Korea’s Internet Agency Encourages More Blockchain Tech Adoption to Overcome Crypto Winter

Bithumb records declining performance in Q3 amid market challenges and interest rate hikesBithumb Korea, the operator of the South Korean cryptocurrency exchange Bithumb, reported an on-year decline in performance compared to last year, driven by deteriorating market conditions. According to data from the Korean Financial Supervisory Service on Tuesday (local time), the exchange recorded a net loss of KRW 10.6 billion (approximately $8.1 million) and operating losses of KRW 650 million in Q3. Its revenue amounted to KRW 32.4 billion, a 53% decrease from the same period last year.Photo by Алекс Арцибашев on UnsplashFalling figuresBithumb had recorded KRW 28.8 billion and KRW 32.6 billion in operating and net profits, respectively, in Q3 last year, but both of these figures turned into a deficit for the same period this year.This worsened performance can be attributed to weakened investor sentiment amid the U.S. Federal Reserve’s ongoing interest rate hikes and a decrease in trading volumes.However, just last month, these conditions have begun drastically improving as excitement mounts for the potential approval of a spot bitcoin exchange-traded fund (ETF).Murky futureNevertheless, concerns about Bithumb’s profitability in Q4 are arising following the exchange’s zero trading fee policy that it implemented last month in a bid to regain its market share, especially because the primary source of revenue for crypto exchanges is trading fees. Bithumb had previously charged trading fees of between 0.04% and 0.25%.“We will do our best to enhance the competitiveness of our services to boost our market share,” Bithumb said. “At the same time, we will enhance the transparency of our operations through efforts such as our recent preparations for an initial public offering (IPO) and improvements in corporate governance.”The exchange’s upcoming IPO is part of efforts to be listed on Korea’s KOSDAQ stock exchange by 2025, which would make it the first virtual asset company to do so. It had previously considered preparing for an IPO in 2020 but suspended plans due to a lack of clear regulations for virtual assets. But with the upcoming Virtual Asset User Protection Bill set to take effect next July, Bithumb decided that the current regulatory landscape would be conducive to an IPO.Should it take effect, this IPO is also expected to pose a challenge to Upbit, which currently holds over 80% of the country’s market share. However, there is still a considerable amount of uncertainty shrouding this development, as financial authorities are maintaining a wary stance towards virtual assets.

Sejong Telecom to showcase real estate STO platform at 2023 Blockchain Grand WeekSejong Telecom announced that it is participating in the upcoming 2023 Blockchain Grand Week from Wednesday to Thursday in Seoul to showcase BBRIC — its blockchain-based security token offering (STO) service that tokenizes real estate profit rights — while securing business partners in the process.Photo by Precondo CA on UnsplashLeveraging blockchain technology in real estateBBRIC is built and operated on distributed ledger technology, which protects investors by digitizing their real estate profit rights and recording them on the ledger. This customizable solution enables enterprises to operate and manage the life cycle of an STO, including token issuance, investment product sales, investor deposits and transactions.Corporate clients can seamlessly integrate BBRIC into their respective services or platforms to issue and trade security tokens, calculate dividends, conduct settlements and organize shareholder meetings. They can also securely manage tokens and digital wallets based on smart contracts.“Our technology-intensive STO solution will be a great help to companies that are preparing STO-related projects,” said Park Hyo-jin, head of Sejong Telecom’s marketing strategy division.Bringing BBRIC to the massesThe 2023 Blockchain Grand Week — hosted by the Ministry of Science and ICT and jointly organized by the National IT Industry Promotion Agency (NIPA), the Korea Internet and Security Agency (KISA) and the Institute of Information and Communications Technology Planning and Evaluation (IITP) — aims to promote the value of blockchain technology in enhancing trust in the digital age.Additionally, Sejong Telecom plans to introduce BBRIC at SoftWave, the largest software exhibition in Korea, set to take place at the end of this month. This follows the company’s presentation at the Busan Blockchain City Conference, which showcased the feats of technological innovation in regulation-free zones. Sejong also seeks to expand its network and accelerate the commercialization of its service.The company will also share updates on its submission for a proof of concept (PoC) project to the NIPA. This project involves building a blockchain-based platform for issuing and distributing security tokens and integrating systems for the utilization of mineral resources.Sejong Telecom also recently partnered with enterprises like Hyosung TNS and KOREIT to promote BBRIC and expand the products and services available on the platform.

Abu Dhabi’s Venom Ventures Fund faces market challengesA report by The Block on Friday suggests that Abu Dhabi’s ambitious Venom Ventures Fund, heralded earlier this year with promises of $1 billion investment in Web3 startups, is facing challenges in following through on its mission.Photo by Nazar Skalatsky on UnsplashWhat is Venom?Venom is a collaboration between the Venom Foundation and Iceberg Capital, an alternative asset management company also based in Abu Dhabi. The venture was conceived by Peter Knez, former Co-Chief Investment Officer of BlackRock’s fixed income division and Mustafa Kheriba, Iceberg’s Executive Chairman.In a tweet thread published back in August, the firm described the fund as “old money meets new, the perfect platform for leading the next iteration of blockchain development.” The fund outlined that its approach incorporated venture capital, the offering of a project incubator and a specialist advisory service.Knez has set out lofty ambitions for the fund, stating:“The vision is to drive billions of users into our layer one Blockchain technology by being institutional quality and regulated, and by being such we can actually partner with the government and institutions to help them develop framework for stable coins, for cross-border payment system for tokenization of real world assets and thereby help web2 businesses and citizens move to web3.”At the time of its announcement, Venom Ventures boasted a $20 million investment in Nümi Metaverse and a $5 million strategic investment in Layer 1 blockchain Everscale.Unexpected silenceFurther details on deals struck since January have been scarce, although the fund was reported back in August to have been involved in a blockchain-based carbon credits project, backed by the United Arab Emirates (UAE) Ministry of Climate Change and Environment (MOCCAE).According to The Block, there has been an unexpected silence from the venture as its first year in business comes to a close, despite the initial buzz in the crypto community that greeted the launch of the fund.Venom Ventures positioned itself to cover the entire venture spectrum, from seed to late-stage investments, even offering grants ranging from $25,000 to $200,000. However, a closer look reveals a stark contrast between the fund’s ambitious promises and its current progress. The fund’s website lacks a portfolio section, displaying only a “coming soon” notice.Blockchain mainnet yet to launchThe venture fund has yet to launch its Venom blockchain mainnet, according to Christopher Louis Tsu, CEO of the Venom Foundation. The lack of updates and communication has raised concerns among industry observers about the fund’s overall progress and its ability to fulfill its investment commitments.The broader context of the crypto market adds to the challenges faced by Venom Ventures. Q4 2023 is expected to see a significant drop in venture funding for Web3, down to approximately $2.7 billion from the peak of $13.5 billion in Q1 2022. Market events have left VCs cautious, with notable instances of significant investments being marked down to zero.Amidst these challenges, crypto startups have turned to the Middle East for capital. However, some industry insiders caution that the perceived ease of accessing capital in the Middle East might be a mirage. With that, it remains to be seen whether the fund can revive its initial momentum and deliver on its promise to fuel the growth of Web3 startups in the ever-evolving crypto landscape.