Korean Police Establishes Task Force to Tackle Virtual Asset-Related Crimes

Japan is moving aggressively to cement its status as a global hub for digital assets. A decisive election victory for the ruling party has cleared the legislative runway for sweeping crypto tax reforms, while the country's largest financial institutions are simultaneously preparing to test blockchain-based securities trading. For global investors, these developments signal a deepening integration of blockchain technology into Japan's traditional financial infrastructure.Photo by PJH on UnsplashElection win seen as pro-cryptoPrime Minister Sanae Takaichi’s Liberal Democratic Party secured a majority in the recent general election. According to local media outlet CoinPost, the digital asset industry views this political stability as a positive signal, as pro-crypto initiatives such as a tax overhaul might otherwise have faced legislative obstacles. Currently, crypto profits in Japan are classified as miscellaneous income and taxed at punitive rates of up to 55%. Under the proposed framework, digital assets would be reclassified under the Financial Instruments and Exchange Act and become subject to a flat 20% capital gains tax, bringing them in line with traditional equity investments. However, officials have noted that full implementation will require a preparation period of approximately two years to ensure exchanges and self-regulatory organizations can fully adapt to the new legal framework. Additionally, Prime Minister Takaichi’s expansionary fiscal policies are expected to drive risk-on market sentiment. For foreign investors, any potential yen depreciation resulting from these macroeconomic policies could inflate yen-denominated crypto prices, creating unique arbitrage opportunities. Brokerages pilot blockchain tradingSeparately, according to a Nikkei report, Japan’s top brokerages—Nomura and Daiwa—are partnering with the nation’s three megabanks (Mitsubishi UFJ Financial Group, Sumitomo Mitsui, and Mizuho) to launch a blockchain-based securities trading platform, in a bid to modernize the country’s capital markets. The project will allow investors to buy and sell stocks, government and corporate bonds, and mutual funds using fiat-pegged stablecoins. The pilot is slated to begin this month, with a commercial rollout targeted for the coming years. This stablecoin initiative bypasses traditional exchange hours, enabling continuous trading and real-time settlement. While the U.S. recently transitioned to a next-day settlement cycle, moving to instant blockchain settlement would allow Japan to leapfrog Western markets and eliminate time-zone friction for foreign capital. The move aligns with a broader push by Japanese corporate giants to utilize stablecoins for both wholesale and retail transactions. Regulators tighten cybersecurityIn a more recent report, CoinPost noted that the Financial Services Agency has drafted new guidelines aimed at upgrading the cybersecurity posture of domestic crypto exchanges, as part of efforts to safeguard Japan’s rapidly expanding digital economy. The regulator cited a shift in the global threat landscape, warning that cold wallets alone are no longer sufficient against recent cryptocurrency breaches, which have involved hackers using sophisticated social engineering tactics and third-party partners as entry points for attacks. The proposed defense strategy centers on more rigorous security requirements, enhanced industry collaboration, and government-led stress testing. By year-end, all virtual asset service providers will be required to conduct formal cybersecurity self-assessments, while facing stricter regulatory scrutiny of third-party audits and security personnel. Additionally, regulators plan to conduct real-world penetration testing on select firms and share the findings across the sector to strengthen security overall. 

South Korea’s GDAC Suffers $13M hackSouth Korean cryptocurrency exchange, GDAC, has suffered a significant hacking incident that has resulted in the loss of approximately 23% of its custodial digital assets.©Pexels/PixabayThe hack occurred on Sunday when some of the exchange’s hot wallets were breached, and the stolen assets were transferred to an unidentified wallet. GDAC reported the incident on Monday and disclosed that the exchange lost over $13.1 million in Bitcoin, Ether, Wemix, and USDT, with more than $10 million in Wemix.According to blockchain analytics firm Arkham Intelligence, the hacker has since swapped the USDT for ETH, sending 461 ETH to cryptocurrency tumbler, Tornado Cash. The hacker used three separate wallets to take funds from two of the exchange’s hot wallets. Arkham has labeled the wallets as follows:GDAC Hacker 1: 0x244615D99684175d31369332039b2D84ce925EC5GDAC Hacker 2: 0x62B5eb2cb925Ce2898f9327B235b3228e7Cac1C2GDAC Hacker 3: 0x87597bDB421482190e223aCa0A4DEAd75AB0a98DGDAC deposits/withdrawals suspendedGDAC has suspended its withdrawal and deposit services and reported the incident to the Korea Internet and Security Agency and the Financial Intelligence Unit. The exchange has also requested other cryptocurrency exchanges to block incoming transactions from suspicious addresses.In a notice posted on its website, GDAC CEO Seunghwan Han apologized for the suspension of deposits/withdrawals and concern relative to the hack, adding that the firm will be working towards investor protection and safe withdrawal of funds in due course. GDAC also posted the breakdown of the digital asset quantities lost in the hack, with the hacker stealing 60.80 BTC, 350.5 ETH, 10,000 WEMIX and 220,000 USDT.Crypto hacks increasingThis hacking incident comes at a time when cryptocurrency hacks have been on the rise. According to blockchain analytics firm Chainalysis, illicit actors stole $3.8 billion worth of assets last year, the largest one-year loss in crypto’s history. In addition, other crypto platforms have also suffered notable hacks and exploits in the past 15 to 18 months. Axie Infinity’s Ronin bridge, for example, suffered a $625 million hack last year, and decentralized-finance protocol Sushi was exploited for $3.3 million on Sunday.GDAC is not the only South Korean cryptocurrency exchange to suffer a significant hacking incident. In 2018, Coinrail was hacked, resulting in the loss of approximately $40 million worth of assets, and in 2021, Upbit suffered a $50 million hack.In response to these incidents, South Korea has taken steps to tighten regulations around cryptocurrency exchanges. In March 2021, the country’s Financial Services Commission issued a revised regulation that requires cryptocurrency exchanges to maintain stricter anti-money laundering measures and report suspicious transactions.The GDAC hack is a stark reminder of the risks associated with cryptocurrency investing and the importance of implementing robust security measures. Investors and cryptocurrency exchanges should take note of this incident and ensure that they have adequate security measures in place to protect against potential hacks and exploits.

WOO Network Repurchases Shares in 3AC SettlementWOO Network, a Taiwan-based liquidity provider, has reached a settlement with Teneo, the liquidator of bankrupt Singapore hedge fund Three Arrows Capital (3AC).The settlement involves the repurchase of shares and tokens acquired by 3AC during WOO’s Series A fundraising round in November 2021. This resolution brings finality to 3AC's contentious involvement with the Taiwanese firm.Photo by Joss Woodhead on UnsplashClosing out 3AC involvementOn Wednesday WOO announced the share and token repurchase via a blog post published to its website, signaling the resolution of its dealings with Three Arrows Capital and, consequently, bringing an end to the uncertainties that had enveloped their partnership.In addition to this, a total of 20 million WOO tokens, valued at over $3 million, were repurchased and sent to a burn address to ensure they couldn’t be accessed by anyone. 3AC had not only acquired equity but also 25 million WOO tokens, with the remaining set to vest over the next 12 months.Jack Tan, Co-Founder of WOO Network, emphasized the significance of resolving the 3AC-related issues. Tan commended the proactive collaboration with liquidators to secure a fair agreement for repurchasing their shares, along with vested and vesting tokens, from 3AC’s estate. Tan also welcomed the opportunity to move on from the 3AC entanglement, stating:“The past 18 months have seen a concentration of bad news hit our industry from large-scale failures to more overzealous regulators. A thorough cleansing of the system has taken place and we are looking forward to rebuilding with our partners and team.”Equally WOO Network community members are happy with the outcome, with one stating on X (formerly Twitter): “This is a huge win for the project and its community.”By repurchasing these shares and tokens, WOO Network has effectively severed its ties with 3AC and its creditors, paving the way for a more focused growth trajectory in the upcoming year. Jack Tan observed that the cryptocurrency industry has faced an influx of adverse developments in recent times, including significant failures and heightened regulatory scrutiny. He emphasized that a comprehensive restructuring of the system has occurred and expressed optimism about the future, looking forward to rebuilding alongside their partners and team.In light of these recent developments, WOO Network is poised to move forward with renewed vigor, leaving behind the tumultuous period of the 3AC fallout. This strategic resolution not only ensures a fair and equitable outcome for shareholders but also heralds a promising future for WOO Network in the ever-evolving world of cryptocurrency.According to data from CoinGecko at the time of publication, the WOO Network token price experienced an increase of 1.45% over the past 24 hours, settling at $0.1709, with its trading volume increasing by 2.8% to $8.79 million. However, over the past 30 days, the crypto token has recorded gains of nearly 10.8%, indicating resilience and a positive outlook as it navigates the evolving landscape of the digital asset market.This development, along with the cryptocurrency’s recent performance, underscores the potential for growth and renewed promise within the WOO Network ecosystem. More clarity has been brought to the future of the business as a consequence of bringing finality to this contentious issue.