KOMSCO and KEPCO Cooperate on Blockchain Technology

Suspects emerge in Taiwan in ongoing JPEX scandal falloutIn the ongoing saga surrounding the collapse of Dubai-headquartered cryptocurrency exchange JPEX, Taiwanese prosecutors have identified new suspects, marking a significant development in the case.The Taipei District Prosecutors Office (TDPO) has requested the custody of Chang Tung-ying, chief partner at JPEX’s Taiwan office, over allegations of fraud. That’s according to a report by local TV channel TVBS News on Thursday.Photo by Ricky Zeng on UnsplashMoney laundering and Banking Act violationsThis latest development brings a new twist to the scandal, which has largely been playing out in the Chinese territory of Hong Kong. The TDPO reportedly conducted searches at nine locations linked to the JPEX investigation. Chang, along with three other individuals, including JPEX lecturer Shih Yu-sheng (also known as Shi Yu), was summoned by the authorities. Chang and Shih are being investigated for violations of the Banking Act and the Money Laundering Control Act.During the investigation, JPEX salespersons Liu Chien-fu and Niu Keng-sheng were released, with Liu being granted bail of 50,000 New Taiwan dollars ($1,550). Niu, the registered person in charge of JPEX Taiwan, was released after questioning.Celebrity promoter focusThe report also revealed that Nine Chen, a Taiwanese celebrity and singer who previously served as a brand ambassador for JPEX, was summoned by prosecutors. He has cooperated with law enforcement in the role of a witness to the alleged fraud who has testified to illicit activity carried out by the platform. However, it is now understood that recent events have developed such that Chen is now being treated as a defendant.This action resonates with actions taken by the authorities in Hong Kong some weeks ago in the earlier stages of investigation into this affair. In September, one of the first actions taken by Hong Kong law enforcement was the arrest and detention of social media influencer and former lawyer Joseph Lam, known to followers as “Jolamchok” on the Instagram platform.Alleged liquidity crisisJPEX, once a successful crypto exchange, abruptly halted some services in mid-September, citing a liquidity crisis triggered by alleged “unfair treatment” from institutions in Hong Kong. The sudden implosion led to accusations of misleading investors regarding the application for a crypto trading license and other issues.The scandal surrounding JPEX has escalated into a major industry concern, prompting investigations by Hong Kong authorities. Over 2,000 complaints from JPEX users, reporting losses of nearly $180 million, have triggered significant regulatory attention.As investigations progressed in Hong Kong, the authorities took the decision to block access to the platform, with the platform responding by advising customers to circumvent this restriction through the use of a virtual private network (VPN).As of September 25, law enforcement has arrested at least 11 alleged suspects in the JPEX case, while the alleged masterminds remain at large. At that time, Hong Kong’s Securities and Futures Commission (SFC) pledged to renew its efforts to combat unregulated crypto platforms in Hong Kong.A survey conducted by the Hong Kong University of Science and Technology (HKUST) business school has indicated that the affair has had a negative impact on public sentiment towards crypto more recently.

Korean Financial Watchdog to Penalize Bankers Involved in Illegal Foreign RemittancesThe Korean Financial Supervisory Service (FSS) recently completed an investigation into illegal foreign remittances of approximately 16 trillion KRW (~$12,137,718,400) that involved numerous bankers.©Unsplash/Paul FiedlerExploiting the kimchi premiumThe investigation, launched by the Korean financial watchdog last June, found that these lawbreakers sent funds to China, Hong Kong, and other overseas destinations through Korean crypto exchanges, trading firms, and bank branches with an aim of making money through arbitrage by taking the advantage of the kimchi premium, a term used to describe that the higher prices of crypto assets in Korean exchanges compared to their foreign counterparts.Bankers neglecting the KYC ruleSome of these bankers participated in the crime by raising the remittance cap and applying favorable exchange rates to trading companies that had no previous transaction records with banks. By law, bankers in Korea are obligated to follow the “know your customer” rule. It was found that 12 domestic banks and one futures firm were involved in this incident.The FSS has decided to impose strict penalties on these financial institutions, considering they were exploited for money laundering purposes. These entities are likely to have some of their services suspended, with the employees involved being fired.Accountability of top bankersOne key point to watch out for is whether the FSS would be able to hold executives accountable. Some say penalizing top bankers is not easy, given that it has to be proven that the employees’ criminal activities were due to a lack of executives’ internal control.The financial regulator recently announced plans to revise the law governing banks’ governance, but it is expected that such a bill would take some time to pass through the National Assembly.Through a revision of the law, the financial authority aims to hold top executives at financial institutions more responsible for serious financial accidents. It looks forward to bestowing top bankers with the obligation of comprehensive internal control management and making them accountable as an overall manager only in case of critical financial accidents. The term “top executives” in the bill will encompass not only bank presidents but also chairpersons of financial holding companies. More specific revision plans are expected to be revealed by the end of this month.

LG CNS Chooses Six Startups to Foster Innovation in Digital TransformationLG CNS, the information technology (IT) arm of South Korean conglomerate LG Group, said Tuesday that it has chosen six startups to nurture under its sixth annual Startup Monster program — a program dedicated to supporting technology startups that are capable of pioneering consumer values in the realm of digital transformation (DX). By directly contributing to their growth as startups, LG CNS also aims to secure them as future business partners.Photo by Milad Fakurian on UnsplashAmong those startups is Zkrypto, a company specializing in zero-knowledge proof technology — a method of providing the validity of a statement without revealing the statement itself. Zkrypto will work with LG CNS on security solutions and privacy protection services necessary for operating digital finance services such as digital wallets and security tokens. The two companies already established their relationship earlier last month when they signed a memorandum of understanding (MOU) to jointly develop blockchain-powered business models.Investing in startup growthUnder the program, the companies will undergo a six-month technology assessment as well as receive KRW 100 million (approximately $75,000) in funding to demonstrate the feasibility of technology integration into their businesses. LG CNS said that it would carry out the assessment by leveraging its extensive business references and technical resources along with assistance from other IT experts.“Through the Startup Monster program, we will continue to discover and nurture promising startups with innovative technologies and create an ecosystem where we can grow together,” said Jeon Eun-kyung, Executive Director of LG CNS’ Convergence Technology Research Institute.Participants from diverse industriesThis year’s recruitment attracted over 240 applicants, resulting in a highly competitive selection ratio of 40:1. Other selected startups besides Zkrypto include GradeHealthChain, Quantum Universe, Delivery Lab, mAy-I, and Circle Platform, which specialize in emerging DX technologies, such as big data analysis, artificial intelligence (AI) modeling, and extended reality (XR).GradeHealthChain is known for its health management app LOG, which analyzes health checkup results and medical information to allocate an overall health score. Users can provide these scores and other medical information to insurance companies partnered with GradeHealthChain to receive premium discounts on insurance. In turn, the insurance companies can use this data to accurately assess the customer’s health status and recommend optimal insurance products. LG CNS plans to work with GradeHealthChain to create services for insurance product recommendations.On the other hand, Quantum Universe specializes in the planning, production, and distribution of XR content. With LG CNS, the company will jointly develop digital twin technology that replicates physical objects in a digital environment for applications in smart factories and manufacturing. They are also pursuing marketing projects using metaverse technology.mAy-I and Circle Platform were chosen for the program for their impressive technical capabilities in data collection and AI modeling. Meanwhile, Delivery Lab operates a food distribution platform in the smart logistics field.LG CNS has been actively nurturing startups and working with them through the Startup Monster program since 2018. Up until last year, a total of 22 startups participated in the program.SelectStar, one of last year’s participants, is currently collaborating with LG CNS as a data construction partner for AI businesses. The two companies have notably created KorQuAD 2.0, a Korean language machine reading comprehension dataset.In addition, Lovo, an AI text-to-speech solutions startup from the third Startup Monster program, worked with LG CNS on developing an AI contact center. According to industry sources, Lovo’s corporate value has increased more than 20 times from the time it participated in the program, reaching KRW 100 billion.