Mt. Gox edging closer to BTC payouts sparks market fears

KISA to establish blockchain trust framework for public servicesThe Korea Internet & Security Agency (KISA) is developing a system called the Korea-Blockchain Trust Framework (K-BTF) to facilitate the development and operation of blockchain-based public services, said Lee Kang-hyo, a senior official at KISA, during the 2023 Blockchain Grand Week on Wednesday (local time).Blockchain Grand Week is an event hosted by the Ministry of Science and ICT and jointly organized by the National IT Industry Promotion Agency (NIPA), the Korea Internet and Security Agency (KISA) and the Institute of Information and Communications Technology Planning and Evaluation (IITP) to promote the value of blockchain technology in enhancing trust in the digital age.Photo by Philipp Katzenberger on UnsplashPrevious roadblocksKISA has executed over 100 blockchain pilot projects over the last five years, but only a few have been carried out due to significant costs and interoperability barriers between services. According to the agency, it costs KRW 450 million (approximately $348,000) to carry out one project. Therefore, it has shifted its focus to making development easier and supporting data interoperability between services.“Developing blockchain-based public services entails building a blockchain platform, developing services and connecting them with government legacy systems,” Lee explained. “Blockchain developer APIs are becoming standardized overseas, and we thought it was time for us to leverage such advantages as well.”Another challenge was that previous blockchain-based public or governmental services did not offer smooth user experiences (UX), often requiring the installation of separate wallets or applications with each use.Bringing cost-efficient, user-friendly public blockchain servicesTo address these issues, KISA decided to focus on three key areas for building K-BTF — cost reduction, convenient development and usability — with an overall groundwork that covers interfaces, services and security while minimizing intrusion into the private sector.Once the K-BTF is established, government agencies will be able to easily plan and operate blockchain-assisted services such as decentralized identifiers (DIDs) and non-fungible tokens (NFTs). The costs for development will be determined based on how much a given service is used instead of the original base cost of KRW 450 million.Also, public institutions tend to go through staffing changes quite often, and building services under K-BTF will enable governmental operations to run normally without any roadblocks or inconveniences caused by such changes.Lee went on to mention that although a wide array of services can be built on the framework, there will be basic requirements in terms of functionality, performance and security that must be fulfilled for a service to run on it. To verify this, the KISA established a testing and certification system that utilizes its Cloud Security Assurance Program (CSAP) certification system and the Information Security Management System (ISMS).To improve usability, the framework will require users to install only one digital wallet that stores digital forms of identification and various authentication certificates.The KISA is set to start working on the K-BTF next year. Notably, it plans to create a governance system consisting of government agencies — those that are the demand clients for the framework –, private corporations and related experts. Six core services that will employ K-BTF have already been selected after a review of 34 pilot projects proposed in 2021 and 2022 and major national blockchain projects from six overseas countries. These six services are NFTs, DIDs, data origin authentication, data history tracking, Blockchain as a Service (BaaS) and digital wallets.Lee emphasized that the goal of the K-BTF is to derive services that can be used by the public sector within regulatory and technological boundaries.

LDP Working Group Proposes Web3 Industry Plan to Japan’s Prime MinisterJapan’s ruling Liberal Democratic Party (LDP) announced that its Working Group for Digital Society Promotion presented a proposal related to the Web3 industry to Prime Minister Kishida Fumio on Tuesday. The information was made public on the party’s website and later reported by the Korean crypto media outlet Tokenpost.Photo by Jezael Melgoza on UnsplashImproved crypto regulationsThe comprehensive 35-page study favorably reviewed the enhanced cryptocurrency regulations implemented by the Japanese government following the 2014 Mt. Gox breach and the 2018 Coincheck hack. The study credits these improved regulations for nurturing Japan’s robust Web3 ecosystem, which received global attention amidst the recent crypto winter. This term refers to a period marked by a sustained downturn in cryptocurrency values.Japanese crypto exchanges demonstrated prudence by refraining from listing most of the problematic tokens on their platforms, thereby averting panic within the market. This cautious approach was supported by Japanese law, which mandates crypto exchanges to securely store customers’ staked tokens separately. As a result, they were shielded from the repercussions of the FTX bankruptcy, which arose due to a liquidity crisis of FTT, the global crypto exchange’s native token.Significance of security tokensThe paper optimistically projected that Japan could lead the way in passing through the crypto winter ahead of other countries, citing the nation’s track record of overcoming numerous challenges in the industry. The authors highlighted the exit of speculative projects from the sector, balanced by the rise and continuous growth of new blockchain-based businesses. The report underscored the significance of tradable security tokens, which leverage blockchain technology to represent assets or rights.The adaptable nature of blockchain technology was emphasized, particularly its potential to incentivize social activities like volunteering. This versatility enables the broader public to actively participate in monitoring and addressing issues related to deteriorating infrastructure, thereby reducing associated management costs across society.Crypto taxationThe proposal also addressed the issue of crypto taxation, arguing for enhancements to the token investment environment to bolster blockchain-driven businesses. Currently, Japan taxes tokens held by corporations, discouraging domestic investment and stifling the growth of the Japanese Web3 ecosystem. To rectify this, the paper suggested exempting tokens issued by a third party from taxation if they are not intended for short-term trading.Moreover, the authors addressed the high taxation rates facing retail investors in Japan, which can reach up to 55% on income from crypto trading. This stricter tax regime compared to other countries has led many taxpayers to seek investment opportunities abroad. The authors suggested improvements to create a more investor-friendly environment.Token listing procedureThe proposal also included recommendations concerning token listings. In Japan, crypto exchanges are currently obligated to undergo a preliminary review conducted by the Japan Virtual and Crypto Assets Exchange Association (JVCEA) before listing tokens. It was suggested that the review process should be further refined to enhance efficiency.Yen stablecoinsThe authors emphasized the importance of introducing and circulating yen stablecoins to foster the growth of the Japanese Web3 industry, necessitating the development of a sustainable business model for these stablecoins.Content & Web3Furthermore, the proposal underscored the need for clear guidelines to discourage gambling behaviors and promote responsible usage within the NFT space. It advocated for the establishment of an industry organization bridging the content industry and the Web3 industry, which would facilitate collaboration and collective efforts towards a robust NFT ecosystem in Japan. Measures to protect Japanese content and data from unauthorized monetization by foreign entities were also recommended.According to an industry official who spoke with Tokenpost, Japan’s extensive preparations for the Web3 initiative have instilled confidence in the sector. The official highlighted that the country is currently exploring ways to establish connections between these new projects and existing industries, with the goal of maximizing their economic potential and generating fruitful outcomes.

Upbit Adds Polygon Staking ServiceDunamu, the blockchain and fintech firm that operates South Korea’s largest cryptocurrency exchange Upbit, announced on Wednesday (local time) the addition of Polygon’s MATIC to Upbit’s staking service, now available via the Upbit website and mobile application.Photo by GuerrillaBuzz on UnsplashStaking is a service where users entrust their cryptocurrency to a blockchain network to boost its security and receive virtual assets as rewards. The virtual assets deposited by staking users are used in the transaction verification process of generating new blocks in the blockchain network of the respective asset. Users are then rewarded with virtual assets for their participation in the process.Polygon is an Ethereum Layer 2 scaling solution that allows developers to build various decentralized applications (DApps) within the Ethereum ecosystem. Its native token is called MATIC.Expanded staking optionsAny Upbit user who has completed the Know Your Customer (KYC) process and enabled two-factor authentication can participate in staking on Upbit. The minimum staking amount is 2.7 MATIC. Users who participate in staking receive rewards once every day. They can also unstake their tokens at any time they want.“At Upbit, we utilize our world-class security measures, robust infrastructure, and years of technological expertise to operate validators and stake users’ assets for them,” the exchange said. “Users’ crypto assets that are used in staking are safely stored in a cold wallet.”Dunamu officially launched the Upbit Staking service in January of last year, serving as an intermediary in the complex staking process. The service aims to facilitate the convenient and secure staking of virtual assets. With the latest addition of Polygon, the exchange now supports a total of five staking options, namely Ethereum, Cosmos, Cardano, Solana, and Polygon.New NFT collectionsThe exchange’s non-fungible token (NFT) marketplace, Upbit NFT, also recently opened trading, deposits, and withdrawals for new NFT collections based on Ethereum and Polygon. To celebrate this additional functionality, Upbit NFT will conduct Ethereum giveaway events for lucky participants until next Wednesday.