RBI Official Encourages Indian Banks to Adopt Blockchain

Exploring the motivations behind Crescendo’s multi-million dollar investment in LINE NEXTIn a move that has made headlines as the largest investment made in the Asian blockchain and Web3 industry this year, Seoul-based private equity firm Crescendo Equity Partners has decided to invest $140 million in LINE NEXT, the NFT business arm of Tokyo-based Internet giant LINE Corporation. According to South Korean news outlet DealSite, this can be seen as a strategic decision to leverage LINE’s global network, which dominates the Japanese market. Considering Crescendo’s track record of successful investments in various IT companies, the industry is keen to see whether the firm can replicate this success in the rapidly growing blockchain sector.Photo by Pepi Stojanovski on UnsplashConsortium takes controlAccording to the South Korean Financial Supervisory Service’s (FSS) Data Analysis, Retrieval and Transfer (DART) System on Thursday (local time), Crescendo’s special purpose company (SPC) established to manage the LINE NEXT investment dubbed Ludwig Holdings will act as a third party in the investment by providing KRW 130 billion in paid-in capital. Other financial investors will also contribute KRW 52 billion through a consortium formed with Crescendo, bringing the total investment amount to KRW 182 billion, or approximately $140 million.As a result of this capital increase, 795,401 new shares will be issued. Crescendo’s consortium will thus secure a 50% stake plus one more share, making it the largest shareholder group. However, among individual shareholders, LY Corporation will maintain its position as the single largest shareholder. The existing number of shares was 795,400. Crescendo plans to utilize its third fund, which raised KRW 1.1 trillion in 2021, to provide the funds by next February.Smooth transitionAlthough the consortium has become the largest shareholder group, there is no indication of an immediate change in LINE NEXT’s current management board. This decision is likely because blockchain development companies should be run by executives who are familiar with the unique ins and outs of the blockchain industry. The firm’s current CEO, Ko Young-su, is an IT expert who had been responsible for financial technology (fintech) operations at LINE Corp.Web3 expansionThrough the investment, LINE NEXT plans to popularize Web3 by expanding its global platform and developing new services. This includes DOSI, a global mobile NFT marketplace app for trading digital products, which will be integrated with LINE’s Japanese NFT marketplace LINE NFT. DOSI’s launch is scheduled for January next year.Navigating uncharted territoryMany believe that LINE NEXT’s ambitions for dominating the blockchain sector aligning with Crescendo’s tradition of investing in promising IT companies is sufficient justification for the major funding decision. However, some observers find the development surprising, considering the fact that it is rare for private equity firms in Korea to make such large investments in blockchain firms — an industry that has mostly been an unpopular choice for investors, likely due to its close association with crypto assets. Indeed, Crescendo’s interest in the company may have been partly driven by the fact that it is more focused on blockchain technology itself rather than crypto.“Crescendo seems to have focused on LINE’s global network, which pushed it to invest in its subsidiary. Considering the popularity of NFTs and other related projects last year, expanding this area of business seems plausible,” said an anonymous source from the investment banking industry. “Peter Thiel [the billionaire entrepreneur and venture capitalist who sponsored Crescendo] is known to have a keen interest in blockchain technology and is actively making investments in the sector, which probably made the decision-making process much smoother.”This development signifies yet another shift in the evolving business landscape, where parts of the industry that have not been traditionally associated with blockchain are increasingly recognizing the potential of its role in the future of industry and technology.

Korea’s FSC Opposes Other Agencies’ Involvement in Virtual Asset BillAhead of the National Assembly’s passage of the virtual asset bill, the Korean Financial Services Commission (FSC) has repeatedly opposed the involvement of the Bank of Korea (BOK) and the Financial Supervisory Service (FSS) in regulating cryptocurrencies, according to the Korean newspaper Kukmin Ilbo.©Pexels/LukasFSC’s oppositionIn a document submitted to the National Assembly’s National Policy Committee, the FSC opposed stipulating the BOK’s right to request documents in the virtual asset bill. The agency argued that the bill is indirectly related to the BOK’s monetary and credit policy and that explicitly mentioning monetary and credit policy in the bill could lead to the misinterpretation of virtual assets as possessing the characteristics of currencies.The FSC also objected to stipulating the FSS’s right to inspect crypto enterprises. According to law, the purpose of the FSC is to inspect and supervise financial institutions. Explicitly stating the FSS’s right to inspect crypto enterprises could cause confusion to the public that they are financial entities.However, there are growing concerns about the FSC’s perceived intention to dominate virtual asset jurisdiction.At a small meeting held under the National Policy Committee last month, Lawmaker Yoon Han-hong of the ruling People Power Party expressed the view that the FSC should consider incorporating the BOK and the FSS in the virtual asset bill for crypto regulations. During the meeting, the FSC objected to the inclusion of a stipulation that excludes central bank digital currencies (CBDCs) from the definition of virtual assets. Meanwhile, the BOK agreed to include such a stipulation.Allowing class action suitsAccording to an internal document obtained by Kukmin Ilbo, the FSC also intends to allow class action suits for crypto investors. It seeks to add cryptocurrencies to a bill proposed for class action suits, which also deal with securities. Class action suits provide a means for victims to receive redress in cases where a representative is successful in winning the lawsuit against the offender.The FSC stated that it will follow the majority on the issue of whether the purpose of the virtual asset bill should include the phrase “to contribute to the development of the nation’s economy,” although it left a cautionary note that some might raise objections to this, considering the speculative nature of virtual assets.

Intella X Explores Ways to Integrate YGG’s Soulbound Reputation Tokens into Its WalletIntella X, a South Korean Web3 gaming platform, has announced its partnership with Yield Guild Games (YGG), a leading DeFi-powered gaming guild.Photo by Shubham Dhage on UnsplashBoosting Intella X’s global presenceThis collaborative effort is expected to boost Intella X’s presence in the global Web3 sector. YGG, boasting a membership base of over 450,000 worldwide and collaborating with more than 80 gaming companies, recently launched Superquest, a new way to earn in-game rewards. Superquest awards soulbound reputation tokens to gamers based on their level of community engagement and contributions. The two organizations will explore ways to integrate YGG soulbound reputation tokens into Intella X Wallet (IX Wallet), a Web3 wallet designated for the Intella X platform.In an attempt to expand its ecosystem, Intella X has soft-launched the Android and web versions of IX Wallet. Furthermore, the Korean Web3 platform in February joined forces with IndiGG, a sub-decentralized autonomous organization of YGG in India.Neowiz’s Q2 financialsIn the midst of these developments, Neowiz, the parent company of Intella X, last week disclosed its financial performance for the second quarter. The company garnered revenues amounting to KRW 70.1 billion ($52.7 million), signifying a year-on-year decrease of 0.2%. Neowiz incurred an operating loss of KRW 4.9 billion during the same period, venturing into negative territory in Q2. This setback can be attributed to escalated marketing expenditures associated with the launch of the mobile role-playing game “Brown Dust 2” and the third-year anniversary celebration of the MMORPG title “Kingdom.” The latter is the brainchild of game developer FOW Games, a company Neowiz acquired in May.Meanwhile, Neowiz’s Q2 net income recorded an 8% year-over-year increase, totaling KRW 22.4 billion. This one-time gain is due to the sale of certain shares the company owned in another entity as part of the wider FOW Games acquisition strategy.Path to recoveryIn the latter half of this year, Neowiz is gearing up for recovery, channeling its focus into in-house developed titles. A key highlight among these is the imminent launch of “Lies of P” on September 19. As the launch date of this soulslike video game, inspired by the narrative of Pinocchio, draws near, the company is poised to offer game packages for pre-sale commencing September 17. These packages will be accessible both online and in-person through the e-commerce platform SSG.com and the warehouse chain E-Mart Traders. An extensive global marketing campaign is also in the works, with Neowiz set to participate in Germany’s Gamescom 2023 later this month.