Tag: South Korea

South Korea Invests in Metaverse Fund for Economic Growth

by Blockchain News

South Korea has been making significant investments in the metaverse, seeing it as a potential new economic growth engine. The country’s Ministry of Science and ICT recently announced a major investment in a fund dedicated to driving metaverse initiatives, with the goal of supporting the mergers and acquisitions of various firms in the metaverse ecosystem and helping domestic metaverse-related companies compete with global players.

The South Korean government has invested 24 billion Korean won ($18.1 million) to create a fund of more than 40 billion Korean won ($30.2 million) for metaverse development. The fund, called the Metaverse Fund, aims to help local players raise capital and compete with major tech companies, which have shown increasing interest in the metaverse.

The government recognizes that it can be difficult for local players to raise capital through private investments due to the underlying investment risks. As a result, the Metaverse Fund will provide a new avenue for investment and support to local companies looking to expand their metaverse-related offerings.

In addition to investing in the Metaverse Fund, South Korea also plans to actively support local metaverse-related companies. The country aims to help these firms compete with global players and plans to assist in their growth and development.

However, while South Korea is investing heavily in the metaverse, the country is still cautious about potential cross-border threats. In February, the country announced independent sanctions related to cryptocurrency thefts and cyberattacks against specific North Korean groups and individuals. This move demonstrates South Korea’s commitment to maintaining checks and balances on potential threats in the physical world.

Overall, South Korea’s investments in the metaverse reflect the country’s commitment to exploring new opportunities for economic growth. By supporting local companies and investing in the development of the metaverse ecosystem, South Korea is positioning itself to be a leader in this emerging field.

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South Koreans transacted $4.3 billion through illegal crypto exchanges

by Blockchain News

South Korea has been tightening its regulatory regime towards crypto exchanges, but it seems that some citizens are still engaging in illegal transactions. According to local sources, South Koreans transacted 5.6 trillion Korean won ($4.3 billion) through illegal crypto exchanges in 2022, a significant increase from the previous year. The Korea Customs Service provided the numbers, indicating that the overall amount of funds caught in economic crimes increased from 3.2 trillion won ($2.5 billion) in 2021 to 8.2 trillion won ($6.2 billion) last year.

Out of all the illicit money traffic captured by officers, crypto transactions comprised almost 70%. However, the total amount of intercepted digital assets ($4.3 billion) only accrues for 15 transactions. These transactions were aimed at purchasing foreign virtual assets with the intention of selling them in the country later. This is because the South Korean regulatory regime isolates the local market and makes the prices of foreign crypto higher for customers.

The government has been cracking down on illegal crypto exchanges since 2017, when the Foreign Exchange Transactions Act required entities involved in crypto transactions to get regulatory approval from the Financial Services Commission. Hence, the attempts to participate in the global crypto trade, from foreign players coming to the Korean market or domestic investors seeking a better exchange course abroad, are labeled “illegal.”

In August 2022, the Korea Financial Intelligence Unit took action against 16 foreign-based crypto firms, including KuCoin, Poloniex, and Phemex. All 16 exchanges have purportedly engaged in business activities targeting domestic consumers by offering Korean-language websites, running promotional events targeting Korean consumers, and providing credit card payment options for cryptocurrency purchases. These activities all fall under the Financial Transactions Report Act.

The Korean customs also reported detaining 16 individuals involved in illegal foreign exchange transactions connected to crypto assets worth roughly $2 billion. These cases demonstrate the government’s determination to crack down on illegal crypto transactions and to promote a safe and regulated crypto market.

However, some critics argue that the South Korean government’s regulatory regime is too strict, which has led to the country missing out on potential economic benefits. They suggest that a more balanced approach should be taken to ensure that the country can benefit from the growing crypto market while still maintaining a safe and regulated environment. Regardless, it is clear that illegal crypto exchanges are still a significant issue in South Korea, and the government will continue to take action to address this problem.

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Crypto Staking in South Korea: Balancing Innovation and Regulation

by Blockchain News

The examination into crypto staking services supplied by South Korean exchanges that was conducted by the Financial Supervisory Service (FSS) has brought to light the difficulty of striking a balance between innovation and regulation in the quickly developing cryptocurrency market. Even while staking has become a popular method for investors to make passive income on their cryptocurrency holdings, authorities are worried about the possible threats that might be posed to consumers as well as the stability of the market.

The question of whether or not “staking” may be legally understood as a type of trading in “securities” is one of the most important questions for regulators to answer. Domestic exchanges have asserted that they do not use customer funds to pay out staking earnings and that they keep exchanges’ own tokens separate from those belonging to customers. However, regulators want to make sure that customers are fully informed about the risks that are involved in using domestic exchanges.

On the other hand, there is a possibility that restrictions that are too onerous would hinder innovation and cause enterprises that are tied to cryptocurrencies to leave South Korea. The nation is home to a burgeoning cryptocurrency economy, as seen by the presence of a number of cryptocurrency exchanges and blockchain firms. These businesses have been essential in South Korea’s job creation and economic expansion, and government authorities will need to carefully evaluate the effects that any new restrictions would have on this industry before imposing such regulations.

The creation of a regulatory sandbox for crypto staking, which would allow for the testing of new goods and services by businesses in a regulated setting, is one of the possible solutions to this problem. This would make it possible for authorities to monitor the risks involved with staking, making it possible for them to safeguard consumers while still encouraging innovation in the area.

The continuing expansion and prosperity of South Korea’s cryptocurrency economy will ultimately depend on the country’s ability to strike the appropriate balance between decentralized innovation and government oversight. In this fast developing industry, it is essential to foster an environment conducive to entrepreneurial endeavors as well as innovation. This goes hand in hand with the need to safeguard consumers and preserve market equilibrium.

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South Korea Regulator Probes Crypto Staking Services

by Blockchain News

The Financial Supervisory Service (FSS) of South Korea has begun an inquiry into the cryptocurrency staking services provided by local exchanges such as Upbit, Bithumb, Korbit, and Coinone. The regulator has sought data from these exchanges that is connected to staking, which has led to worries over the possibility of new laws that are related to staking. On the other hand, a spokeswoman for the FSS has indicated that there are not presently any plans to completely prohibit domestic stakestaking.

Following a similar step by US authorities, which only recently initiated a legal fight against stake providers, the FSS has opened an investigation into the matter. The Chief Executive Officer of Coinbase, Brian Armstrong, has made the assertion that the Securities and Exchange Commission of the United States (SEC) is attempting to “get rid of crypto staking in the US.” The Financial Stability Service (FSS) has responded to this by stating that it wants to make certain that domestic staking providers adhere to the letter of the legislation.

Despite the fact that South Korean exchanges have asserted that they do not use customer funds to pay out staking earnings and that they store the exchanges’ own tokens in a separate location from the tokens that belong to customers, South Korean regulators are interested in finding an answer to the question of whether or not staking services can be legally construed as a form of “security” trading.

The result of legal disputes in South Korea might be affected by further developments in the United States over the question of whether or not some cryptocurrencies can be considered securities. The latest action taken by the SEC against Terraform Labs and its CEO Do Kwon is being hailed as a “good step” by the prosecuting authorities in South Korea. The SEC has leveled allegations of “securities” breaches against Kwon and other corporate leaders, and the agency is now waiting for a response from the US judicial system.

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Kimchi premium refers to when the price of BTC cheaper

by Blockchain News

The “Kimchi premium” in South Korea has switched back to a discount, which means that it is again possible to acquire cryptocurrencies such as Bitcoin at a lower price on exchanges located in South Korea.

Kimchi, a traditional food from Korea, inspired the naming of this occurrence. The term “Kimchi premium” refers to the phenomenon in which the price of Bitcoin (BTC) trades at a premium on exchanges located in South Korea relative to prices found on other marketplaces.

The data that was provided by the blockchain analytics service CryptoQuant indicates that between February 17 and 19, the Korea Premium index fluctuated within a range of -0.24 and 0.01 points.

CoinMarketCap said that BTC was trading at $24,464 on Coinbase and $24,487 on Binance at the time this article was written.

In contrast, the price was quoted at $24,386 on the Korean market Bithumb, while the price at which Bitcoin was being traded on Upbit, one of the main exchanges in South Korea, was $24,405.

The scenario is the same for the cryptocurrency with the second-largest market capitalization, Ether (ETH).

At the time this article was written, the statistics on CoinMarketCap revealed that ETH was trading for $1,687 on Coinbase and $1,691 on Binance. On Bithumb and Upbit, however, ETH was changing hands for $1,682 and $1,683, respectively.

According to Doo Wan Nam, chief operating officer of node validator and venture capital firm Stablenode, the change from a premium to a discount for kimchi reflects a decrease in interest from retail investors in Korea.

“Generally speaking, it signals a dip in interest in cryptocurrency from the retail sector in Korea,” he added. “This is paradoxically a better time to purchase since you know you can always sell yours to Korean gamblers for 20% premium later when they FOMO.”

Arbitrage refers to the process wherein some traders attempt to make a profit by trading the price disparities that exist between several exchanges.

In the past, the extent of the Kimchi premium has been linked to the news, with large drops in price reported at periods when negative news about South Korean cryptocurrency exchanges broke.

The premium vanished in the beginning of 2018, shortly after the government of South Korea stated its intention to take regulatory action against cryptocurrency trading.

According to research published by the University of Calgary in 2019, the Kimchi Premium emerged for the first time in 2016.

According to the findings of the study, throughout the period beginning in January 2016 and ending in February 2018, Bitcoin exchanges in South Korea charged an average of 4.73% more than their counterparts in the United States.

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Kimchi premium refers to when the price of BTC cheaper

by Blockchain News

The “Kimchi premium” in South Korea has switched back to a discount, which means that it is again possible to acquire cryptocurrencies such as Bitcoin at a lower price on exchanges located in South Korea.

Kimchi, a traditional food from Korea, inspired the naming of this occurrence. The term “Kimchi premium” refers to the phenomenon in which the price of Bitcoin (BTC) trades at a premium on exchanges located in South Korea relative to prices found on other marketplaces.

The data that was provided by the blockchain analytics service CryptoQuant indicates that between February 17 and 19, the Korea Premium index fluctuated within a range of -0.24 and 0.01 points.

CoinMarketCap said that BTC was trading at $24,464 on Coinbase and $24,487 on Binance at the time this article was written.

In contrast, the price was quoted at $24,386 on the Korean market Bithumb, while the price at which Bitcoin was being traded on Upbit, one of the main exchanges in South Korea, was $24,405.

The scenario is the same for the cryptocurrency with the second-largest market capitalization, Ether (ETH).

At the time this article was written, the statistics on CoinMarketCap revealed that ETH was trading for $1,687 on Coinbase and $1,691 on Binance. On Bithumb and Upbit, however, ETH was changing hands for $1,682 and $1,683, respectively.

According to Doo Wan Nam, chief operating officer of node validator and venture capital firm Stablenode, the change from a premium to a discount for kimchi reflects a decrease in interest from retail investors in Korea.

“Generally speaking, it signals a dip in interest in cryptocurrency from the retail sector in Korea,” he added. “This is paradoxically a better time to purchase since you know you can always sell yours to Korean gamblers for 20% premium later when they FOMO.”

Arbitrage refers to the process wherein some traders attempt to make a profit by trading the price disparities that exist between several exchanges.

In the past, the extent of the Kimchi premium has been linked to the news, with large drops in price reported at periods when negative news about South Korean cryptocurrency exchanges broke.

The premium vanished in the beginning of 2018, shortly after the government of South Korea stated its intention to take regulatory action against cryptocurrency trading.

According to research published by the University of Calgary in 2019, the Kimchi Premium emerged for the first time in 2016.

According to the findings of the study, throughout the period beginning in January 2016 and ending in February 2018, Bitcoin exchanges in South Korea charged an average of 4.73% more than their counterparts in the United States.

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Former Tmon CEO faces arrest for taking bribes to promote Terra Classic

by Blockchain News

After the former CEO of Tmon, a Korean e-commerce platform, was accused of taking billions of won worth of Terra (LUNA), which is now known as Terra Classic (LUNC), in exchange for promoting Terra as a straightforward payment gateway, prosecutors in South Korea have asked for an arrest warrant to be issued for the individual.

According to a report by the Dong-A Ilbo media outlet, the head of the financial and securities joint investigation team at the Seoul Southern District Prosecutor’s Office requested an arrest warrant for bribery charges to be brought against the former CEO of Tmon, referred to as “Mr. A,” as well as a person referred to as “broker B,” who worked on lobbying in the financial sector in favor of Terra.

According to the allegations, Mr. A was given LUNC tokens by Shin Hyun-Seong, who is also known as Daniel Shin, the co-founder of Terra. Shin urged Mr. A to actively promote Terra as a straightforward method of payment. Following this event, Tmon began promoting LUNC and spreading the word that the token is a reliable investment. The investigators believe that the advertising were responsible for the price growth of the token since they raised the expectations of investors.

It is speculated that the former CEO of Tmon has profited billions of won from the sale of the LUNC tokens that were obtained in return for the marketing. In addition, the investigation emphasized that in spite of warnings from financial regulators, Shin has apparently contributed money to other businesses such as Tmon to promote LUNC as a secure payment mechanism. This was one of the points that was underlined in the research.

On November 14, prosecutors in South Korea made an official request for Shin to assist with the investigation into the collapse of the Terra. The police said that Shin had been in possession of LUNC tokens without the knowledge of the investors and had made illicit transactions totaling more than 105 million dollars prior to the collapse of the firm.

The prosecutors who are in charge of the case have been continually broadening the scope of their investigations and focusing their attention on additional individuals implicated. On the 30th of November in the year 2022, the authorities in South Korea issued an arrest order for Shin, along with three investors in Terra and four engineers responsible for the project.

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South Korean Officials Confirm They Sent Team to Serbia to Find Do Kwon

by Blockchain News

Do Kwon, the controversial inventor of the now-defunct Terra ecosystem, is the subject of an escalated manhunt, with reports indicating that South Korean authorities have confirmed they have dispatched at least two personnel to Serbia in an effort to locate him.

According to a story that was published on the 7th of February by Bloomberg, the prosecutor’s office in Seoul said that the rumors “aren’t fake” about members of its team venturing out to the Balkan state in order to locate Kwon.

It would seem that at least two state officials traveled, one from the office of the prosecutor, and the other from the Ministry of Justice in South Korea.

Chosun Media, a magazine located in South Korea, said on December 11 that they had been notified by a state intelligence officer that Kwon had established a base of operations in Serbia.

There is no extradition treaty in place between South Korea and Serbia at the present time.

According to a recent opinion post written by Minso Kim for the Chosun Media outlet in South Korea, Kwon most likely found Serbia to be an excellent place to hide out as a result of the factors described above.

Kwon, however, has had his passport revoked by South Korea, which may make it more difficult for him to travel in the future.

Since South Korean prosecutors filed an arrest order against Kwon on September 14, he has been suspected of evading capture ever since. Kwon has rejected the allegations made against him throughout the month of October.

The failed entrepreneur, who is now 31 years old, has also been charged of violating regulations governing capital markets.

It is well knowledge that Kwon is a frequent tweeter; yet, he spent over two months without tweeting or retweeting a single message, which has led some people to wonder what the controversial figure has been up to in that time.

However, Kwon recently gave a response to an accusatory tweet that was directed at him, in which he said that he has never taken anybody else’s money and has never participated in any “hidden cashouts.”

Kwon has, up to this point, denied any misconduct.

The de-peg of the algorithmic stablecoin known as TerraClassicUSD (USTC), which caused the collapse of the Terra ecosystem, was one of the contributing factors. Terra Classic (LUNC) was intimately connected to the stablecoin, with the latter also approaching 100% of its value.

There was an estimated loss of value of sixty billion dollars brought on by the environment.

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South Korea Establishes Guidance for Regulating Digital Assets as Securities

by Blockchain News

South Korea has issued guidelines that specify the categories of digital assets that will be treated as securities in the nation and subject to the country’s securities regulations.

The Financial Services Commission (FSC) noted in a press statement that digital assets that fulfil the criteria provided forth in the country’s Capital Markets Legislation would be recognised as securities. These qualities may be found in the act itself.

According to the legislation, securities are considered to be forms of investments in the financial market in which the purchaser does not need to make any extra payments after the first investment. In addition, the FSC presented several examples of the kind of digital assets that are most likely going to be categorised as securities. According to the Financial Stability Commission (FSC), this may include tokens that offer investors with a return, grant holders rights to dividends or residual assets, or give holders a stake in the operations of the firm.

Under the provisions of the country’s Capital Markets Law, virtual currencies that meet the criteria for classification as securities tokens will be subject to regulation. In the meanwhile, new rules will control digital assets that do not have the characteristics of securities and will apply to such digital assets.

Token issuers and brokers, such as cryptocurrency exchanges, will be responsible for determining whether cryptocurrencies will be categorised as securities based on the legislation, as stated by the FSC. Additionally, the regulatory body emphasised that a case-by-case analysis will be performed.

The financial authority also underlined that the new guideline is part of preparations for the legalisation, issuance, and distribution of security tokens inside the nation. This was mentioned in the previous sentence.

The cryptocurrency ecosystem has seen significant participation from South Korea. The city of Busan announced its intentions to create a decentralised digital commodities market on January 19th. Officials from the government have said that this year would mark the beginning of the platform’s activities.

In addition to this, the Ministry of Justice of the nation has plans to implement a monitoring system for cryptocurrency. The government of South Korea announced on the 29th of January that it will implement a monitoring system in an attempt to prevent efforts to launder money and to reclaim cash that are tied to illegal activity.

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Binance Acquires Majority Stake in Gopax

by Blockchain News

Through its recent purchase of the South Korean cryptocurrency trading platform Gopax, the major cryptocurrency exchange Binance is making its way back to South Korea.

Binance has reentered the South Korean market after leaving it two years ago, according to an announcement made by the business on February 3, stating that it has purchased a controlling position in Gopax, which is funded by Digital Currency Group. The financing for the deal was provided by a finance-initiated investment initiative called as the Industry Recovery Initiative, to which Binance committed an amount equal to one billion dollars.

Binance, according to the CEO of the company, Changpeng Zhao, is not only responsible for safeguarding cryptocurrency consumers, but also the cryptocurrency industry as a whole. “The Industry Recovery Initiative was established in order to provide help to promising businesses that were knocked back as a result of the happenings of the previous year. We have high hopes that taking this step with GOPAX will contribute to the further revitalization of the blockchain and cryptocurrency industries in Korea,” he said.

According to reports, Binance Chief Business Officer Yibo Ling said that the company has bought a “significant” stock holding at Gopax. However, Ling did not disclose the specifics of the transaction. Previous reports stated that Binance bought a 41% interest from Gopax’s main shareholder, Lee Jun-hang, despite the fact that the transaction was initially scheduled to be revealed a year ago.

After Gopax temporarily suspended withdrawals from some products in November 2022 in response to the collapse of the FTX exchange, the transaction was finalised a few months later.

As a response to problems encountered by the crypto lending company Genesis Global Capital, which has now gone out of business, Gopax has suspended the withdrawal of principal and interest payments via its decentralised finance (DeFi) service GoFi. According to reports, before to filing for bankruptcy, Genesis was Gopax’s second biggest stakeholder and a crucial commercial partner, contributing its GoFi product.

Binance intends to invest the newly acquired funds into the Gopax exchange in order to facilitate client withdrawals and interest payments for GoFi after the completion of the transaction. In addition to promoting crypto education, the programme intends to foster close engagement with the authorities in South Korea and the players in virtual asset markets.

According to what Ling had to say about the matter, “the essential aim of this arrangement was to help clients and make sure that any customers who wish to withdraw their assets have the chance to do so.”

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