Carrieverse teams up with KODA to provide investor protection

Korean Crypto Exchange Operator Airdrops NFTs to Raise Biodiversity AwarenessDunamu, the operator of Upbit, one of South Korea’s leading cryptocurrency exchanges, made an announcement on Thursday regarding its initiative to raise awareness about biodiversity threatened by climate change. In collaboration with four organizations affiliated with the Ministry of Environment, Dunamu plans to transform Climate-Sensitive Biological Indicator Species (CBIS) into non-fungible tokens (NFTs), as reported by news media Daily Hankook.Photo by Alin Andersen on UnsplashAffected biological speciesCBIS encompasses biological species that have experienced significant changes in their seasonal activities, distribution areas, and population sizes due to climate change. These species require ongoing research and management by the government. The National Institute of Biological Resources (NIBR) of the Ministry of Environment compiled a list of 100 such species in July 2010. This list was created to facilitate the efficient monitoring of climate change’s impact on the distribution and vulnerability of biological species on the Korean Peninsula.The initiative is part of the Resource Circulation Climate Action Campaign organized by Dunamu with four environment agencies, namely the NIBR, the Nakdonggang National Institute of Biological Resources (NNIBR), the Honam National Institute of Biological Resources (HNIBR), and the National Institute of Ecology (NIE). Its key objective is to protect the habitats of plants and animals while raising awareness about biodiversity conservation.Species vanishing every 15 minutesWith climate change causing the extinction of one species every 15 minutes, the project aims to raise awareness about this distressing trend. In pursuit of this goal, 15 NFT editions will be distributed through four separate events over the course of a year, commencing on May 19. The participating artists include Jjawook, an artist with developmental disabilities; Jin Kwan-woo, an artist renowned for depicting endangered species using the Korean alphabet Hangul; and members of the Botanical Artists Society of Korea.NFT release planThe initial set of NFTs to be airdropped includes three species: the warbling white-eye, the common camellia, and the house holly-fern. These species have historically inhabited coastal regions of islands. However, as a result of climate change, their distribution and habitat have been shifting towards inland or northern areas.To obtain CBIS NFTs, individuals can visit Dunamu’s metaverse platform 2ndblock. Once there, they will have the opportunity to engage in a resource collection mission. Upon successfully completing the mission, users will receive an NFT gift code. To claim their NFTs, they need to register the provided NFT gift code on the Upbit NFT marketplace.Dunamu CEO Lee Sirgoo expressed his hope that the project would have a positive impact on raising awareness about biodiversity conservation on the Korean Peninsula, which is under threat from climate change. He stated that Dunamu intends to continue utilizing its technology and expertise in diverse ways to contribute to a sustainable future and environment.HNIBR Director Ryu Tae-chul believes that the campaign will encourage recycling in communities to reduce carbon emissions and serve as an inspiration for individuals to actively engage in initiatives that promote a sustainable and biologically diverse planet.

Hong Kong and Israel Collaborate to Expand CBDC Access Beyond BanksIn a collaborative effort, the Hong Kong Monetary Authority (HKMA), the Bank of Israel (BoI), and the Bank of International Settlements (BIS) Innovation Hub have jointly released a comprehensive report on Project Sela, a central bank digital currency (CBDC) initiative.Photo by POURIA 🦋 on UnsplashBroadening the role of intermediariesThe report was published to the BIS website on Tuesday. In keeping with the trend of many CBDC projects, Project Sela is characterized by a robust public-private partnership. However, its particular focus lies in broadening the spectrum of intermediaries, aiming to offer retail CBDC services through a more diverse array of service providers, thereby reducing dependency on traditional banks and major payment providers.Andrew Abir, Deputy Governor of the Bank of Israel, emphasized the importance of fostering a dynamic and open ecosystem with a wide variety of service providers. He stated:“Competition and innovation require a flourishing and open ecosystem with many different types of service providers. This was our initial goal in Project Sela as a proof-of-concept, and the project proved the feasibility of the model we had in mind.”Involving retail banksIn a previous model explored through Hong Kong’s Project Aurum, retail banks were entrusted with customer-facing tasks while maintaining the central bank’s operation of the wholesale ledger for the eHKD. In contrast, Project Sela introduces a novel approach where the central bank operates the retail ledger — a model akin to Israel’s digital shekel.The primary actors in Project Sela, known as Access Enablers (AEs), notably do not have control over CBDC balances, distinguishing them from conventional payment providers. Moreover, AEs are not required to maintain liquidity to support CBDC services. Their role encompasses facilitating user onboarding and CBDC access, fulfilling know-your-customer (KYC) and compliance obligations, and routing payments. The role of banks and other “funding institutions” primarily revolves around enabling the conversion of cash and deposits into CBDC.The rationale behind this approach is rooted in the emergence of technological advancements in open banking and DeFi, which have demonstrated the potential to disentangle financial services by granting users greater access to their financial data and control over their own funds.Enabling participation among the unbankedProject Sela envisions the unbanked population utilizing ATMs to convert cash into CBDC. A similar approach has recently been taken by the Chinese authorities. In the resort city of Sanya, authorities have introduced e-CNY ATMs in order to enable e-CNY access for foreign tourists.However, it is noteworthy that in many countries, the primary function of ATMs is to dispense cash rather than accept it. Consequently, the inclusion of AEs could pose challenges to traditional banking institutions, as CBDC adoption could potentially impact bank deposits.Privacy and cybersecurity considerations are implicated within Project Sela. As the central bank operates the retail ledger, ensuring the confidentiality of personal information becomes imperative. To safeguard privacy, AEs employ a hashing mechanism to obfuscate personal identifiers, although the report does not delve into the subject in detail.While Bank of Israel Governor Amir Yaron admitted that a CBDC can never be anonymous, he claimed that “if we choose to issue a digital cash shekel, it will provide at least as much privacy as other digital means of payment.”

The Need to Distinguish Between Security and Non-Security Virtual AssetsWith the recent enactment of the Virtual Asset User Protection Bill in South Korea, there is a need to lay out criteria for determining whether virtual assets qualify as securities, says Kim Ja-bong, a senior research fellow at the Korea Institute of Finance, in his report titled “The Implications of Determining Which Virtual Assets Constitute Securities and Investor Protection” released on Saturday.Photo by Shubham Dhage on UnsplashThe implications of the Virtual Asset User Protection ActThe Virtual Asset User Protection Act — which will take effect in July of next year — aims to protect customer assets, establish regulations against unfair trading practices, and enforce penalties. Notably, it will target virtual assets that are not securities, deeming it necessary for regulators to determine if virtual assets qualify as securities or not in order to enforce the bill. Assets with characteristics of securities will fall under the jurisdiction of the Capital Markets Act.Therefore, if the Virtual Asset User Protection Act does not provide sufficient investor protection, issuers may be incentivized to issue non-security assets rather than security assets to avoid the regulations of the Capital Markets Act. This further necessitates the act of distinguishing between virtual assets that are securities versus those that are not.Determining if a virtual asset is a security or notThere are two approaches to do this, according to Kim: the passive approach, which avoids considering a virtual asset as a security whenever possible, and the active approach, which treats a virtual asset as a security whenever applicable.He argues that it is better to focus on whether an investment contract qualifies as a security if it is considered an investment contract, rather than simply selecting a specific approach.Furthermore, the nature of virtual assets renders them unbound by national borders, so it is necessary to establish assessment criteria that correspond with international standards, such as those used in the US and Europe.This is especially important because if the criteria differ from international standards, there is a risk of domestic investors suffering damages due to an issuer’s pursuit of regulatory arbitrage between countries.Equitable recognition and potential for security tokensAccording to Kim, the importance of determining whether virtual assets are securities lies in ensuring that security tokens receive the same recognition and trading treatment as traditional securities such as stocks. With such a measure, security token offerings can serve as an efficient and reliable method for raising funds. Although there may be concerns that such a regulation may hinder the development of virtual assets, it may well be an opportunity for security tokens to be qualified and trusted as high-quality financial instruments just like existing securities, Kim claims.Even for virtual assets that are not considered securities, there are many types of assets that are financial in nature, such as e-money tokens — therefore, it is necessary to actively protect investors in non-security virtual assets through financial regulations such as reinforcing disclosure obligations, which is being done in the EU through the Markets in Crypto-Assets Regulation (MiCA).Empowering regulators for enhanced investor protection and market integrityKim underscored that investor protection and healthy growth of the virtual asset market are made possible mainly through expanding regulators’ authority to protect economic interests and prevent damages. The author also suggested institutional reforms that grant regulators substantial authority, which would enhance their ability to protect investors effectively and provide compensation for damages.He added that regulators should also have the authority to enforce liability for damages or impose civil penalties for unfair trading practices conducted using classified information.