Oman’s Crypto Mining Expansion Signals Further Economic Diversification

A couple of days have passed since the 22nd general election took place in South Korea, whose results have disappointed President Yoon Seok-yeol and the country's ruling People Power Party (PPP). The main opposition Democratic Party of Korea (DPK) won the election in a landslide, securing a total of 175 seats out of 300 in the National Assembly.   Now, with the DPK set to continue exerting control over the National Assembly, financial industry insiders are focusing on whether the liberal party will stick to its campaign pledges to ease regulations on cryptocurrencies and related products – most notably, approving investment and trading of spot Bitcoin exchange-traded funds (ETFs) within the country, according to media outlet Yonhap Infomax. Ever since the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs in January, interest surrounding such products has intensified among Korean investors. Photo by Alesia Kozik on PexelHowever, the Korean Financial Services Commission (FSC) has been reluctant to approve such spot ETFs, citing the potential risk of such approval violating the Financial Investment Services and Capital Markets Act. Various pledges to ease crypto regulations The DPK, in response, has introduced several campaign pledges aimed at easing crypto regulations, both to win votes from younger Koreans – especially those in their 20s and 30s who make up a significant portion of crypto investors in the country – and to bolster the local crypto market. Among these pledges was to include virtual asset ETFs in Individual Savings Account (ISA), which would enhance tax breaks for crypto gains. Another notable pledge was to deduct taxes on crypto gains worth up to KRW 50 million (approximately $36,560). Under the current law, only crypto gains within the limit of KRW 2.5 million qualify for the tax deduction. One local crypto insider commented on the outcome of the general election, saying that the industry will need to keep an eye on how the situation surrounding crypto regulations develops, as easing such regulations was one of the key promises the DPK made during the election campaign period.   Still, long way ahead for Korea to approve spot Bitcoin ETFsMeanwhile, CryptoQuant CEO Ki Young Ju left a comment yesterday on the X (formerly Twitter) post written by crypto analyst MartyParty, which reads, "South Korea has approved spot Bitcoin ETFs."  Ju pointed out that South Korea still has "a long way to go" when it comes to approving spot Bitcoin ETFs, noting that just because "the Bitcoin-friendly Democratic Party," or the DPK, won the general election doesn't mean that financial regulators have approved such products.  

OKX Ventures, the investment wing of the Seychelles-based cryptocurrency exchange OKX, has disclosed a strategic A-round investment in Polyhedra Network. Details of the investment have been outlined through a press release published via PRNewswire on Tuesday. Specializing in the creation of Web3 infrastructure, Polyhedra Network places a premium on interoperability, scalability and privacy, leveraging advanced zero-knowledge (ZK) proof technology.Photo by Precondo CA on UnsplashInteroperability with privacyA ZK proof provides the ability for one party to cryptographically prove to another party that it possesses a certain piece of information without having to reveal the actual underlying information to the other party. Central to Polyhedra Network's product offering is its zkBridge protocol, a system facilitating trustless and efficient cross-chain infrastructure for both layer-1 and layer-2 interoperability. The protocol empowers the receiving chain to verify specific state transitions on the sending chain. This approach ensures robust security without external assumptions, effectively reducing the costs associated with on-chain verification. Polyhedra Network made an initial impact in 2023 with the launch of the "zkBridge Mainnet Alpha." That product enabled interoperability over 20 layer-1 and layer-2 blockchains, including well-known networks such as Bitcoin, Ethereum, BNB Chain and Arbitrum. Distributed proof systemThe innovative strides of Polyhedra Network, which was founded in the United States by James Zhang, Tiancheng Xie and Nikhil Shah, continued in 2023 with the introduction of deVirgo, a novel distributed proof system expediting proof generation. The deVirgo protocol also incorporates recursive proofs which trim on-chain proof verification costs associated with zkBridge. Last month, Polyhedra Network unveiled its Bitcoin messaging protocol with zkBridge, ushering trustless interoperability into the Bitcoin ecosystem through the use of ZK-proof technology. Asian backingBy championing entrepreneurs contributing to the blockchain industry's advancement, OKX Ventures is helping to build innovative companies, bringing global resources and historical experience to the forefront of blockchain projects. It is one of many Asia-centric venture firms to do so. Polyhedra has secured backing from Hong Kong’s Animoca Brands and HashKey Group, Singapore’s UOB Venture Management, NGC Ventures, Signum Capital and Foresight Ventures, alongside KuCoin Ventures. In an initial funding round in February 2023, the UC Berkeley team attracted $10 million in funding. By April, a pre-Series A round had raised a further $15 million. Dora Yue, the founder of OKX Ventures, expressed their honor in participating in the investment in Polyhedra Network's interoperability infrastructure. Yue lauded the creativity demonstrated by Polyhedra Network's team in developing advanced ZK-proof mechanisms, emphasizing the balance achieved between ZK interoperability and scalability. OKX Ventures, with an initial capital commitment of $100 million, is committed to supporting Polyhedra Network's vision of seamlessly connecting the Web2 and Web3 worlds, aiming to attract a more extensive user base to the industry. As the investment arm of the global crypto exchange platform, it dedicates itself to exploring top-tier blockchain projects on a global scale. Its focus is on fostering cutting-edge blockchain technology innovation, aspiring to support the healthy development of the global blockchain space and investing in long-term structural value.

A Korean Lawmaker’s Crypto Holdings Worth $4.5M Spark ControversySouth Korean lawmaker Kim Nam-kuk, a member of the opposition party Democratic Party of Korea (DPK), has recently come under scrutiny due to his reported possession of 800,000 WEMIX tokens from January to February last year, as reported by the Maeil Business Newspaper. These tokens were worth approximately 6 billion KRW or $4.5 million at the time. While Korean lawmakers are obligated to disclose their wealth, virtual assets are an exception. The disclosure of Kim’s ownership of these tokens has ignited controversy, as it unveiled a wealth magnitude significantly greater than previously understood.Photo by Karolina Grabowska on PexelsTravel Rule regulationA central issue in the unfolding dispute is the source of Kim’s investment in the WEMIX tokens. It has been reported that he purchased a significant amount of these tokens between January and February last year and withdrew the entire sum between February and March before the crypto exchange implemented measures to comply with the Travel Rule regulation. This rule requires that financial authorities be informed of transactions over 10 million KRW ($7,500). After the crypto exchange reported the transactions to the Financial Intelligence Unit of the Financial Services Commission, the government agency requested a warrant to search Kim’s account due to the transactions’ abnormality. However, the court dismissed the request.Jeonse deposit to LG Display sharesIn response to the controversy, Kim took to a YouTube channel on Tuesday to explain his WEMIX token investments. He stated that he had retrieved 600 million KRW ($450,000) after his jeonse contract expired and used the money to purchase LG Display shares. Jeonse a housing rental system in Korea where tenants put up a lump-sum refundable deposit on a rental space for a two-year stay. Kim claims that these LG Display shares later rose in value to 985.7 million KRW ($744,000) in January 2021 and that he used this sum to purchase the tokens.Account balance and WEMIX tokensDespite his explanation, there are still questions surrounding Kim’s sudden increase in his bank account balance. His account balance reportedly increased from 100 million KRW ($76,000) at the end of 2020 to 1.12 billion KRW ($850,000) by the end of 2021, which raised suspicions. If Kim had directed all the money withdrawn from the LG Display shares to WEMIX tokens, it is unclear where the additional $774,000 in his account came from. Kim has reportedly explained to his party’s leadership that he retrieved the principal amount of his investment due to the increase in the WEMIX token price. However, this explanation has not satisfied some critics.Insufficient explanationIn an attempt to address these concerns, Kim shared part of his bank transaction records on Monday. However, this disclosure has fallen short of addressing all the questions that have been raised, such as the precise amount invested in the tokens and their purchase prices. There is still significant public scrutiny and skepticism surrounding Kim’s explanation for his crypto holdings, and it remains to be seen if further disclosures will be made.Kim apologized to the Korean public via Facebook for any disappointment caused, especially amid challenging economic conditions. However, he denied accusations of using undisclosed information or unlawfully acquiring wealth. Kim maintained that all transactions were transparently made using only his own wallets through his real-name bank accounts.Potential insider trading and conflict of interestNevertheless, the public’s acceptance of his explanation is yet to be seen, as questions about his $4.5 million virtual assets persist, particularly given his reported total wealth of around $1.1 million. There are concerns surrounding the possibility of insider trading. Furthermore, Kim’s participation in proposing a bill to defer tax implementation on digital assets has triggered suspicions of a potential conflict of interest.Call for an impartial third partyRecent updates indicate that the prosecution is considering requesting a warrant against Kim in relation to the controversy surrounding his crypto holdings. The Anti-Corruption and Civil Rights Commission is also examining if his participation in proposing the bill constitutes a conflict of interest. It is evident that an impartial third party will need to investigate and analyze all relevant information to resolve this dispute. Until a thorough and unbiased investigation takes place, the public’s concerns and questions are likely to continue.