Ground X Teams Up with Oasys for Digital Wallet and SDK Collaboration

Amid the ongoing cryptocurrency market slowdown, a South Korean analyst said a rebound will hinge on effective policy measures and sustainable business models.Photo by Kanchanara on UnsplashAnalyst urges policy and profitabilityAccording to an analysis by iM Securities researcher Yang Hyun-kyung, cited by local outlet Etoday, the current downturn stems from several factors: a liquidity crunch in short-term funding markets, a strengthening U.S. dollar, rising risk aversion, and a prevailing narrative of a cyclical correction. Yang noted that a strong dollar typically drains market momentum, as tighter global liquidity prompts investors to deleverage and reduce exposure to risk assets. He added that growing uncertainty over potential U.S. rate cuts in December has further fueled risk aversion among institutional investors, putting selling pressure on both major cryptocurrencies and altcoins. While the expected resolution of the U.S. government shutdown may create a more favorable environment for a modest technical rebound, Yang argued that the crypto sector still needs to develop profitable business models and gain growth momentum through supportive policy measures. Brokerage frames crypto as diversifierDespite the current headwinds, another Korean brokerage firm released a quarterly report framing digital tokens as an emerging alternative asset class. According to Etoday, Hanwha Investment & Securities CEO Jang Byung-ho wrote in the report that the primary goal of retail investment is to preserve purchasing power. He drew a parallel to the U.S. market in the 1980s, when bond investors would have seen their returns erode had they failed to recognize equities as a viable investment vehicle. Citing that lesson, Jang suggested investors consider digital assets as a new pillar for portfolio diversification. Diverging approaches from global central banksThese evolving viewpoints on crypto come against a complex global macroeconomic backdrop. From one perspective, the People’s Bank of China (PBOC) has begun quantitative easing (QE). Otavio Costa, a macro strategist at Crescat Capital, shared a chart on X showing that the value of the PBOC’s balance sheet assets is on track to surpass that of the U.S. Federal Reserve. Costa predicted the Fed would soon follow suit, stressing that investors are underexposed to hard assets. This potential easing contrasts with speculation that the Bank of Japan (BOJ) may raise interest rates next month. One BOJ board member noted at a recent policy meeting that most conditions for a hike have already been met and added that a move is likely once wage negotiations scheduled for spring point to sustained pay growth, as long as the global economy avoids major disruptions. These diverging policy directions have mixed implications for the crypto market. Typically, dovish measures like QE are seen as supportive, as increased liquidity tends to boost risk appetite. Rate hikes, by contrast, withdraw liquidity from the system, limiting the upside for risk assets like digital tokens. As economic conditions evolve and the industry adapts, investors will be watching closely to see how these shifts shape the market’s next moves. 

Sam Altman’s iris-scanning project Worldcoin (WLD) has resumed its service in South Korea following two months of suspended operation, according to Digital Today. The project utilizes a device dubbed “Orbs” to collect personal biometric data from users who agreed to have their iris scanned by the machine.  The service was suspended after a number of complaints were filed against Worldcoin in February for its data collection practices. In the following development, Korea’s Personal Information Protection Committee (PIPC) launched an investigation into Worldcoin to examine if any local privacy law has been violated by Worldcoin. This led to suspension of six Orbs installed in several areas in Seoul, including Yeouido and Yeoksam areas.  While these Orbs have resumed operations, the investigation is still underway. The South Korean regulators are yet to decide what legal measures to take regarding Worldcoin, according to the press. Photo by Amanda Dalbjörn on UnsplashProof of personhood: Crypto tokens for simply being human Meanwhile, Worldcoin argues that it is impossible to identify an individual person by solely relying on the iris bio-data. It claims that the data will be only used in providing “proof of personhood” to distinguish humans from artificial intelligence (AI). The project aims to offer its WLD token to users “simply for being human” as universal basic income, whose jobs will be potentially replaced by artificial general intelligence (AGI) in the future.  A Worldcoin official added that the project has addressed potential privacy concerns by eliminating data custody processes and allowing users to remove their sensitive data at will. However, major countries including France and Spain have issued orders to suspend Worldcoin’s operation within their jurisdictions, citing risks involving personal data tracking and breaches.  A PIPC official stated that the government authority will continue the investigation and take further action in line with the Personal Information Protection Act.  

Korea to introduce more effective guidelines for crypto listing and delistingThe South Korean cryptocurrency industry is expected to see standardized guidelines for listing and delisting cryptocurrencies on trading platforms by the first half of next year, according to a report by local news outlet ETnews. This move is a response to the current self-regulatory guidelines among cryptocurrency exchanges, which have been found inadequate in effectively managing the listing and delisting of digital currencies.Photo by Mathew Schwartz on UnsplashA dedicated task forceThe Financial Supervisory Service (FSS) in South Korea has reportedly initiated a task force dedicated to creating standardized rules and regulations for cryptocurrency listing and delisting. This team includes both government officials and experts from the private sector.An official from the FSS noted that the task force is aiming to present the final version of the guidelines to the National Assembly before the implementation of the Virtual Asset User Protection Act in July of next year. Operating under the oversight of the financial regulator, these standardized guidelines are expected to enhance their effectiveness and aid crypto businesses in maintaining self-regulation.Frequent listing and delistingThe decision by the Korean financial authorities to formulate these guidelines was prompted by the frequent listing and delisting of cryptocurrencies on trading platforms, which pose risks and cause confusion for customers. An earlier report from the Financial Services Commission’s Financial Intelligence Unit (FIU) highlighted that the number of tokens listed in the first half of 2023 increased to 169, up from 95 in the first half of 2022, while the number of delisted tokens rose from 78 to 115.The WEMIX controversyThe cycle of listing, delisting, and relisting cryptocurrencies has sparked controversies, with WEMIX serving as a notable example. WEMIX is the native token of blockchain gaming company Wemade’s Wemix blockchain network. In December, WEMIX was collectively delisted by the Digital Asset eXchange Alliance (DAXA), which includes South Korea’s top five crypto exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax. The reason cited was Wemade’s breach of disclosure rules regarding token distribution.However, in a turn of events, Coinone relisted WEMIX on its platform in February this year. Following this, DAXA established self-regulatory guidelines concerning the relisting of tokens. Despite these guidelines, Gopax also proceeded to relist WEMIX earlier this month. As a result of this move, DAXA criticized Gopax for not complying with the self-regulatory guidelines. Gopax faced a restriction on its voting rights within the alliance for three months, and a cautionary note was issued against them.An industry insider noted that despite the efforts of DAXA, their self-regulation measures for cryptocurrency trading services, including the listing process, have not been particularly effective. However, the upcoming rules are expected to be more impactful as they will be in line with the forthcoming Virtual Asset User Protection Act.