Report: North Korea-Sponsored Hacks Comprise 65 Percent of Total Crypto Stolen

Hacker group “Lazarus,” reportedly funded by North Korea, has stolen a staggering $571 million in cryptocurrencies since early 2017, a study conducted by cybercrime company Group-IB reveals. Key takeaways from the study were published Tuesday, Oct. 16, alongside the full annual report, entitled “Hi-Tech Crime Trends.”

The report, dedicated to hacks in 2017 and 2018, identifies the allegedly state-sponsored hacker group Lazarus as responsible for $571 million of the $882 million total in crypto that was stolen from online exchanges during the studied time period; almost 65 percent of the total sum.   

Out of fourteen separate exchange breaches, five have been attributed to the group, among them the industry record-breaking $532 million NEM hack of Japan’s Coincheck this January.

The report states that hackers target cryptocurrency exchanges using mostly “traditional” methods, including spear phishing, social engineering, and malware:

“After the local network is successfully compromised [through downloaded malware], the hackers browse the local network to find work stations and servers used working with private cryptocurrency wallets.”

The report, which also includes a cybercrime forecast, predicts the number of attacks on exchanges to increase in future, as an alternative to traditional targets such as banks.

Group-IB further indicates that Initial Coin Offering (ICO) platforms are prime targets for hackers, revealing that 10 percent of total funds raised from token sales in 2017–2018 were stolen. A majority of illicit activity targeting ICOs was reportedly conducted through phishing methods, with Group-IB estimating that large phishing groups have the capacity to steal around $1 million a month.

Additionally, Group-IB suggests that mining pools could prove an easy target for 51 percent attacks by state-sponsored hackers. Attempts at such attacks, albeit with limited success, are said to already be on the rise.

U.S. experts have previously alleged that North Korea is “increasingly” turning to crypto as a tactic to circumvent sanctions, claiming that the country’s government is hiring people to “launder” cryptocurrencies via multiple wallets and exchanges, as well as so-called mixing services, with the aim of obtaining sanction-free U.S. dollars.

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‘Treasure Ship’ ICO Dupes Investors – South Korea Asks Interpol for Help

News

South Korean police have asked Interpol for help with an investigation into the fraudulent token sale of Shinil Gold Coins that were claimed to be backed by the “treasure” on the sunken Dmitrii Donskoi. Local media reported that the sale raised an estimated $53.5 million from about 124,000 investors.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Treasure Ship Without Treasure

South Korean company Shinil Group announced on July 18 that it had discovered the shipwreck of Russian battleship Dmitrii Donskoi that was scuttled in 1905. The company also claimed at the time that about 200 tons of gold were found on board.

'Treasure Ship' ICO Dupes Investors - South Korea Asks Interpol for HelpThe firm subsequently backtracked on its treasure claims after the country’s financial watchdog, the Financial Supervisory Service (FSS), started investigating it for stock and initial coin offering (ICO) fraud, as news.Bitcoin.com previously reported.

However, before withdrawing its claims, the ICO presale had already taken place through a Singaporean company with the same name, Shinil Group, the Korea Herald described. Shinil Gold Coin tokens are supposed to be backed by the treasure on the Dmitrii Donskoi. Nikkei reported that a full-page advertisement was run in a South Korean newspaper last month, detailing:

The newspaper ad said Shinil, one or the other, would soon show video of the Donskoi wreck and, in the first half of 2019, distribute dividends worth 10% of the value of the treasure that it estimated at 150 trillion won ($133 billion) to holders of the Shinil Gold Coin cryptocurrency.

'Treasure Ship' ICO Dupes Investors - South Korea Asks Interpol for HelpCiting that the tokens were sold “to some 124,000 investors” during the presale, the Korea Herald elaborated, “Shinil was estimated to have raised funds worth almost 60 billion won [~$53.5 million] as of July 26 on the claim.”

The Singaporean Shinil Group claims that “the value of a coin was expected to rise to 10,000 won [~$9] compared to a presale price of 30-50 won [~$0.03-0.05], once it completed an initial coin offering on cryptocurrency exchanges,” the publication added.

Meanwhile, “experts have said imperial Russia would have no reason to load vast treasure on a ship that was going into battle and have also noted that there was a safer land route to Vladivostok, the treasure’s supposed final destination,” AFP reported.

Connection to Singaporean Company

As the FSS launched its investigation of the firm for financial fraud, Korean police also launched a criminal investigation.

'Treasure Ship' ICO Dupes Investors - South Korea Asks Interpol for HelpChoi Yong-seok, president of the Korean Shinil Group, insisted that “Shinil Group in Singapore had nothing to do with Shinil Group in South Korea.” However, the Korea Herald pointed out that “the two companies’ founders are siblings, and the Singapore firm has been selling virtual coins, reportedly with a promise of handsome returns in case treasure is salvaged from the ship.”

Police say “the founder of the Singaporean Shinil Group, surnamed Ryu, was also wanted in connection with fraud allegations dating back to 2014” and they had already requested Interpol’s assistance with him, AFP noted. “Police has been hunting for Ryu since 2014, when he fled the country during a separate investigation…We are asking police in any relevant country to help locate and repatriate him at the earliest possible date.”

Officials of the Korean Shinil Group, including Choi, “have had travel bans imposed on them,” the news outlet detailed:

Police in Seoul requested an international arrest warrant for the founder of a Singapore-based firm Thursday after launching an investigation into the company and a South Korean startup over false claims of discovering a long-lost Russian ‘treasure ship’.

What do you think of this treasure ship scheme? Let us know in the comments section below.


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Korea’s Financial Watchdog Calls for Stock Trading on a Blockchain


South Korea’s primary financial watchdog has backed the use of blockchain technology as the core infrastructure for trading stocks in the country.

First reported by domestic news publication Korea Joongang Daily, the Financial Supervisory Service (FSS) has advocated the use of blockchain for stock trading in a report focused on the subject released on Thursday. In a significant backing of the technology, the FSS called on the country’s regulatory agencies and firms to jointly work and develop an integrated blockchain system that negates the use of a conventional centralized ledger and system to track transaction.

Blockchain technology offers the promise of safer and tamper-proof transactions, the FSS report said, suggesting that conventional transaction systems with an overseer or centralized record-keeper is riddled with inefficiencies and vulnerable to hacking attacks.

The FSS also researched the use of blockchain technology among stock exchange transactions in several countries including Japan, the United States and Australia.

As reported by CCN, the Australian Securities Exchange (ASX) – Australia’s largest stock exchange – will become the world’s first major exchange operator to implement blockchain technology for its clearing and settlement system with a planned rollout in 2020. In doing so, the ASX is replacing its existing post-trade system that has been operational for the last 25 years.

In the United States, Nasdaq – the world’s second-largest stock exchange by market capitalization – has already launched Linq, a blockchain platform that enables private companies to trade their shares on the platform. The Japan Exchange Group (JPX), Asia’s largest stock exchange operator, has also established a consortium to specifically research blockchain applications in late 2016 and has since received a regulatory green-light from Japan’s financial regulator to use the decentralized technology as the code driver for its trading infrastructure.

Urging regulators, authorities and the financial industry to come together in developing a blockchain stock trading platform, an excerpt from the FSS report added:

There should be no barrier between public institutions and private companies in developing a blockchain system.

The FSS report went on to add that Korea’s embrace of blockchain is still in a preliminary stage, despite the notable successes of major trails including a 7-month pilot of imports and exports from Korean shipping ports tapping a blockchain developed by Samsung SDS, the IT subsidiary of electronics giant Samsung.

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South Korea's Financial Watchdog Calls for Integrated Blockchain System for Stock Trading

South Korea’s Financial Supervisory Service (FSS) has advised local regulatory agencies and companies to work towards developing an integrated blockchain system for stock transactions, according to an official report published August 2.

The FSS undertook a detailed analysis of international stock exchange operators’ use of blockchain technology to date, focusing on existing initiatives in the U.S., Japan, UK and Australia, among others.

The report concluded that a tamper-proof blockchain-based system would increase the efficiency, integrity and security of tracking and storing transactions. The report added that existing conventional systems that use a centralized ledger are both less efficient and more vulnerable to hacks.

The FSS report specifically studied U.S. exchange Nasdaq’s use of blockchain for record keeping for its private market, using a system called Nasdaq Linq.

It also looked into the London Stock Exchange Group’s blockchain-powered platform for the issuance of private shares, as well as explorations into using blockchain for capital market infrastructure by a Japanese consortium comprised of 36 financial companies.

The most ambitious case study considered by the watchdog was the Australian Securities Exchange’s plans to eventually wholly replace its existing clearing and settlement system with a permissioned, distributed ledger-based alternative.

The report considered that blockchain applications in Korea are still at a relatively early stage, taking note of plans by the Korea Exchange’s KRX Start-up Market to implement the technology for transaction settling transactions of unlisted companies, as well as a blockchain trial project underway by the state-run Korea Securities Depository.

On the basis of its findings, the FSS further pledged to “establish long-term planning and continue to promote proofs-of-concept and pilot projects on a project-by-project basis, [as well as to] continue to study the [application of] blockchain […] in capital market[s].”

In May, the newly appointed governor of the FSS, Yoon Suk-heun, said that he sees “some positive aspects” to cryptocurrencies, saying that better crypto-specific regulation “would produce” the secure financial system that would make them more accessible.

In July, Cointelegraph reported that Korean regulators had pledged to introduce new legislation that would be conducive to blockchain investment, the same month as three Korean ministries were said to be working to produce the final draft of a comprehensive blockchain industry classification scheme for the country.

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Korea's Financial Regulator Wants to Use the Blockchain for Stock Trading

South Korea’s financial watchdog is advocating for a blockchain-based stock trading system.

The Financial Supervisory Service’s (FSS) appeal was part of a new study published by the agency on Thursday, which was first reported on by Korea JoongAng Daily. The study reportedly encourages South Korean regulatory agencies and companies to collaborate on the development of the proposed system, and also examines the use of the blockchain by stock operators around the globe.

The usage of blockchain in stock trading is already well established, with the Australian Securities Exchange (ASX) first trialing distributed ledger tech for its settlement and clearing system, called CHESS, in 2016. ASX said in April that it expects to roll out the new system in 2020.

Likewise, U.S. stock market Nasdaq unveiled a blockchain-based private securities platform in 2017, and the London Stock Exchange experimented with using the blockchain to replace paper trading certificates later that year. The Japan Exchange Group (JPX) also founded a consortium to explore blockchain applications to capital markets infrastructure in 2017.

The study reportedly noted that the exploration of blockchain use cases in Korea has only recently started, and that cooperation between private and public companies would be integral to the success of any future system.

“There should be no barrier between public institutions and private companies in developing a blockchain system,” the FSS was quoted as saying.

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South Korea Plans to End Major Tax Benefits for Bitcoin Exchanges

South Korea Plans to End Major Tax Benefits for Bitcoin Exchanges

Taxes

The South Korean government has announced a new set of tax law amendments. Under this proposal, bitcoin exchanges will no longer be eligible for income and corporate tax deductions currently enjoyed by small and medium-sized businesses. The regulators have also been considering imposing capital gains tax on the sale of cryptocurrencies.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Stripping Away Tax Benefits

The South Korean government has announced its proposed Revised Tax Law 2018. In the official statement published Monday, the government wrote, “from next year, virtual currency handling businesses will be excluded from the industries eligible for the tax reduction for SMEs [small and medium-sized enterprises].”

South Korea Plans to End Major Tax Benefits for Bitcoin Exchanges
The South Korean government announcing 2018 tax amendments.

News1 explained that crypto exchanges “have been considered as venture companies or small and medium-sized businesses for tax purposes until now,” allowing them to benefit from considerable income tax deduction. Citing other favorable tax treatments such as depreciation of assets acquired during the first four years, the publication elaborated:

Under the current tax exemption rules, income tax and corporation tax are reduced by 50% to 100% for five years for business startups, SMEs and venture companies.

Crypto Exchanges to Pay Higher Taxes

South Korea Plans to End Major Tax Benefits for Bitcoin ExchangesAccording to the news outlet, the government has decided to exclude crypto exchanges from the list of entities eligible for SME tax deduction “because the cryptocurrency trading business lacks the effect of creating added value.” The revised tax law will be submitted to the National Assembly and, if passed, will go into effect next year.

Crypto exchanges are currently liable to pay corporation tax of up to 22%, Seoul Finance described, adding that “considering that virtual currency exchanges earned huge amounts of money in the last year and earlier this year, it is estimated that the amount of exemption would be considerably large.” The publication conveyed that under the current setup:

Bitsum exchange, which is estimated to have net profit of over 250 billion won [~US$223 million] last year, should pay 54.4 billion won [~$48.6 million] in corporate tax but it is expected to save 27.2 billion won [~$24.3 million] since it receives 50% reduction.

However, “taxation on the sale of cryptocurrency was not included in the amendment bill…based on the judgment that more research is needed,” the publication emphasized. “The government has been considering imposing capital gains tax virtual currency trading profits since early this year, but no specific taxation bill has come out.”

What do you think of the Korean government proposing to take away tax benefits for crypto exchanges? Let us know in the comments section below.


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Korea is Pushing Positive Crypto Legislation: What Happens After it’s Passed?


The government of South Korea is hurrying the finalization of the country’s first crypto and blockchain legislation, to recognize the cryptocurrency and blockchain sector as legitimate industries.

What it Means For Crypto

As CCN reported, local financial authorities initially disclosed their intent to regulate the cryptocurrency market with stricter but more comprehensive regulatory frameworks to protect investors and facilitate the growth of startups in the blockchain industry.

Government personnel admitted earlier this year that the financial authorities were reluctant towards regulating the cryptocurrency market because they feared local investors would consider decision as the adoption and embracement of cryptocurrencies by the government.

However, in June, subsequent to two security breaches experienced by Bithumb and Coinrail, formerly the second and fourth largest cryptocurrency exchanges in South Korea, the government acknowledged the necessity of strict regulatory frameworks to oversee the local cryptocurrency market.

Previously, cryptocurrency exchanges were governed as communication vendors, outside of the scope of the Financial Services Commission (FSC), the main financial watchdog of South Korea. Companies were permitted to run trading platforms with a simple communication vendor license, which costs less than $40 with no base capital and requirements.

Upon the finalization and passing of the new cryptocurrency and blockchain bill, digital asset exchanges will be considered as regulated financial institutions and will be under the control of the FSC. Strict security measure, internal management system, Know Your Customer (KYC), Anti-Money Laundering (AML), and transaction monitoring requirements will be demanded by the government, to ensure crypto exchanges provide the same level of service as commercial banks and major financial service providers.

“Under current regulations, there are clear limitations in preventing money laundering on crypto exchanges because the only way authorities can spot suspicious transactions is through banks. If the bill of lawmaker Jae Yoon-kyung from the Democratic Party of Korea passes, local authorities will be able to impose identical regulations on crypto exchanges that are implemented on commercial banks,” a KFIU spokesperson said.

If passed before the end of 2018, the newly created cryptocurrency and blockchain bill is expected to play a vital role in facilitating more capital to flow into the local crypto market in the upcoming years, crucially throughout 2019.

The vast majority of analysts are predicting the price of major digital assets to surge drastically by the year’s end and sustain strong momentum over the next 12 months. If the next rally of cryptocurrencies can be supported by positive legislation initiated by the third biggest crypto market in the world behind the US and Japan, the movement of the market will be significantly intensified.

How Far Away is it?

Already, cities like Busan, the second biggest city in South Korea behind Seoul with a population of 3.5 million, have disclosed their plans to create vibrant environments for cryptocurrency startups and blockchain development teams, assuming the bill will be passed in the next several months, possibly in the fourth quarter of 2018.

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Binance Will Face Tough Competition in South Korea in New Market Expansion


Binance, the world’s largest cryptocurrency exchange, is planning an expansion into South Korea, the third biggest cryptocurrency market behind Japan and the US.

South Korea’s Unique Market Structure

In South Korea, two major digital asset trading platforms have had dominance over the crypto exchange market for several years. UPbit, an exchange created and developed by Dunamoo, a subsidiary of the country’s largest internet conglomerate Kakao, and Bithumb have had nearly 90 percent market share since 2017.

However, recent controversy surrounding Bithumb and the questionable decision of the exchange to continue to suspend deposits and withdrawals to this date, more than a month since its $40 million security breach in mid-June, led local investors to reconsider the dominance of Bithumb and migrate to alternative cryptocurrency exchanges.

UPbit is a tough competition for any exchange in the global market, because of its parent company. Dunamoo, which operates KakaoStock, the most widely utilized online stock brokerage app in the country, is directly controlled by Kakao, which oversees KakaoPay, KakaoStory, KakaoTaxi, and KakaoTalk, applications that have over 80 percent dominance over their respective markets.

On UPbit, due to the platform’s connection with Kakao, users can easily purchase and sell cryptocurrencies using KakaoPay, one of the two most popular payment applications in South Korea alongside Samsung Pay.

Despite the dominance Kakao has over the Internet, finance, fintech, and cryptocurrency sector of South Korea, 2018 would be an impeccable period for any foreign exchange to enter with the vision of evolving into a market leader because Bithumb, which previously was the largest cryptocurrency exchange in South Korea, drifted apart and has struggled to recover from its hacking attack.

The unapologetic actions of Bithumb, portrayed by its focus on expanding its trading platform to the UK without addressing its security and internal management issues on its main platform in South Korea, led investors to lose trust in the exchange, to the point in which many Bithumb investors submitted complaints to the South Korea Blockchain Association for approving Bithumb as an exchange equipped with adequate security measures.

If Binance enters the crypto market of South Korea within 2018, it will compete against Huobi, Gopax, Korbit, Coinone, Coinnest, and OKCoin Korea, to secure a dominant position in the local crypto exchange market to operate alongside UPbit.

All of the abovementioned exchanges are financially and strategically backed by some of the most influential conglomerates in South Korea. Gopax and Korbit for instance, are financed by Shinhan Bank and SKT, the country’s second biggest bank and the largest telecommunications corporation.

No Office Yet, But Soon

The government of South Korea is speeding the process of passing the first cryptocurrency and blockchain legislation, which will regulate crypto exchanges as regulated financial institutions.

Binance told CCN that its team is currently evaluating the policy around cryptocurrency businesses in South Korea, and will enter the market after the final decision is made by local financial authorities.

“Currently we have no office in Korea and whether Binance will enter Korea in the future depends on progress in Korean policy.”

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Binance Plans to Expand Into South Korea

Cryptocurrency exchange Binance is making plans to expand operations into South Korea, reports Business Korea.

Per the report, Binance CEO Changpeng Zhao hinted at his company’s expansion plans while speaking at the Blockchain Partners Summit in Seoul last weekend.

While South Korea is presumed to be the third-largest crypto market after the U.S. and Japan, it hasn’t been a smooth ride for the cryptocurrency exchanges operating there. Bithumb and Coinrail were hacked earlier this year, while tax authorities have raided Coinone on tax evasion allegations.

Binance seems to be undeterred by all this, as it has been laying the groundwork for its expansion into South Korea for a while. Last year, the company added Korean language support to its site.

While there is no official data on the exchange’s user base in South Korea, its volume seems significant enough for the company as it has moved from language support into hiring top Korean executives to man critical roles in the country. Jeon Ah-rim and Choi Hyung-won were hired as local marketing manager and director of its social impact fund, Binance Lab, respectively.

Binance, the world’s largest cryptocurrency exchange by daily volume is always expanding as it seeks to achieve its goal of earning $1 billion in net profit in 2018. With an operational base in Hong Kong, the company has grown so fast that it has more users worldwide than Hong Kong has citizens.

The company, which started in Beijing, has been battling regulatory issues at every turn. It moved to Hong Kong right before cryptocurrency exchanges became illegal in September 2017. It has opened offices in Tokyo, the island of Jersey, Uganda and, more recently, Malta, where it seeks to “grow its operations” in a country that is friendly toward crypto businesses.

Binance’s expansion into South Korea comes at a time when lawmakers are seeking to fast-track crypto regulations and lift the ban on ICOs.

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S. Korea’s Top Telephone Company Reveals Its Own Blockchain Network

State-owned KT Corporation, South Korea’s largest telephone company, has announced the launch of its blockchain-powered commercial network. The firm has built a blockchain layer on top of its existing nationwide network in order to make it “more secure and transparent,” according to an article by The Korea Herald published Tuesday, July 24.

The news outlet reports the head of KT Blockchain Center Seo Young-il as saying that blockchain tech can be used in telecommunications for secure and efficient data management. Seo added:

“The whole point of applying blockchain to networks is to address security and transaction issues by making the current networks more secure and trusted.”

With its new network, KT plans to allow its individual and corporate clients to store and transfer their digital data with “less hacking risks,” The Korea Herald further reports. The network has a claimed capacity of 2,500 transactions per second (TPS), compared to Bitcoin’s (BTC) 3 TPS and Ethereum’s (ETH) 15 TPS.

KT Corp. also has plans to offer blockchain-based roaming services with international mobile carriers, such as NTT Docomo, the top provider in Japan. According to The Korea Herald, the use of blockchain will allow the company to calculate roaming bills in real time and improve the speed of internet connection for customers.

Cointelegraph reported on July 6 that KT Corporation has joined the Carrier Blockchain Study Group (CBSG), a global blockchain consortium of telecom companies whose goal is to create a cross-carrier blockchain ecosystem with such capabilities as “[cell phone] top-up, roaming wallet, secured clearing and settlement, personal authentication [and] IoT applications.”

The blockchain market in Korea is expected to grow 20 times over in four years – from $44 million in 2018 to about $887 million in 2022 – The Korea Herald reports, citing the country’s Ministry of Science and information and communications technology (ICT).

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South Korea’s Crypto Regulation Shakeup: New Bureau, Agreement With China

Regulation

South Korea’s top financial regulator is planning a major organizational restructuring that includes introducing some new crypto policy initiatives. A bureau dedicated to financial innovations that include cryptocurrencies is being set up. In addition, an agreement with Chinese authorities relating to crypto and initial coin offerings has also been reached. Meanwhile, the contracts between Korean crypto exchanges and banks for real-name accounts will expire this month.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Major Organizational Restructuring

South Korea’s Crypto Regulation Shakeup: New Bureau, Agreement With China
FSC Chairman Choi Jong-ku.

Last week South Korea’s top financial regulator, the Financial Services Commission (FSC), said it will undergo a “major organizational restructuring.” As part of the plans, it “will establish a department exclusively for policymaking initiatives in the nation’s blockchain industry,” the Korea Times described.

The new department, called the Financial Innovation Bureau, will have a two-year lifespan. Its establishment is part of the FSC’s “restructuring plan to lead financial innovation in the coming Fourth Industrial Revolution era,” the news outlet explained, adding that “it will help nurture Korea’s fintech industry, mostly covering the nation’s cryptocurrencies and blockchain technology.”

Citing that the Commission is planning “a major organizational reshuffle to better protect financial consumers,” an FSC official elaborated:

The new Financial Innovation Bureau will also be tasked with policy initiatives for financial innovation, such as innovating financial services using fintech or big data, and responses to new developments and challenges such as cryptocurrencies.

Agreement with China

South Korea’s Crypto Regulation Shakeup: New Bureau, Agreement With China
Yoo Kwang-yeol.

Chosun reported last week that First Senior Deputy Governor of South Korea’s Financial Supervisory Service (FSS), Yoo Kwang-yeol, recently met with the Deputy Chairman of the Insurance Supervision and Management Committee of the Bank of China. They agreed to integrate the Financial Supervisory Cooperation Agreement.

The initiative between the two countries began as the FSS reviewed the process of establishing foreign branches for Korean insurance companies in China. “The two organizations have decided to expand their monitoring experience and information exchange on internal control of financial institutions and anti-money laundering,” the publication details, adding:

In a meeting with the China Securities Regulatory Commission, a cooperative channel was set up, including the establishment of a working-level hotline … it will jointly respond to new emerging global supervisory and regulatory issues such as international financial regulation, virtual currency, ICO [initial coin offering] and fintech.

This was not the first time the two governments discussed collaborating on crypto measures; earlier this year news.Bitcoin.com reported that the South Korean regulators were seeking to collaborate with China and Japan. In February, the country’s Minister of Strategy and Finance, Kim Dong-yeon, met with the governor of the People’s Bank of China to discuss economic issues of both countries as well as cryptocurrency policies.

Tax Benefits for Blockchain Companies

South Korea’s Crypto Regulation Shakeup: New Bureau, Agreement With ChinaAt the meeting of the ministers on economic policies, the government decided on a plan to revitalize the country’s investment incentive system, the Korea Times reported this week. Blockchain was added to the list of emerging technologies eligible for tax benefits. “In order to alleviate the investment burden of companies that use new technology,” the publication explained that the government has decided to “apply the tax benefits to blockchain” technology, noting:

Blockchain-based information security technology, quantum computing (advanced computer technology that operates on the principle of quantum mechanics), and commercialization facilities to the range of new growth technologies [are] to be subject to tax exemption under the Tax Exemption Restriction Act (157 technologies in 11 existing sectors).

Real-Name Account Contracts Expiring

South Korea’s Crypto Regulation Shakeup: New Bureau, Agreement With ChinaThe South Korean government implemented the real-name system for cryptocurrency trading accounts at the end of January. According to Money Today, the contracts between crypto exchanges and commercial banks for the issuance of real-name accounts must be renewed “every six months to encourage virtual currency trading sites to continue their anti-money laundering efforts.” Existing contracts will expire at the end of this month.

So far, only the country’s four biggest crypto exchanges have real-name account contracts. While Upbit, Bithumb, Coinone, and Korbit can issue real-name accounts for their customers, other exchanges continue to use corporate accounts. In addition, only three banks currently offer real-name account services despite six of them having the capability to do so. The publication elaborated:

Currently, Bithumb has contracts with Shinhan Bank and Nonghyup Bank. Upbit is with IBK, Coinone with Nonghyup Bank, and Korbit with Shinhan Bank.

At the time of contract renewals, Coinplug may become the fifth trading platform to have a real-name contract with a bank, the news outlet detailed, citing that the company “has been in talks with Shinhan Bank since the beginning of this year.”

What do you think of South Korea’s crypto initiatives? Let us know in the comments section below.


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Korea’s Financial Regulator Will Establish a Positive Cryptocurrency Policy Body


South Korea’s primary financial regulator will establish a new policy-making body centered on nurturing Korea’s fintech industry with a specific focus on cryptocurrency and blockchain technology.

The Financial Services Commission (FSC) is set to establish a new policymaking body dubbed the Financial Innovation Bureau to proactively help the fintech industry while formulating policies for the cryptocurrency sector, the Korea Times reports.

The decision to establish the new body was taken during a cabinet meeting between the FSC and the Ministry of the Interior and Safety this week amid an organizational reshuffle to better safeguard investors while nurturing financial innovation bought on by new technologies like blockchain and cryptocurrency.

An FSC official told the publication:

“The new Financial Innovation Bureau will also be tasked with policy initiatives for financial innovation, such as innovating financial services using fintech or big data, and responses to new developments and challenges such as cryptocurrencies.”

While the new body will see a temporary life-span of two years, it will markedly cover South Korea’s existing cryptocurrency and blockchain ecosystem, the FSB confirmed.

Pointedly, the new body will look to adopt the financial regulator’s recent positive outlook toward the sector wherein domestic cryptocurrency exchanges could soon be faced with guidelines similar to commercial financial institutions as lawmakers seek to fast-track bills regulating the sector.

Despite a domestic ICO ban – taking a cue from China – South Korea is also looking at loosening previous restrictions in sticking with the wider G20 directive of uniform global regulations among member bodies. The Korea Times report adds that the regulator’s stance is ‘believed to side with the Financial Stability Board’s recent report that claimed crypto assets ‘do not pose material risk to global financial stability.’”

As reported earlier this week, the Financial Stability Board (FSB) – an international G20 watchdog and body to coordinate regulation for member nations – published its report on cryptocurrencies. FSB chairman and Bank of England governor Mark Carney called for ‘vigilant monitoring in light of the speed of market developments’ of the sector.

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