South Korean markets suffered a severe selloff on Tuesday, with the KOSPI index closing 10.84% lower at 6,023.63, having briefly dipped below the 6,000-point mark for the first time since April. The decline was led by chip giants SK Hynix, which tumbled over 14%, and Samsung Electronics, down more than 13%. The broader slump comes amid intensifying global trade tensions and a rout in technology shares, with the KOSPI now down nearly 30% from its June peak.

In response to the market turmoil, South Korea's Financial Services Commission (FSC) is studying a measure that would limit individual stock leverage to 20% of an investor's total financial product holdings. FSC Chairman Lee Yig-won said the regulator will first assess the impact of stricter margin requirements set to take effect on July 31, but is prepared to introduce additional caps if needed. The proposal seeks to curb the influence of single-stock leveraged ETFs, which have amplified market swings and drawn criticism from lawmakers.

Speaking at the ASEAN Tech Summit Manila 2026, Binance co-founder Changpeng Zhao voiced support for a regional crypto license passport, arguing that companies regulated in one ASEAN market should be able to operate in others through a streamlined process. Zhao said cross-regional coordination is technically straightforward and would improve services while lowering costs for consumers. The proposal, originally put forward by the founder of the Fintech Alliance of the Philippines, would mirror existing frameworks for collective investment schemes and professional fund advisors within ASEAN.

The Hong Kong Monetary Authority (HKMA) published a white paper on quantum readiness for the banking industry, revealing that 68% of surveyed banks have begun planning for post-quantum cryptography (PQC), but 32% have yet to start. The authority's new Quantum Readiness Index scored the sector at just 2.3 out of 10, indicating an early stage of deployment. The HKMA plans to roll out PQC tools and workshops with a goal of helping all banks prepare for the quantum era by 2030.

Hong Kong-listed Fenbi Group revealed it lost approximately $8.3 million (56.15 million yuan) from selling ETFs and listed securities between July 1 and 7. The disclosure stands in stark contrast to remarks made by former CEO Zhang Xiaolong in June, when he boasted about making 53 million yuan in a month from investing 80 million yuan in the stock market. The company's board said it is closely monitoring its remaining portfolio, which still holds securities worth about $8.5 million.

Ruling party lawmakers are discussing the possibility of seeking government compensation for investors who suffered losses in single-stock leveraged ETFs tracking Samsung Electronics and SK Hynix. The controversy stems from the FSC's May 27 decision to allow such products, which quickly attracted over 16 trillion won in assets before amplifying market declines. Legislators are considering a parliamentary investigation into whether the authorities rushed the approval process.

Japanese stocks were also swept up in the regional rout, with the Nikkei 225 index closing 3,930 points lower at 63,789 for a 5.8% decline. The drop was fueled by heavy losses in semiconductor and electronics shares, reflecting investor concerns over U.S. trade policy and a potential slowdown in AI-related demand. The yen's recent strength against the dollar has also weighed on export-oriented companies.

Spot bitcoin trading volumes on major exchanges have plunged more than 75% from their late 2024 highs, falling to levels not seen since the 2023 bear market, according to CryptoQuant. Binance's July volume exceeded $35 billion, down from $246 billion in November 2024, while Bybit saw an 85% drop and OKX a 67% decline. Analysts blamed geopolitical tensions, inflation fears, and competition from equities for draining speculative interest in crypto.

Singapore-based digital asset investment manager Psalion has closed its third venture capital fund at $50 million, its largest to date, with a focus on blockchain infrastructure, trade finance, real-world assets, stablecoins, and DeFi. The fund will target seed and pre-seed stage companies, and managing partner Tim Enneking said the current market downturn presents attractive entry points with more reasonable valuations.

Authorities searched the residence of former Incheon Mayor Yoo Jeong-bok as part of an investigation into whether he concealed 21,000 units of virtual assets during a local election. Yoo and his wife allegedly transferred the digital assets to an overseas exchange and failed to report them in their candidate property disclosures. The case highlights the growing scrutiny of crypto holdings among public officials in South Korea.