment to combating app-based scams and protecting users from deceptive practices on its platform.
Project Agorá aims to investigate the integration of tokenised commercial bank deposits and tokenised wholesale central bank money using smart contracts and programmability. The goal is to enhance the functioning of the monetary system while maintaining its two-tier structure. By leveraging smart contracts, new settlement methods and types of transactions that are not currently practical or viable can be enabled.
This public-private partnership recognizes the challenges in cross-border payments, including varying legal, regulatory, and technical requirements, operating hours, and time zones. Project Agorá seeks to overcome these inefficiencies by streamlining processes and automating financial integrity controls, which are often duplicated for the same transaction depending on the number of intermediaries involved.
The BIS Innovation Hub will lead Project Agorá and work towards delivering public goods to the global central banking community. The BIS will issue a call for expressions of interest to private financial institutions, with the IIF acting as the intermediary. Their aim is to involve regulated financial institutions representing each of the seven currencies involved.
Argentina is implementing new rules for legitimate crypto exchange activities. These efforts started on March 14, 2024, when the Argentine Senate moved forward with legislation to curb money laundering and terrorism financing. It includes a mandate for for creating a registry of “virtual asset service providers”. Argentina’s National Securities Commission (CNV) proclaimed that providers that are not registered will not be allowed to operate.
On March 25, CNV announced that crypto service providers must adhere to Financial Action Task Force (FATF) guidelines. As part of Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT) law reforms, crypto businesses must now register with the Argentine government.
Upon Javier Milei’s ascension to power in Argentina in December 2023, expectations were high for potential benefits to Bitcoin and cryptocurrency adoption due to his economic plans and pro-crypto views. However, regulatory measures have increased under his administration raising concerns about the future of digital assets in the country.
China has approved increased operations of drones and other aerial vehicles, fueling excitement for the significant potential the technology holds in enhancing the country’s burgeoning “low-altitude economy.” “Low-altitude economy” is a key strategic sector listed by China, encompassing industries linked to manned and unmanned vehicles operating below 1,000 meters. The sector is valued at $70 billion in 2023, is projected to exceed $140 billion by 2026 in the country, as reported by Ministry of Industry and Information Technology (MIIT)-affiliated research institute.
Guidelines published by MIIT indicate Beijing’s ambition to invigorate the general aviation industry by 2027, emphasizing applications in urban air transport, logistics, and emergency rescue. By 2030, they aim to introduce a new, high-end, smart, and eco-friendly development model for general aviation, which is expected to significantly contribute to economic growth.
Civilian drones in China have already observed widespread adoption in various sectors including agriculture and aerial photography. Drone logistics services have now reached urban areas as well.
Sun Wensheng of China’s Civil Aviation Administration highlighted the ongoing enhancement of support services for low-altitude flights, including streamlined approval processes and air traffic management. He also mentioned about the efforts in refining the certification system for unmanned aircraft to facilitate the low-altitude economy’s growth.
The Monetary Authority of Singapore (MAS) has announced the expansion of its regulation on cryptocurrency-related activities to include custodial services and cross-border money transfers. The amendments to the Payment Services Act (PS Act) aim to provide regulatory clarity and user protection in the cryptocurrency sector.
Under the new regulations, digital payment token (DPT) or cryptocurrency service providers will be required to comply with user protection and financial stability-related requirements. These include segregating customers’ assets in a trust account, maintaining proper books and records, and ensuring effective systems and controls are in place.
The expansion of the regulations is seen as a response to the volatility and turmoil experienced in the cryptocurrency sector, including the crash of FTX. By broadening the scope of regulation, Singapore aims to address regulatory gaps and promote stability in the cryptocurrency ecosystem.
Angela Ang, a senior policy adviser for blockchain intelligence firm TRM Labs and a former MAS regulator, expressed that the expansion of the regulations is a long-awaited development that provides regulatory clarity to key aspects of the crypto ecosystem, particularly custodial services.
The amendments are scheduled to take effect within six months from 4th April 2024. Existing entities engaged in crypto-related activities under the Payment Services Act are required to initiate a transition process within 30 days and submit a license application within six months. To obtain the license, these entities must demonstrate compliance with anti-money laundering and countering the financing of terrorism requirements, which will be validated by an external auditor within nine months.
Failure to comply with the requirements will result in entities being required to cease all cryptocurrency-related activities
President Yoon Suk Yeol announced plans for South Korea to increase its biotechnology sector output fivefold to $149 billion by 2035, up from $43 trillion in 2020. This projection encompasses all biopharmaceutical products, medical equipment, supplements, biomass, and biotech-related services.
The current administration aims to foster growth in the life sciences sector, increasing the annual establishment of venture firms from the current 400 to over 1,000 by 2035. This goal will be pursued by enhancing investments in research and development from next year. Yoon stated that “The cutting-edge biotechnology industry will become the next growth engine, mirroring the success of the semiconductor industry here.”
North Chungcheong Province, a significant life science hub, hosts various government agencies and generates substantial industry revenue. The government plans to bolster this by supporting a new science and technology campus and attracting more firms related to this emerging technology. Efforts in this direction are projected to bring a potential revenue of 2.1 trillion won and 29,000 new jobs.
Sam Bankman-Fried, the CEO of cryptocurrency exchange FTX, has been sentenced to 25 years in prison by U.S. federal judge Lewis Kaplan for his involvement in a fraud and conspiracy scheme that led to the collapse of FTX. The judge criticized Bankman-Fried for his lack of remorse and characterized his attempts to portray himself as an altruistic individual to the public as nothing more than an act. In addition to his prison sentence, Bankman-Fried has been fined $11 billion and will have to sell off assets such as a private jet. The defense’s argument claiming that Bankman-Fried was not likely to commit future crimes was dismissed by the judge.
Bankman-Fried’s 25-year prison sentence follows his conviction on seven criminal counts in November, a year after FTX filed for Chapter 11 bankruptcy. He plans to appeal the conviction, which, according to his lawyer, cannot proceed until after Kaplan’s sentencing decision.
During the sentencing hearing, the judge heard comments from various individuals involved in the case, including prosecutors, Bankman-Fried’s attorney, a victim, a lawyer representing other FTX victims, and Bankman-Fried himself. U.S. Attorney Damian Williams stated that the sentence sends a powerful message that financial crimes will face swift and severe consequences. The judge also noted that Bankman-Fried’s reputation has suffered greatly, but acknowledged his persistence and marketing skills while justifying the lengthy sentence.
Bankman-Fried’s attorney, Mark Mukasey, argued that his client’s decisions were guided by mathematical considerations rather than malice.
In his statement, Bankman-Fried expressed concern for the FTX customers awaiting the return of their funds, emphasizing that he was more focused on their needs rather than his own emotional life or theoretical future children. He acknowledged that his useful life was likely over, having spent the last six months in the Metropolitan Detention Centre in Brooklyn. Bankman-Fried also claimed that there were sufficient assets for FTX’s creditors to be repaid in full, despite the self-induced “liquidity crisis” the company faced. He expressed regret for his role in FTX’s collapse and took responsibility for it, extending apologies to his former friends and government witnesses.
