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China has provided insights into the conviction of Zhao Dong, the influential crypto over-the-counter (OTC) trader and widely known founder of the RenrenBit crypto trading desk. The ‘OTC King’Last Wednesday, China’s Supreme Procuratorate disclosed that Zhao, known as the "OTC King," was handed down a substantial prison sentence for engaging in illegal foreign exchange and crypto business operations. The case is emblematic of China's persistent efforts to clamp down on cryptocurrency trading, even when conducted through less transparent channels like OTC desks, private chat groups and stablecoins.Photo by Hanson Lu on UnsplashTracing fundsIn their comprehensive disclosure, the Chinese authorities outlined the meticulous investigation that led to Zhao Dong's conviction. The focus was on tracing fund movements across Chinese bank accounts, overseas cash pools and the circulation of Tether and Bitcoin. Investigators honed in on accounts associated with Zhao Dong and the chat groups used for trading activities. Their arsenal included detailed bank records, WeChat conversations, testimonies from Zhao's OTC agents and other documentary evidence. The report highlighted that all defendants, including Zhao Dong, confessed to the process of collecting dirhams in cash in Dubai, paying RMB to the other party's designated account, buying Tether with dirhams, and allowing the domestic gang to illegally sell it back for RMB. Seven year sentenceIn one of the alleged schemes, Zhao Dong purportedly orchestrated crypto-fiat trades between Dubai-based entities holding cash piles in United Arab Emirates (UAE) dirhams and Chinese contacts within the country. With numerous related recipients confirming that the funds Zhao received were payments from foreigners, the prosecution's case was made so much stronger. Zhao unsuccessfully argued during three public court hearings that his actions constituted digital currency transactions and not a breach of foreign exchange laws. The prosecution countered with evidence from the group's chat records, emphasizing the nature of foreign exchange in their dealings. The court ultimately rendered a verdict, sentencing Zhao Dong to seven years in prison and imposing a 2.3 million Chinese yuan ($325,000) fine. This conviction serves as a stark reminder of the stringent regulatory stance that China has adopted towards cryptocurrency trading. Zhao Dong was considered one of China's most influential OTC crypto traders. He was a Bitfinex shareholder and founder of the D Fund venture capital fund. He established RenrenBit in August 2018, incorporating the company in Singapore. The influential crypto trader is also believed to have been involved in assisting stablecoin-issuer Tether to launch its Tether Yuan product. However, once the authorities moved against him, RenrenBit was taken offline while Tether scrapped its pursuit of Tether Yuan. Despite his influence, Zhao has ultimately become a symbol of the government's commitment to curbing such crypto trading activities within mainland China. The outcome underscores the severity of China's regulatory crackdown on cryptocurrency trading and sends a strong message to other players in the crypto space within the country.

Japan mulls unrealized crypto gains tax exemptionJapanese lawmakers are currently in discussions about a proposal that could exempt companies from paying taxes on unrealized cryptocurrency gains.Photo by Joshua Tan on UnsplashReforming aggressive crypto tax policyThe plan is anticipated to be incorporated into the fiscal 2024 tax reform agenda, according to a report published by Nikkei Asia on Wednesday.Up until now, Japan has had some of the most aggressive tax rates where cryptocurrencies are concerned when compared internationally. At the moment, corporations have to pay a 30% tax on crypto holdings regardless of whether they’ve sold those digital assets or not. The policy has been criticized broadly by crypto sector participants in Japan. It is seen as inequitable, considering that Japan taxes profits from stocks at a flat 20%.Corporate tax exemptionThe proposal, currently under deliberation by Japan’s ruling coalition, specifically targets Japanese companies holding digital assets for purposes other than short-term trading. If approved, these firms may be granted an exemption from corporate tax, contingent on mark-to-market valuations at the close of the fiscal year.Mark-to-market valuations involve assessing the fair values of assets with periodic fluctuations, such as cryptocurrencies. This exemption is expected to benefit various entities, including venture capital (VC) firms, non-fungible token (NFT) businesses and other blockchain companies holding cryptocurrencies for payment purposes. Additionally, crypto issuers, who are also crypto holders, would not be subjected to these taxes.Policymakers from the Liberal Democratic Party and the ruling coalition partner Komeito engaged in discussions on Tuesday regarding these potential tax exemptions.Bringing clarity to crypto taxationThis move is part of Japan’s ongoing efforts to bring clarity to crypto taxation. In June, the National Tax Agency clarified that crypto issuers in the country would not be liable to pay capital gains taxes on unrealized gains, fostering a more conducive environment for crypto-related businesses.Japan has been actively reviewing its crypto tax policies since last year, aiming to incentivize companies to stay in the country. This initiative follows the departure of several startups due to heavy tax burdens.Industry reactionWith news of this potential Japanese crypto tax reform breaking, crypto community members haven’t wasted any time in providing their thoughts. Taking to the X social media platform, Sota Watanabe, the founder of the Astar Network multichain dApp hub, wrote:”Good move. This is what I requested multiple times to the government over years. Once this issue is solved this year, all companies, especially big enterprises, can hodl crypto like ASTR much easier. Japan weighs ending tax on some corporate crypto holdings.”Former Goldman Sachs Portfolio Manager and Web3 investor, Steve Lee, said that this is “another big move in Japan that would help enterprises push their crypto business.”The Financial Services Agency (FSA), Japan’s top financial regulator, recently submitted legislation-change requests to the government, seeking alterations to the taxation of domestic crypto firms. Critics argue that the existing rule has impeded innovation in the crypto-asset and blockchain sectors, placing an undue burden on companies.On Oct. 16, major businesses in Japan, through the Japan Association of New Economy (JANE), urged the government to implement crypto tax reforms in 2024. Their appeal emphasizes the potential for reduced tax rates to stimulate growth and increase tax revenue.

Korbit and SK Planet Team Up to Promote NFT Membership ProgramKorbit, one of South Korea’s prominent cryptocurrency exchanges, has teamed up with SK Planet, a technology affiliate of the major conglomerate SK Group, in an effort to attract new users to Road to Rich, a non-fungible token (NFT) membership program.Photo by Mo on UnsplashWin up to 0.1 BTCUnder this collaboration, Korbit users will have the opportunity to win up to 0.1 BTC by completing assigned tasks. From those participating, 511 fortunate individuals will be selected as winners. The breakdown of prizes is as follows: 500 participants will earn 0.001 BTC each as third place winners; 10 second place winners will receive 0.01 BTC each; and the single top winner will be awarded the grand prize of 0.1 BTC.Quests, rewards, and rabbit NFTsRoad to Rich was introduced earlier this month by OK Cashbag, a popular customer rewards system offered by SK Planet. Road to Rich offers users daily quests involving rabbit character NFTs. Successful completion of these tasks allows users to gain various benefits, such as OK Cashbag points, which can be used at hypermarkets, restaurant chains, and other partner businesses. To participate in Road to Rich, users need to install the UPTN Station, a decentralized wallet developed by SK Planet, which allows storage, retrieval, and transfer of NFTs.According to a report by local news outlet Newspim, Oh Se-jin, CEO of Korbit, expressed the crypto exchange’s excitement about participating in the expansion of SK Planet’s Web3 ecosystem. Oh said that Korbit is committed to collaborating with SK Planet to deliver more convenient and valuable services to customers in the Web3 space.