e-CNY Payments Enabled for Hong Kong Visitors From Mainland China

The Need for Crypto Regulation Improvements in South KoreaAlthough the cryptocurrency market entered a bearish phase last year, there are prospects for growth as regulatory inclusion and market transparency begin to improve. However, the domestic market is currently hindered by deepening monopolies and inadequate support policies, limiting the development of the industry, said Kim Jin-won, Executive Director of Korean crypto exchange COREDAX, during a conference last Friday in Seoul.The conference, hosted by the Federation of Korean Industries, invited experts to discuss the oncoming era of convergence and the current status and challenges of virtual asset legislation in South Korea, as well as the necessary steps for improving regulations on virtual assets.Photo by Kanchanara on UnsplashGlobal decentralization trendsOverseas, various decentralized projects, such as the integration of blockchain technology into traditional financial markets, have led to the growth of related markets such as Bitcoin futures, decentralized finance (DeFi), over-the-counter (OTC) trading, custodial services, the metaverse, and Web3. However, in Korea, the lack of clear guidance or policy management for crypto businesses and services prevents the market from thriving.Countries like the US and Japan as well as the European Union (EU) are overhauling regulations in order to dominate the global industry and market through blockchain technology and virtual assets. Kim emphasized that Korea also needs to incorporate such flexible regulatory improvements considering the likely possibility that various industries are going to thrive on crypto-related businesses.Challenging existing regulations and calls for clarityHe started off by stating that the implicit regulation known as the “One Exchange, One Bank” principle was created for administrative convenience and is acting as a barrier to entry into the crypto industry. He argued that it is a discriminatory regulation, especially considering the fact that securities firms choose to operate stock trading accounts through multiple banks.Regarding the standards for issuing bank accounts under real names, which will be determined by the Financial Intelligence Unit (FIU), he argued that they are difficult to comply with, even for banks that already have contracts with crypto exchanges. He called for the FIU to express a clear stance on the retroactive application of these standards to avoid potential consequences such as barriers to market entry for late-movers.“The crypto market — including DeFi, non-fungible tokens (NFTs), artificial intelligence (AI), the metaverse, and Web3 — is growing at an annual average rate of 12.8%, and is expected to reach a scale of $4.9 billion by 2030,” he said. “When combined with Web3 innovation, the metaverse will evolve into a 3D platform business that incorporates the use of payment methods, NFTs, and virtual assets.”Promoting innovation in the crypto industryTo foster such industry growth, it is necessary to actively explore new types of services as well as potential challenges. Innovative financial services should also be designated or promoted through regulatory sandboxes. The regulatory sandbox is a system run by the Korean government that exempts or suspends existing regulations for a designated amount of time for companies releasing new products and services and regulates them post-mortem if there is a problem.Kim went on to propose specific measures such as negative regulations — regulations that outline what is prohibited by law while allowing everything else — to promote new industries. He also suggested that banks should be allowed to engage in custodial services for virtual assets.Furthermore, he highlighted the need for cooperation between payment companies and crypto firms. “Payment service providers like Visa and Mastercard are already collaborating with global crypto exchanges to incorporate virtual assets into their businesses,” he said. “With companies like Tesla, eBay, and more adopting or considering adopting cryptocurrency as a payment method, we must consider allowing collaborations between domestic credit card companies, payment gateway companies, and crypto firms.”He also urged for the early approval of initial exchange offerings (IEOs) to stimulate the crypto market and advocated for support policies for virtual asset service providers (VASPs). He cited examples such as brokering transactions for security tokens, allowing OTC trading, requesting security token issuance assessments through system integration with account management agencies, and permitting outsourcing for issuance operations.

$100M Pyramid Scheme Linked to Prominent Chinese Filecoin ProjectA courtroom showdown currently playing out in the People’s Court of Pingnan County in northeastern Fujian province in China is laying bare an intricate pyramid scheme entwined with one of China’s flagship ventures in the Filecoin ecosystem.The lawsuit thrusts five defendants into the spotlight, alleging their orchestration of an expansive pyramid scheme under the guise of their enterprise, Shenzhen Space-Time Cloud Company. The operation is purported to have siphoned off millions of dollars, leaving in its wake a trail of financial wreckage.Photo by Traxer on UnsplashAggressive project marketingAccording to a local media report published on Monday, the saga began in June 2018 when Lai Mouhang and Lai Moujun established the Space-Time Cloud Company. Subsequently, co-defendants Hu and Liang joined the ranks in the following months. However, it wasn’t until September 2019 that Lai Mouhang escalated the company’s operations, leveraging the ipfs.cn domain to aggressively market and peddle investments linked to distributed storage technology and Filecoin’s intricate economic model.Central to Filecoin’s model is its block reward system, where miners validating new blocks receive Filecoin tokens (FIL) as a reward. In a stunning revelation, the prosecution claims that Lai Mouhang and his accomplices crafted a scheme mirroring this economic structure.Their brainchild, the filpool.io platform, served as a conduit for joint mining, masquerading as a storage server vending operation for FIL mining. This platform, intrinsically linked to Space-Time Cloud Company, allegedly formed the epicenter of the defendants’ fraudulent maneuvers.Almost 60,000 usersThe gravity of the scheme becomes evident when considering the staggering numbers: a reported 57,122 members registered on the filpool.io platform and an additional 143 partners on the bpool.io platform, a sibling project of Space-Time Cloud Company. These platforms collectively amassed a jaw-dropping RMB 607 million ($83 million), alongside RMB 62 million in diverse cryptocurrencies.The modus operandi of the defendants was rooted in enticing participants with rosy prospects of exponential profits. By acquiring a minimum of 8 terabytes of cloud computing power, individuals could attain bronze membership status or higher, unlocking the ability to further recruit participants. Unsurprisingly, the magnitude of returns correlated directly with the size of investments and the recruitment spree — classic hallmarks of a pyramid scheme.The prosecution contends that the defendants exploited these platforms as bait for participants, perpetuating the myth of high returns. This alleged deception led to substantial financial losses for many unsuspecting victims. Furthermore, these actions purportedly sowed discord and upheaval in both economic and social spheres, potentially transgressing criminal law boundaries.As the investigation into this convoluted case unfurls, its implications resonate far beyond China’s territorial confines. The intertwining of cryptocurrency, blockchain, and pyramid schemes punctuates the ever-evolving narrative of financial crime. The case highlights the importance of vigilance and regulatory scrutiny in an innovative industry that has more than its fair share of bad actors.

Incheon Launches Blockchain Hub Center to Lead Web3 EraIncheon Metropolitan City announced Monday that it has established the Incheon Blockchain Hub Center at the heart of the city in an effort to establish itself as a blockchain hub in Korea and usher in the era of Web3.Photo by Hon Kim on UnsplashThe center, located in the Jemulpo Smart Town building, will house various facilities, including offices for the Incheon Technopark Blockchain Center, blockchain companies, and startups, as well as spaces for technological development and relaxation.Fostering innovation and cooperationThe center aims to undertake systematic and diverse projects that citizens and businesses alike can benefit from. This includes supporting tenants of the hub center, providing an environment for technology development and demonstration, and funding blockchain technology development. It will also serve as a spot for Incheon Technopark’s blockchain acceleration program, business model exploration and design, and events such as blockchain hackathons and conferences.The city is also set to hold an opening ceremony for the center on Wednesday, during which over 20 organizations and firms will gather for the inauguration of a committee dedicated to promoting mutually beneficial relationships between blockchain-based service providers and consumers. Among the consumers are central and municipal governments and state-run agencies. Initiating connections and making business support processes more efficient will constitute the committee’s core tasks, the city said.Incheon’s vision for Web3“The world is evolving to accommodate Web3, the new blockchain-based Internet, amid the global trend of digital transformation,” said Lee Nam-joo, Director of Incheon’s Future Industry Bureau. In accordance with this transformation, he said, the city of Incheon would push on to become a leading blockchain hub with a globally competitive edge by continually implementing various projects and policies through the committee — including joint projects between the public and private sectors — to provide support for business and technological development.In more efforts to build an active blockchain industry, Incheon is also currently operating a blockchain education program and regularly hosts events and hackathons to promote the widespread use of Web3 technology. Notably, a two-day conference dubbed “Global Blockchain Incheon Conference” is scheduled to take place from October 30 to 31 in the city’s southern district Songdo.