United Nations report cites popularity of USDT for fraud in Southeast Asia

Research Center Highlights Overvaluation in Overseas Crypto Holdings Reported to Korean Tax AgencyThe Korbit Research Center, affiliated with one of South Korea’s leading cryptocurrency exchanges, Korbit, has raised questions about the size of overseas cryptocurrency holdings reported by Korean individuals and businesses to the National Tax Service.Photo by REDioACTIVE on PixabayThe issue of market-making activitiesThe center noted that following the 2017 initial coin offering (ICO) boom, many enterprises that issued cryptocurrencies through offshore entities might still be holding onto their native tokens. This would have resulted from their inability to distribute these tokens to the market after the speculative bubble burst. The center believes these reported values could have been influenced by the issuers’ market-making activities, possibly inflating their worth.According to the National Tax Service, Korean individuals and corporations hold a total of KRW 130.8 trillion (around $98 billion) in overseas crypto accounts. Notably, 73% (KRW 120 trillion) of this sum is held by 73 corporate entities.Highlighting a critical aspect of cryptocurrency valuation, the Korbit Research Center pointed out that when tokens are priced based on market-making activities, they may be overvalued. They further underscored that even if the true value of overseas holdings by these entities is only a tenth of the reported sum, a figure like KRW 12 trillion is still substantial.Retail investors seeking overseas optionsFurthermore, the center touched on retail investors, noting that the KRW 10 trillion in their offshore accounts indicates a gap in services offered by Korean crypto enterprises. It suggests that individual investors might be exploring foreign markets due to domestic limitations like the absence of derivatives and lending options.Given the borderless nature of the crypto industry, Korean individuals readily turn to overseas services that cater to their needs. The Korbit Research Center estimates a KRW 10 trillion unmet demand in the domestic crypto sector, suggesting that stringent local regulations might be driving capital outflows.

China Furthers Efforts to Shape the MetaverseFindings by US political media outlet POLITICO suggest that Chinese authorities and state-owned companies are seeking to mold the metaverse in line with existing systems in China such as the country’s social credit scoring system.The concept of the metaverse entails a network of interconnected immersive virtual worlds powered by virtual reality, augmented reality, and simulations. Development in this area is centered around applications such as online gaming and virtual events.Photo by Hanson Lu on UnsplashDigital Identity SystemIn a report published on Sunday, POLITICO referenced recently drafted proposals put forward by China Mobile, a state-owned telecoms operator. The proposals outline a “Digital Identity System” for users within online virtual worlds and metaverses.These proposals recommend the use of “natural characteristics” and “social characteristics” within digital IDs, encompassing personal data such as occupation, “identifiable signs,” and other attributes. Moreover, they suggest storing this information “permanently” and sharing it with law enforcement to ensure order and safety within the virtual realm.Setting agreed benchmarks for emerging techThe proposals present a hypothetical scenario involving a disruptive user named Tom, who causes turmoil in the metaverse. The digital identity system, according to these proposals, would facilitate prompt identification and punishment by law enforcement.These discussions are occurring within the framework of the International Telecommunication Union (ITU), a United Nations (UN) agency responsible for establishing global technology standards. This strategy echoes China’s endeavor to set worldwide benchmarks for emerging technologies.The ITU, as a UN agency, holds significant sway in defining global telecommunications and technology infrastructure standards. Given that the US and China have quite different outlooks when it comes to technology governance, particularly the future development of the internet and related technologies, the ITU has become a means through which common ground can be found and differences resolved.Upcoming vote on proposalsChina Mobile’s proposals, presented during the ITU’s metaverse focus group meeting, are poised to be voted on during the next meeting in October in Geneva. The company is the largest mobile operator by subscriber base. Demonstrative of ongoing tensions that exist between the US and China, the company was delisted from the New York Stock Exchange in 2021 following a US executive order.Chinese organizations are reportedly submitting more proposals than their Western counterparts, demonstrating that China is very much taking a lead in metaverse development. It’s evident that there is a clear strategy for China to establish itself in furthering this technology.In May, Alibaba Cloud, a subsidiary of Chinese e-commerce giant Alibaba Group, entered into a partnership with layer one blockchain Avalanche to better enable businesses to deploy metaverses. Around the same time, an administrative body within China’s Henan Province established a $22 million dollar investment fund, focused on financing metaverse-related ventures.Later that month, the city of Zhengzhou announced a set of policy proposals designed to support the growth and development of metaverse companies in the region.Within the Chinese autonomous territory of Hong Kong too, there has been plenty of metaverse-related activity. Metaverse start-up Artifact Labs completed a funding round with a view towards expanding its operations. The city is home to Animoca Brands, a prominent player in metaverse-related development.

Hashed CEO Emphasizes South Korea’s Potential to Lead Mass Adoption of Web3 in AsiaSimon Kim, CEO of Asian blockchain investment firm Hashed, highlighted South Korea’s potential to pioneer the mass adoption of Web3 during his keynote speech on Tuesday at Impact, the main conference of Korea Blockchain Week 2023 held at the Shilla Hotel in Seoul.“Korea possesses the strength to lead despite its small size,” he said. “The country will serve as the turning point for Web3.”Photo by Daniel Bernard on UnsplashTech trailblazerKim elaborated on the unique characteristics of Korea’s Web3 ecosystem, citing the so-called “kimchi premium” phenomenon, where cryptocurrencies in Korea are valued higher than other global exchanges, as well as the country’s role in leading altcoin price fluctuations and bull markets.Furthermore, Korea also has one of the world’s fastest and most widespread high-speed Internet networks, with nearly 100% coverage and a smartphone penetration rate exceeding 97%.According to Kim, digital natives are the driving force behind many inventions that have marked the country as a longstanding hub of innovation and digitization. Among these inventions is the world’s first online game, The Kingdom of the Winds, and the world’s first avatar-based social platform Freechal, as well as the pioneering e-sports league StarCraft League and game item trading platform itemBay.In particular, Freechal can be deemed as a forerunner to the current trend of using non-fungible tokens (NFTs) as profile pictures on social media. itemBay also serves as the precursor to both virtual asset and NFT exchanges. These types of early ventures are inextricably linked to the rise of cryptocurrency exchanges.Kim went on to underscore Korea’s prowess in the gaming industry, mentioning popular games like Dungeon Fighter Online, MapleStory, and PlayerUnknown’s Battlegrounds (PUBG). He noted that many local game developers have already established Web3 studios and are actively preparing to transition to the world of Web3 gaming. The K-pop industry has also been incorporating Web3 technology in various projects.Merging hemispheresHashed has been actively investing in projects since 2016, with over 150 projects in its extensive portfolio. Of these projects, approximately 71% of those based in Western countries are related to infrastructure, while 67% of those based in Eastern countries are related to digital content and apps. The company ultimately aims to serve as a bridge connecting the East and West by acting as a network builder to facilitate this exchange, Kim said.