Korean Gov’t Encourages Discussions on Tax Imposition within the Metaverse

Korean Crypto Firms Organize Consortium for Real-World Asset TokensElysia, a Korean decentralized autonomous organization (DAO) project, announced today that it organized a consortium to promote an ecosystem for real-world asset (RWA) tokens.Tangible assetsRWA tokens are virtual assets underpinned by tangible assets such as real estate properties and cars.The consortium comprises Neopin, a blockchain platform of Korean online game publisher Neowiz; Galaxia Metaverse, a blockchain subsidiary of Korean industrial conglomerate Hyosung Group; and BKEX Labs, a British Virgin Islands-based crypto investment firm. The companies will collaboratively research and develop a decentralized finance (DeFi) lending protocol supported by RWA tokens.Photo by Jessica Bryant on PexelsLending protocolsLending protocols based on physical assets offer better security and higher profitability compared to those based on unbacked virtual assets, which often experience high price volatility. As a DAO LLC approved by the state of Wyoming in the US, Elysia will leverage its RWA tokenization system to bolster security within the protocol and provide legal safeguards to investors.In addition, tokenized tangible assets are expected to offer small investors a chance to invest in markets that were previously out of reach due to the requirement of a significant amount of capital.According to Aju Business Daily, an Elysia official said that an RWA-based lending protocol would not only appeal to retail investors but also to institutions and projects. These entities are expected to park their excess funds and introduce RWA liquidity pools into their DeFi, the official added.Better liquidity of physical assetsElysia’s RWA tokens can be liquidated on its DeFi platform Elyfi. Users can create RWA tokens based on their tangible assets and visit Elyfi to sell those tokens or borrow virtual assets against them. Elysia aims to facilitate the liquidity of physical assets and offer a diverse range of financial services based on this model.

HeyBit to Cease Virtual Asset Deposit Services in OctoberSouth Korean centralized finance (CeFi) company HeyBit announced on Monday that it will terminate its virtual asset deposit service, Harvest, on October 2 in line with regulatory guidelines.Photo by Andre Taissin on UnsplashRegulatory limitations“Although we have made efforts to pay promised returns and provide stable digital asset investment products, we have ultimately decided to terminate the Harvest service in accordance with the policy guidelines of regulatory authorities,” the company said in a statement.It further emphasized that the service termination is solely due to regulatory restrictions, rather than questions of financial integrity or credit issues, while also citing its judgment call that running a deposit business is practically impossible at the moment.“Although some customers of other businesses have faced damages due to operational issues, the results of our due diligence report for the second quarter of 2023 were consistent with that of our last four reports, stating that the value of the assets we own exceeds that of deposited assets,” HeyBit said, seemingly referring to the recent class-action lawsuits against the Korean crypto platforms Haru Invest and Delio, who had unexpectedly suspended customer deposits and withdrawals, inciting KRW 50 billion (approximately $39 million at the time of the incident) in damages in the process. The company stressed that it was unrelated to this debacle and was securely storing all customer assets, alleviating potential investor concerns.The company has thus been able to properly handle management operations involving promised returns, additional deposits, and withdrawals for Harvest users up until now.However, it has decided to comply with the Virtual Asset User Protection Act, which is set to take effect next year in Korea. Article 7, Paragraph 2 of this act outlines that virtual asset companies must keep their own virtual assets and customers’ virtual assets separate, and they must own the same quantity and type of virtual assets — including deposited assets — as those that have been entrusted by customers.“We are thus unable to use the assets entrusted to us by our customers as a source of return,” HeyBit said.Planned reboundDespite this setback, the company promised to resume services based on regulatory and policy changes in the future, including revamping virtual asset deposit services.

Nod to Gender Diversity as ZORIXchange Appoints Female CEOIn an industry historically dominated by men, Dilys Cheng’s recent appointment as the CEO of Dubai-based ZORIXchange’s digital assets platform marks a progressive step in achieving gender diversity in the cryptocurrency space.The Middle Eastern crypto exchange business announced the appointment via a press release which was published on Monday.Photo by JÉSHOOTS on PexelsBanking backgroundThe firm articulated that Cheng, who hails from Nantou in Taiwan, gained experience in the banking world, igniting a fervent passion for streamlining financial ecosystems. Her eagerness to simplify these processes dovetailed with the potential of blockchain technology, propelling her on a mission of transformation.Leveraging her extensive background in finance, Cheng has merged her expertise in fiat exchanges with the emerging capabilities of blockchain technology. Her tenure as the former Director of Asia Blockchain Accelerator showcased her acumen, propelling startups toward global expansion by harnessing the power of blockchain.Addressing a gender imbalanceThe company also outlined the importance of the appointment from the perspective of gender equality, in an industry that is not well represented by women. The press release goes on to state that Cheng herself “places a strong emphasis on gender equality.” Cognizant of the formidable challenges women encounter in what is very much a male-dominated sector, it appears that Cheng has made the subject a cornerstone of her agenda.Cheng stated: “As we evolve technologically, it’s equally imperative that our culture evolves.”DiversificationThe gender diversity problem in crypto has long been recognized. When it comes to venture capital-backed crypto startups, less than 20% implicate female startup founders.Her rise through the ranks is more than just a professional achievement; it symbolizes the dismantling of merit-based glass ceilings and underscores the ongoing progress in society. Cheng’s ascendancy signifies a profound shift in the crypto realm, one that champions innovation and inclusiveness.From the perspective of investors, a study carried out by Gemini in 2021 found that only 26% of crypto investors were women. The issue isn’t confined to crypto and extends across the broader finance and technology spaces in general. A McKinsey study highlighted that 64% of C-suite executives in financial services were men, with 23% being women.ZORIXchange was founded in 2022 by David Pan. Pan previously worked for KPMG in Taiwan as its COO for Startups and Innovation. In 2018 he left KPMG to establish the ACE crypto exchange in Taiwan. ZORIXchange builds on his experience in the exchange business, within the Middle Eastern market and beyond. ZORIX has offices not only in Dubai, but also in Malaysia and Singapore. The firm has plans to extend its geographical offering further, with a proposed expansion into Hong Kong and Australia in the works.According to a press release published earlier this year, the company is focusing on getting compliance right. With that, it is in the process of acquiring licensing in Dubai, having previously obtained crypto trading licenses in Lithuania and Slovakia.The exchange is expected to launch fully in September, with plans to offer fiat withdrawal and deposit options, together with a debit card product.