OKX shores up App security following bug discovery

Lee Bok-hyun, the governor of South Korea’s Financial Supervisory Service (FSS), is set to have a meeting with Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), in May. The purpose of their meeting is to discuss whether to classify non-fungible tokens (NFTs) as virtual assets. Currently, NFTs are not seen as virtual assets in Korea, but there is a high likelihood of them being acknowledged as such following the meeting in May, local financial media outlet Edaily reported.Photo by Andrey Metelev on UnsplashLack of definition for NFTsAn NFT is a digital certificate of authenticity that is not fungible or replicable. NFTs tokenize content or assets of various types – from images, music, videos, games and artworks to real-estates – by assigning a unique token ID to them. Many see 2018 as the year NFT technology was first introduced.  Despite its wide range of applications, no legal definition has been made for NFTs. Some view NFTs as technology, and others as virtual assets or securities. The Korean government decided not to recognize NFTs as virtual assets under the Virtual Asset Protection Act (Virtual Asset Act), effective in July. Behind this decision is a perception that NFTs are less likely to pose significant risks to the market, as a large portion of NFTs are now traded by collectors seeking to expand their private collections.  However, NFTs are increasingly seen as speculative destinations by many investors over time, as prices of virtual assets including BTC surge. This shift backs the local movement to recognize NFTs as well as spot bitcoin ETFs as virtual assets. Opposition from NFT businessesBlockchain industry insiders say defining NFTs is of utmost importance, noting that classifying NFTs as virtual assets headfirst could deal a heavy blow to businesses in this sector. One finance insider mentioned that defining NFTs comes down to understanding their purposes and how they are utilized. If NFTs are primarily used for speculative purposes or as currency, they could be recognized as virtual assets, the person said.  The biggest resistance is coming from NFT-related businesses. That is because recognizing NFTs as virtual assets would require these businesses to obtain a virtual asset service provider (VASP) license from the financial authority, which takes significant costs and workforce in the process. A CEO of a blockchain startup, who preferred to remain anonymous, expressed concerns about the possibility of NFTs becoming virtual assets, saying that such recognition would enable NFT transaction tracing, potentially leading to severe violations of human rights. While many industry insiders expect that the financial authorities will bring NFTs under the forthcoming Virtual Asset Act, the FSS stated that no decisions have been made regarding details of the upcoming meeting with the U.S. SEC. 

Koscom, the technology subsidiary of the nation’s sole securities exchange operator Korea Exchange, has partnered with LG CNS, an information technology service provider, to launch a joint security token platform, according to a Koscom announcement. Task and tech allianceThe collaboration between Koscom and Korean conglomerate LG Group’s affiliate aims to gain a competitive advantage in the increasingly crowded security token market. On Monday, Koscom signed a memorandum of understanding with LG CNS in Seoul to form a task and technology alliance for security token projects.The partnership will combine Koscom’s expertise in building tech-based capital market infrastructure with LG CNS’s blockchain technology to produce fruitful outcomes. The joint project intends to provide distributed ledgers and a joint platform for the issuance and distribution of security tokens. Securities firms operating their own platforms can also choose to use its distributed ledgers. Koscom’s preparationSince last year, Koscom has been conducting research in security token offering and has formed a working group with eight securities firms that have their own security token teams. The working group has been hosting seminars regularly since the second half of last year, and on April 4, Koscom revealed its project plan to 25 other Korean securities firms. LG CNS’s readinessLG CNS has been conducting research and development of security token technologies since last year and has complied with the Korean regulatory framework. The company manages a consortium blockchain network and has completed the development of key technologies for security token services, such as highly secure wallets.Using its corporate blockchain platform Monachain, LG CNS has achieved success in developing multiple projects, such as a pilot for central bank digital currencies involving NH Bank and Woori Bank and a non-fungible token (NFT) trading system for Bithumb Meta, a subsidiary of the major Korean crypto exchange Bithumb.Meanwhile, Koscom will support security token projects of not only securities companies but also fractional investment firms and banks. Currently, Koscom is in talks with relevant entities about building infrastructure.

Binance Introduces Dedicated Trading Platform in JapanGlobal cryptocurrency exchange Binance made an announcement on Friday regarding its plans to establish a new trading platform exclusively for residents of Japan.The move is in compliance with Japanese laws and regulations, and a demonstration of the company coming into line with Japan’s legal and regulatory framework relative to crypto assets and crypto asset trading. While specific details such as the platform’s launch date are yet to be disclosed, Binance has assured its Japanese customers that this information will be provided in the near future.Photo by Bagus Pangestu on PexelsPlatform transitionIn terms of scheduling, we do know that a new know your customer (KYC) verification process will be available after August 1, to migrate to the new local platform for existing Japanese users on the global platform. As part of the transition process, Binance will be sending out information to Japanese residents who currently utilize their global trading platform. This communication will include instructions on procedures including further information on identity verification.To facilitate a smooth transition, Binance’s global trading platform will cease providing services to Japanese residents on November 30, 2023. Additionally, there are plans to change the company name from Sakura Exchange Bitcoin to “Binance Japan Co., Ltd.”This development marks Binance’s initial foray into the Japanese market firmly under its own brand. In November 2022, the company entered the country by acquiring Sakura Exchange Bitcoin (SEBC). The forthcoming trading platform, dedicated exclusively to domestic residents, represents the first step in Binance’s strategic approach to the Japanese market.The new services on the platform are set to launch during the summer, with future expansion plans to broaden that offering further. Binance also intends to introduce initiatives in Japan that leverage its ecosystem, including the provision of free educational resources through “Binance Academy” to promote Web3 education.Service offeringThe newly created entity will offer crypto spot trading with fiat deposit and withdrawal facility to its Japanese customers. Crypto lending products will be provided through a digital asset earn program. For those who like to dollar cost average (DCA), an automated recurring purchase feature will be provided.In 2021, Binance introduced an NFT marketplace and that will be a service that it will also extend to its Japanese customers. Upon launch of the dedicated service, crypto derivative trading will not be offered although it is understood that it may be offered at a later stage. Derivatives are likely to be under much closer scrutiny by the Japanese regulator than Binance’s other products.It is worth noting that Binance had previously received a warning from the Financial Services Agency (FSA) for offering cryptocurrency trading services to Japanese residents without proper registration. With its full-fledged entry into the Japanese market, it remains to be seen what impact this move will have. Will it accelerate the regulatory landscape and the adoption of Web3 technology in Japan from a global perspective?Additionally, how smoothly will Binance be able to acquire new accounts while competing with domestic business operators? These developments warrant close attention as they unfold.