Taiwan to Restrict Offshore Non-Complaint Exchanges

Rising Cryptocurrency Arbitrage Transactions Raise Concerns in South KoreaThe number of arbitrage transactions between South Korean and foreign cryptocurrency exchanges has been experiencing a notable uptick, according to a report by local media outlet Maeil Business Newspaper.In recent developments, foreign actors engaging in price manipulation have been transferring substantial amounts of cryptocurrency assets to Korean exchanges, driving up prices. Subsequently, they transfer these tokens from Korean exchanges back to overseas platforms, capitalizing on the price discrepancies to generate profits.Photo by Maxim Hopman on UnsplashBithumb’s case in H1According to documents submitted to Kim Hee-gon, a member of the ruling political party People Power Party, on Monday, KRW 3.4 trillion ($2.6 billion) worth of tokens were moved from Bithumb, a leading Korean cryptocurrency exchange, to foreign trading platforms during the first half of this year. Although this figure marks a 40% decrease compared to H1 2022’s KRW 5.7 trillion, primarily due to the significant decline in token prices across the cryptocurrency market, it’s noteworthy that the number of transactions has seen a significant increase.Other exchangesGopax, another major exchange in the nation, recorded token outflows totaling KRW 12.3 billion. On the other hand, Upbit, Coinone, and Korbit, which are also prominent exchanges, declined to provide data due to reasons like confidentiality concerns. However, given that Upbit holds an 82.0% share of the Korean crypto market, nearly four times larger than Bithumb’s share (14.2%), it is suspected that the volume of tokens transferred from Upbit to foreign platforms would likely have followed a similar proportion.While the value of tokens sent from Bithumb to overseas operators saw a year-over-year decrease, the number of transactions surged to 231,302, nearly doubling the figure of H1 2022’s 124,048 transactions. The average transaction size was KRW 14.7 million.Even though the overall enthusiasm for cryptocurrencies might have cooled off since last year, the spike in the number of transactions suggests that there’s been a surge in arbitrage trading between Korea and foreign markets.Kimchi premiumEarlier this month, a significant transaction caught the eye of cryptocurrency market observers in South Korea. On September 1, crypto data analytics firm Arkham identified that 170,000 CyberConnect (CYBER) tokens were transferred to Bithumb from a crypto wallet thought to be owned by DWF Labs, a firm specializing in cryptocurrency trading and investment. The timing of the transaction coincides with a period during which the Kimchi premium for CYBER exceeded 100%. The Kimchi premium refers to the crypto price gap between Korean exchanges and their foreign counterparts.The complicating factor here is that DWF Labs is a foreign entity that is managed by a foreign team.The use of corporate accounts is virtually prohibited in the Korean crypto market. The Travel Rule mandates that any transfers of tokens between Korean and international exchanges must go through accounts that have been verified under Know Your Customer (KYC) guidelines. Given these regulations, there are growing suspicions within the crypto community that foreign venture capitalists may have used accounts in borrowed names to conduct sales on Korean exchanges, which are restricted to Korean citizens. However, it’s worth noting that there is currently no legal basis for taking punitive action even if borrowed-name accounts were indeed used.Lawmaker Kim commented on the limitations of current financial regulations aimed at preventing money laundering in the cryptocurrency market. Despite efforts by financial authorities, including the introduction of the Travel Rule, Kim stated that these measures have not been very effective. He emphasized the urgency of enhancing the regulatory framework to curb potential illicit activities involving cryptocurrencies, such as those exploiting market arbitrage opportunities.

Antpool overtakes Foundry as largest bitcoin mining poolAntpool, a Singapore-headquartered open access mining pool that supports ten cryptocurrencies, has recently surpassed Foundry USA to become the foremost bitcoin mining pool in terms of monthly blocks mined.That’s according to a report published by TheMinerMag, a bitcoin mining industry publication run by New York public relations firm BlocksBridge Consulting.This development indicates a shift in bitcoin mining pool dynamics since January 2022. According to Bitcoin network data, Antpool mined 1,219 blocks in November, slightly edging out Foundry USA’s 1,216 blocks. The total rewards for Antpool’s miner clients reached 8,672 BTC, excluding the 83.6 BTC designated for refunds.Photo by Norman Wozny on UnsplashBitmain affiliateAntPool is an affiliate company of leading crypto mining equipment manufacturer, Bitmain. This surge in Antpool’s hashrate aligns with Bitmain’s substantial importation of over 4,800 metric tons of Antminer S19XP and S19XP Hydro to its U.S. subsidiary in Georgia between June and November. These imports have contributed to an estimated total hashrate exceeding 37 EH/s. The exact activation status of Bitmain’s imported hashrate and whether it is utilized for its own purposes, remains unclear.Foundry USA had previously held the leading position in mining pools since early 2022, benefiting from the rise of North American mining operations following China’s crackdown in 2021. While Antpool consistently secured the second position, its hashrate began closing the gap on Foundry USA around June this year.China vs. U.S. competitive dynamicThe two companies dominate bitcoin mining. With one having a parent company headquartered in China and the other being U.S.-centric, their positioning in terms of overall blocks mined is being seen by some as a reflection of competition between entities in China and the United States in terms of bitcoin mining dominance. Addressing that dynamic in response to CoinDesk recently, CryptoQuant Web3 Analyst Bradley Park wrote:“China is aggressively mining ahead of the approval of a Bitcoin ETF. As the Bitcoin halving nears, I anticipate a competitive surge between China and the US in mining machine productivity. This is because the unit cost of mining Bitcoin is likely to escalate due to increasing power expenses and rising mining difficulty.”The bitcoin hashrate has been climbing continuously throughout 2023, reaching new all-time highs along the way.It’s worth noting that despite Antpool’s dominance in blocks mined, data from BTC.com reveals that the company’s self-reported real-time hashrate consistently lags behind Foundry USA’s over the past three months. The cause of this discrepancy remains uncertain, raising questions about variance or reporting errors affecting Antpool’s real-time hashrate.Bitmain established Antpool in 2014, and it was later spun out of Bitmain to become an independent entity in 2021. Meanwhile, Foundry is a wholly owned subsidiary of Digital Currency Group (DCG). Both Bitmain and DCG have been facing financial challenges over the course of the past year.In a separate development, Foundry took to social media platform X on Thursday to confirm that it is discontinuing support for The Graph protocol, Axelar Network, Polkadot and Flow. The firm said that the changes were decided upon in order to better align the business with its strategic business goals.

Buysell Standards and AGST collaborate to expand security token projects in Southeast AsiaBuysell Standards, a South Korean company operating fractional investment platform Piece, is accelerating its expansion into the Southeast Asian market through a recent business collaboration.A report from Korean news outlet Financial News indicates that the company has signed a memorandum of understanding (MOU) with AGST, a subsidiary of blockchain-focused investor Fundiant Holdings. This collaboration aims to launch security token projects within the Association of Southeast Asian Nations (ASEAN) region.Photo by Kelvin Zyteng on UnsplashSingapore in Q1 2024As an asset manager in Singapore and Japan, AGST is set to play a pivotal role in the issuance and distribution of security tokens in these markets. Their strategy includes launching security token products in Singapore in the first quarter of next year. These products will be backed by assets from Buysell Standards.The partnership between Buysell Standards and AGST is set to be multifaceted, encompassing several key areas of collaboration. Together, they will focus on developing new investment products and building the necessary infrastructure to support them. They will also focus on marketing and promotional efforts in the ASEAN region.Anticipating regulatory exemptionBuysell Standards is among the seven companies that received approval from the South Korean Financial Services Commission to issue security tokens. The company is anticipating a regulatory exemption from the government, which would allow them to introduce fractional investment products linked to ship finance.Buysell Standards expects that its partnership with AGST will facilitate quicker access to funding from international sources for high-quality investment products in South Korea. Meanwhile, AGST seeks to introduce a range of Korean assets to the global security token market.Emphasizing the quick adoption of fintech by ASEAN investors and their fondness for South Korea, Shin Beom-jun, CEO of Buysell Standard, stated that the company is committed to actively promoting Korean security token products on the global investment stage.Kim Chang-soo, Chairman of Fundiant Holdings, expressed his ambition to strengthen the Korean security token market. He observed that the market is currently in an early stage of development, leading to the undervaluation of underlying assets. He believes that introducing Korean security tokens to international markets will reciprocally aid in the expansion and maturation of the domestic market.