Category: Blockchain - dongwonkwak

Korean Virtual Asset Exchange, Real Name Account Issuance Countdown

3/29/2021

With the revised Korean Specific Financial Information Act (SFIA) that regulates virtual asset providers in effect on the March 25th, exchanges that have not yet issued real-name confirmation deposit and withdrawal accounts from banks have started to prevent customer churn.

According to industry sources on the March 29th, virtual asset exchanges such as Gopax and Gdak started a real-name account pre-booking event. If a real-name account is issued from a bank in the future, the main point is to give benefits to users who have reserved the account linkage in advance.

According to the Special Financial Information Act, virtual asset exchanges wishing to provide KRW deposit/withdrawal service must obtain a real name account from a bank and report it to the Korean Financial Information Analysis Unit (KoFIU). The deadline for reporting is until September 24th, when the six-month grace period ends.

If a real-name account cannot be issued, only other requirements such as ISMS (Information Security Management System) certification are met, and the KRW deposit/withdrawal service can be abandoned. However, if the KRW deposit/withdrawal is not provided, the market competitiveness is lowered, so most exchanges are in a position to obtain a real name account before the reporting deadline.

The problem is that before issuance, a customer can leave to another exchange. Currently, there are four exchanges in the market that have partnered with banks such as Bithumb, Upbit, Coinone, and Korbit. Accordingly, exchanges that do not yet have real-name accounts decided to hold pre-booking events to prevent customer churn.

Gopax is holding an event that gives a total of 2,000 won worth of bitcoin (BTC) through a lottery to 106 pre-bookers until April 19th. In addition, if a real-name account is issued in the future, coffee gifticon will be paid to all members who linked the account after pre-booking.

An official at Gopax said, “This is to show our customers our will to issue an account. We emphasize the fact that real-name accounts can be issued before the reporting deadline, and we want to prevent customer churn.”

Earlier, it was reported that Gopax is discussing issuing a real name account with BNK Busan Bank. However, in this regard, it was known that the contract was not in progress, only the account linkage test was conducted.

Gdak will hold similar events until April 23rd. It is an event that presents 10,000 won worth of bitcoin (BTC) to 1,000 customers who have previously applied for account linkage through a lottery.

Gdak said, "Applicants for pre-reservation for real-name accounts can receive the fastest news of the account service provision." He then emphasized that it had already met other requirements besides real-name account, saying, “Both exchanges and custodial services have completed information protection management system (ISMS) certification.”

So account real name issue is more important than before for digital asset exchanges.

Korean Bitcoin Kimchi Premium, 5 Million Won More Expensive Than U.S.

3/28/2021

The so-called 'Kimchi Premium (KIMP)' phenomenon in which the price of domestic virtual assets is higher than that of overseas is rising again. Until the beginning of this year, the 'Reverse Premium' of which foreign transaction prices were higher than the domestic price continued, but the recent enthusiasm for investing in domestic virtual assets is heating up and there are signs that Kimchi Premium is intensifying.

The virtual asset industry said, "As domestic individual investors are buying a lot of virtual assets, the supply is not keeping up with the demand." He diagnosed that the amount of coins in the exchange itself is decreasing.

The Kimchi Premium phenomenon, in which the price of domestic virtual assets is traded higher than that of overseas, has recently emerged prominently.

Kimchi Premium can also be interpreted as meaning that Korean investors will buy virtual assets at higher prices than the global market price. For this reason, when the Kimchi Premium phenomenon occurs, general investors who buy virtual assets in Korean won in Korean virtual asset exchanges may be at a disadvantage.

As of the afternoon of the 25th, bitcoin (BTC) is being traded in the range of 64.6 to 64.7 million won on the four major domestic virtual asset exchanges, including Bithumb, Upbit, Coinone, and Korbit. On the other hand, the Bitcoin price of Binance and Bitfinex is formed at 59.7 million won. This means that up to 5 million won of bitcoin living in Korea is more expensive.

Along with Bitcoin, Ethereum (ETH), another virtual asset leader, also has a kimchi premium of 8% as of the 25th. The Ethereum transaction price of all four domestic exchanges is around 1.95 million won, while the Ethereum price of foreign virtual asset exchanges such as Binance and Bitfinex is only 1.8 million won.

Until the beginning of this year, there was a reverse premium for foreign virtual asset transaction prices. This is because, as U.S. listed companies and conglomerates announced their bitcoin investments and business successively from the end of last year, the buying trend of bitcoin by institutions centered in North America was remarkable. An industry official diagnosed, "Since last year, the trend of selling bitcoin in the Asian market and buying bitcoin in the North American market has continued."

Given the high demand for bitcoin acquisition in the overseas virtual asset market, some domestic investors have also earned market profits by sending bitcoins to foreign virtual asset exchange wallets to trade.

However, as the domestic stock market was sluggish this month, the flow of funds from the stock market to the virtual asset market was detected. KOSPI, which had an average transaction value of 26 trillion 4,778 billion on January of this year, decreased by more than 40% to 15,204.7 billion this month. On the other hand, the average daily trading value of Upbit jumped from 1 trillion won to 10 trillion won during the same period.

An official from a virtual asset exchange said, "Last year, global conglomerates led the price increase, and until the bitcoin price soared, there was no significant change in the domestic market." The transaction volume itself has increased significantly,” he explained.

There is also an analysis that the convenience of domestic virtual asset trading compared to other countries played a part in the Kimchi Premium phenomenon. An official from a virtual asset financial company said, "The Korean exchange's KRW trading system is much more convenient than the foreign exchange's legal currency trading," and said, "In this environment, Kimchi Premium is being formed as many individual investors are buying virtual assets.

Korean Special Information Act Law Enforcement, Points to Note for Virtual Asset Investors

3/17/2021

As the amendment bill of the Specific Financial Information Act (Special Act) that regulates virtual asset business operators is being implemented from the March 25th, attention is also focused on whether there are any points that general investors should pay attention to.

The Korean Financial Services Commission announced at a state council meeting on the 16th that the revised bill for the enforcement ordinance of the special money law was decided. The amendment to the enforcement decree specifically stipulates the matters entrusted by the decree regarding the obligation to prevent money laundering (AML) of virtual asset providers.

First of all, the scope of virtual asset providers became clear. This includes exchanges, custodial (trusted) companies, and wallet companies. This is not the case when simply providing a P2P (person-to-person) trading platform or a wallet platform without fees.

Virtual asset business operators must report to the Korean Financial Information Unit (KoFIU) and operate by September 24th, when the grace period ends. At this time, there are requirements for acceptance of the report.

In the case of exchanges, it is necessary to secure information protection management system (ISMS) certification, and to secure a real name confirmation deposit and withdrawal account from a bank to support the deposit and withdrawal service in won. The obligation to prevent money laundering, such as customer verification, reporting of suspicious transactions, and actions taken by virtual asset providers, must also be fulfilled, but violations are subject to supervision after acceptance of the report.

The factor that most affects investors in the special money law is whether the exchange continues to operate. Currently, there are only four exchanges that have received real name confirmation deposit and withdrawal accounts from banks: Bithumb, Upbit, Coinone, and Korbit. Exchanges that use a so-called honeycomb account (a corporate account of an exchange) other than a real-name account must report business with a real-name account by 24th September, the deadline for reporting.

After the filing deadline, we cannot provide KRW deposit/withdrawal service to a honeycomb account. If the KRW deposit/withdrawal is not provided, the market competitiveness is deteriorated, so some exchanges may give up reporting and fail.

Investors should be careful not to suffer damages related to this. The Korean Financial Services Commission said, "We hope that you should check the status of reporting by existing business operators (exchanges) and whether or not the business continues, and make virtual asset transactions.

One more thing to note is that the virtual asset business operator who has not received the report collects the resident registration number. The KoFIU recommends that existing virtual asset business owners perform the customer verification obligation (residence registration number verification) under the Special Act after acceptance of the report.

Therefore, when a business operator (exchange) that has not received a report collects a resident registration number, it is necessary to check the information management status of the business operator and whether the business continues.

In addition to monitoring the business continuity of virtual asset providers such as exchanges, there are points that need to be prepared in practice. Industry insiders said that investment should be avoided for virtual assets that are “only listed” on certain exchanges.

As the virtual asset market is booming in recent years, some exchanges are accelerating listing. In particular, if a promising virtual asset is listed alone, it is advantageous in terms of exchange revenue because it can secure initial transaction volume. As a result, many exchanges are promoting the brand by proposing 'single listing'.

However, with the enforcement of this special law, it has become difficult to predict whether the exchange will continue to operate. If you have a large amount of virtual assets listed on an exchange that is scheduled to close, if the exchange closes, there will be no place to trade the virtual assets. Since you cannot transfer money to other exchanges, you will in fact suffer money loss.

An official in the domestic virtual asset industry said, "After the enforcement of the Special Act, investors should pay special attention to coins listed solely on specific exchanges. It is possible that the exchange will cease to operate."

"Also During the grace period after the enforcement of the Special Act, it is recommended to look at virtual assets that are listed on various exchanges and have rich liquidity."

Upbit Daily Transaction Amount Exceeded 10 Trillion Won

2/21/2021

On the 19th, the daily trading value of the Upbit (www.upbit.com) won market exceeded 10 trillion won. The most traded stock on this day was BORA, which traded over 2 trillion won in the last 24 hours, and the daily increase rate recorded 433%. Paycoin, which increased 25 times in the day before, was traded at 1.4 trillion won on Upbit that day, and plummeted 46.41%.

As the market overheated, the interest in Upbit virtual assets on the 19th also jumped by nearly 50% from the previous day. In particular, as funds were concentrated in altcoins, the Upbit Altcoin Index (UBAI) rose by more than 5% from the previous day, and the Upbit Market Index (UBMI) index, which was aggregated based on the entire market, also rose by 2%.

On this day, the top 10 virtual assets in the Upbit increase rate included a large number of domestic blockchain projects. Bora, MediBloc (MED), Sentinel Protocol (UPP), and Something (SSX) ranked in the top 5 in order, followed by MVL, Metadium, and HUNT.

On the 19th, the interest in Upbit virtual assets jumped 49.74% from the previous day.

Meanwhile, on the afternoon of the 19th, the bitcoin price is 57.8 million won, which is similar to the previous day, and Ethereum (ETH) is also showing a flat trend at 2.14 million won.

According to the data, Korean cryptocurrency market size is growing rapidly now.

Korean Cryptocurrency Exchange Listing Fraud Rises, Bithumb said "will respond strongly"

2/14/2021

Bithumb (www.bithumb.com), a virtual asset exchange, is aggressively responding to illegal listed brokers.

On the 9th February, Bithumb announced that it will strongly respond to illegal brokers who pretend to be exchanges and steal high listing fees. This is because brokers who are acting as bait for listing by impersonating Bithumb executives and employees have recently tried to gain attention.

Bithumb said that it is calling particular attention to the blockchain project and receiving reports of broker illegal activities. If the broker's illegal activity is confirmed, it plans to take legal action immediately.

Illegal brokers mainly act by impersonating an exchange employee or using an email address similar to the official email address of the exchange. According to a report recently received by Bithumb, they said that they were in charge of the major departments of Bithumb and discussed the project they wanted to list. In addition, they requested fees, such as a deposit for listing, using an email address that counterfeit Bithumb's official email.

In response, Bithumb announced that it only applies for listing and discusses via official e-mail, and does not negotiate listing through SNS such as Telegram and LinkedIn. Also, if an email is received through an official email account, it is requested that the sender be sure to send a reply email to check whether the sender is correct or not.

An official from Bithumb said, “Bithumb does not receive an application for listing through any channels other than official e-mail and does not require listing fees,” and said, “We must be cautious and pay special attention so as not to be harmed by negotiations on listing through informal channels.” He added, “If the circumstances of attempting an abnormal procedure through a broker, etc. are confirmed, penalties may be returned to the corresponding blockchain project.”

Bithumb compliance and related departments require a quick response for this fraud issue.

Lambda256 Makes Korean Digital Asset (NFT) Standard

2/13/2021

Lambda256, a blockchain service platform, will start developing a blockchain-based digital asset service with economical and scalable capabilities.

Lambda256 creates a service standard for non-fungible tokens (NFTs), which is one of the main characteristics of blockchain games, and plans to accelerate the commercialization of NFTs while eliminating the commission fees incurred when transactions are made on the blockchain.

On the 10th, Lambda 256 announced that it will cooperate with the blockchain game project Item Bus to create a domestic standard for NFT services. Item Bus is a blockchain game alliance launched by over 100 domestic game companies led by the Korea Mobile Game Association. The two companies plan to jointly develop the Korean NFT standard 'K-NFT (tentative name)' through this collaboration.

NFT is a tokenization of tangible assets such as game items and copyrights based on blockchain technology, and is based on ERC-721, the token issuance standard of the Ethereum platform.

However, as Ethereum's excessive fees and slow speed are considered as limitations of commercialization of NFTs, many blockchain companies are currently developing individual NFT standards for Ethereum.

Accordingly, Lambda256 and ItemVerse plan to provide solutions that meet the needs of the market, such as metadata storage and management, copyright management, and NFT division functions through K-NFT, which has improved the existing basic NFT. In addition, it plans to design so that it can have scalability that can respond to large-scale traffic by providing free fees incurred during block chain transactions.

K-NFT supports multi-chain development environments including Ethereum by using the bridge function provided by Lambda 256's Service as a Blockchain (BaaS). This allows companies that use the Ethereum-based NFT standard to switch to the new K-NFT without additional hassle.

The two companies plan to allow K-NFT to be applied not only to games, but also to mobile tickets used in performances and various events, and to various limited edition products. In addition, it also revealed that it will seek ways to create new profits through cooperation with domestic metaverse manufacturers.

Despite the effort, K-NFT will be settled successfully?

How Korean Custodial Company will use Deep Cold Storage Technology?

1/30/2021

Korea Digital Asset Trust (KDAC), a virtual asset custodial company invested by Shinhan Bank, utilizes the technology of a virtual asset financial company 'Bitgo'.

On the 28th, Bitgo announced that it has signed a business agreement with Shinhan Bank and KDAC to provide digital asset custodial services and develop solutions.

KDAC is a virtual asset custodial company co-founded by Korbit (www.korbit.co.kr), a virtual asset exchange, Blockchain, a blockchain specialist, and Fair Square Lab, a virtual asset research company. Shinhan Bank recently invested in KDAC to strengthen its virtual asset-related service capabilities.

Bitgo is a company that has been providing custodial services professionally so far, and is seeking technical cooperation related to KDAC's custodial service. Bitgo's subsidiary, Bitgo Trust, has been officially accredited by the Division of Banking in South Dakota.

In particular, Bitgo plans to provide its own technology, 'Deep Cold Storage', to the Korean market. Deep cold storage is a technology that creates and stores a key to access virtual assets in an offline environment not connected to the Internet. It also provides a directly managed custodial service using the technology.

Shinhan Bank Digital Innovation Director Kim Chul-ki said, “With this business agreement, we have secured the competitiveness of a custodial service that safely stores digital assets of institutional investors and customers that will be expanded in the future. We will continue to make models.”

KDAC CEO Kim Joon-hong said, “With this cooperation, KDAC will be able to contribute to safely shaping the Korean digital asset market. We will provide users with digital asset custodial services with the best security.”

Pete Najarian, Bitgo Chief Revenue Officer (CRO) said, "The Korean market is a very important market that Bitgo is paying attention to, and we will do our best to provide custodial solutions to build a reliable digital asset market." Revealed.

Korean blockchain-based electronic contract grows bigger.

1/11/2021

With the revision of the Act on Electronic Documents and Electronic Transactions in 2020, electronic documents also took effect, while blockchain-based electronic contract platforms are emerging one after another. Blockchain technology prevents forgery and alteration of electronic documents and automates contract procedures.

According to the blockchain industry on the 9th January, existing companies such as IT specialist Douzone (www.douzone.com) and Law Firm D'Lite (www.dlightlaw.com), as well as blockchain startups, are releasing blockchain-based electronic contract platforms one after another. Most of these platforms have focused on preventing forgery, falsification and hacking of the contents of the contract.

Douzone unveiled the blockchain-based electronic contract platform 'We-Ha-Go-One' at the Digital New Deal and Non-Face Contract Innovation seminar held online on the 8th. We Ha-Go-One is a platform selected as the '2020 Blockchain Private-led National Project' by the Ministry of Science and ICT, focusing on small business contracts.

Ho Cheol SONG, CEO of Douzone Platform Business Division, who presented the seminar, said, "In the non-face-to-face era, it is important to secure the reliability of contracts without meeting in person."

He also explained, "By adding a blockchain-based DID (decentralized identity authentication) technology, we made it easy for small businesses to authenticate and use." In the future, we plan to discover a new business model by allowing multiple stakeholders to participate in the blockchain network.

As contracts are one of the major legal acts, law firms have also developed an electronic contract platform and introduced blockchain technology. “Co-Make,” developed by law firm D'Lite, uses LINE blockchain to prevent forgery and alteration of contract contents, and encrypts and transmits the contents. D'Light, a law firm, has undergone an inspection process, and a mobile version of “Co-Make 2.0” has also been released.

Recently, Co-Make launched Link-Sign as a LINE blockchain-based DApp (Decentralized Application) and announced its entry into the Japanese market. Link-Sign is a localized (localized) version of Comake for the Japanese market, and is also a blockchain app used for electronic contracts.

In addition to existing companies, blockchain startups are also introducing electronic contract platforms one after another. FirmaChain has launched a blockchain-based electronic contract solution 'Duite.' and is providing services in web and mobile versions.

FirmaChain replaces not only electronic documents but also written documents with electronic documents and stores them on the blockchain platform. FirmaChain said, "The goal is to replace all existing document-based legal actions and electronic signatures with a blockchain and a transparent platform."

With the emergence of electronic contract platforms, technologies that verify the authenticity of electronic documents used in contracts are also expanding the scope of application. This can be done with the Blockchain-based Time Stamping Authority (TSA) method.

Timestamp, which is an essential element of TSA, means a string representing a specific time. On the blockchain, a timestamp acts as a kind of electronic seal with the function of ‘proof of existence’ that the electronic document existed at a certain point in time and ‘proof of content’ that the data has not been changed after that. Therefore, it is possible to verify that a certain electronic document is authentic and that the content is also genuine.

Blocko (www.blocko.io), a blockchain start-up company, has formed a ‘DTT Alliance’, an alliance that utilizes its own TSA technology, and is introducing TSA to several companies. If the TSA proves the authenticity of the electronic document, it is possible to make an electronic contract with the document.

Korean government, concrete taxation plan for cryptocurrencies such as Bitcoin Etc.

1/9/2021

Korean government will start taxing cryptocurrencies such as Bitcoin from January next year. Investors are required to pay 20% as tax on any excess income over 2.5 million won obtained from buying or selling cryptocurrency.

On the 6th, the Ministry of Strategy and Finance unveiled the '2020 Tax Law Amendment Follow-up Enforcement Decree Amendment', which includes details on the taxation of cryptocurrency. Through this revised bill, the government specified taxation measures for calculating the necessary expenses for cryptocurrency.

Taxable targets include profits obtained from the cryptocurrency trading process, profits from cryptocurrency rentals, and inherited cryptocurrencies. From January 1, 2022, those who earned profits from cryptocurrency must pay 20% of the profits exceeding 2.5 million won per year as other income tax.

Taxable income is the amount of total income minus necessary expenses (actual acquisition price, etc.). In this revised bill, the first-in, first-out method was introduced as a method of calculating the acquisition price when calculating necessary expenses. It is a method of calculating the necessary expenses, assuming that the cryptocurrency purchased first was transferred sequentially.

The taxation proceeds also on cryptocurrencies held before January 1 of next year, the time of taxation. The government introduced the concept of agenda acquisition price in the amendment. Accordingly, the acquisition price of cryptocurrencies held before January 1, 2022 is calculated as the larger of the market price at December 31, 2021 and actual acquisition price.

Here, the market price at the time of December 31, 2021 refers to the average of the prices announced by cryptocurrency exchanges at 00:00 on January 1, 2022. Among the exchanges designated by the Commissioner of the National Tax Service among exchanges that have completed reporting virtual asset business operators to the authorities in accordance with the SFIA (Specific Financial Information Act), the cryptocurrency price standards are disclosed daily.

In addition, the amendment specified the range of data that virtual asset providers must submit to impose income tax. From January 1, 2022, virtual asset providers are required to submit transaction specifications for each trader, including quarterly and yearly transaction details of exchange users.

In the case of non-residents and foreign corporations, the virtual asset business entity is taxed in a way that withholding the lesser of 20% of the cryptocurrency income or 10% of the payment amount. The amount of tax withheld by the non-resident was to be paid by the 10th of the month following the withdrawal date of KRW and cryptocurrency.

Earlier, the government planned to impose taxation on income generated from cryptocurrency from October this year. However, it was pointed out that the timing was too early when considering the schedule for accepting reports from virtual asset business operators due to the enforcement of the Special Financial Information Act, and the taxation period was postponed for three months.

TOMNTOMS Belated Coin Issuance will be Effective?

1/6/2021

TOMNTOMS (www.tomntoms.com), a coffee specialty store, issues a virtual asset 'TOMTOM Coin'. The idea is to use it as a payment method and customer rewards within TOMNTOMS.

Considering that the so-called 'Reverse ICO' which introduces virtual assets into existing services, was once popular, it is also evaluated as a rather late attempt. Unlike the unsuccessful precedents, it is pointed out that the number of applications should be increased as much as possible. They also need to find a good reason to use virtual assets rather than regular points.

◆Just a point? What the reason for using virtual assets?

TOMNTOMS announced that it will first introduce TOMTOM coin in the official application My Tom in the first half of this year. After using it for in-app payment, it plans to use it in offline stores and overseas stores in the future.

As the first-generation franchise café in Korea, it has a strong user base, so it is possible to secure virtual asset users as well. However, in order to do this, it seems necessary to inform users of the advantages of virtual asset payment.

In general, the biggest advantage of virtual asset payment is the reduction of fees. For other payment methods such as card payment, there is an intermediary that takes a fee in the middle, but there is no intermediary for payment using virtual assets and blockchain technology.

Other virtual asset payment services also have these advantages. Since there is little commission, it is advocating that it is a profit to the affiliated store, and it is taking a strategy to return the commission saved through discounts to users. Also, from the user's point of view, if a virtual asset used as a payment method is listed on the exchange, the asset can be used for both investment purposes and payment purposes.

Therefore, TOMNTOMS is also expected to present such technological advantages. It means that differentiation points of virtual assets must be obtained, which is different from the method of collecting store points and receiving discounts.

An official from TOMNTOMS said, "The potential value of the blockchain technology grafted to TOMTOM coin is high, and the range that can be utilized is expected to be wider." and said that he will highlight its technical advantages.

It is important to inform the advantages of using virtual assets, but it is also important to find out where to use TOMTOM coin. There have been cases in which companies such as Cyworld's Clink and Hanbit Soft's Bryllite have issued virtual assets based on existing services, but eventually failed because they could not find an appropriate place to use the token.

In addition, virtual assets that have secured usage already exist in the market. Major virtual assets such as Bitcoin (BTC) and Ethereum (ETH) are many payment applications or cards that support the coin. Visa card also supports the Bitcoin network, so you can pay at most stores. In addition, Crypto.com Coin (CRO) and Paycoin (PCI), which were released for payment services, are also actively expanding their use in Korea.

In comparison, TOMTOM Coin is a latecomer as a payment virtual asset. If the application is limited to TOMNTOMS, the scalability will inevitably decrease.

TOMNTOMS position is that it will provide other uses besides store payment. An official from TOMNTOMS said, "We will not use TOMTOM coin as a simple payment method, but as a utility token to form a consensus between customers, store owners, and headquarters."

Although he did not talk about the specific utilization plan, it is expected that TOMTOM Coin will be paid as a reward for the use of customer data, and the head office will use the data to enhance the service.

An official from TOMNTOMS said, "We are in the process of scrutinizing how to use TOMTOM Coin, and first, we will use it as a utility token for customers and headquarters to contribute to service improvement."