Category Archives: Asia

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Seoul Examines Military Implications of Blockchain

Seoul Examines Military Implications of Blockchain

The South Korean government has announced it is to launch a pilot which will examine the possibility of integrating blockchain solutions into the country’s defense industry.

The Defense Acquisition Program Administration (DAPA) is planning a USD 530,000 spend for each of the proposed projects aimed at encouraging both small and large defense companies to tender plans.

British news outlet Jane’s Information Group, a British publishing company specializing in military, aerospace and transportation topics, has commented that the project proposals are in line with South Korea’s Fourth Industrial Revolution (4IR) plans. This includes the Defense Industry Development Plan which has targeted emerging technologies such as robotics, artificial intelligence (AI), autonomous systems and big data analytics.

South Korea’s latest move follows those by other nations, notably the US and Russia, to develop their defense strategies by including blockchain solutions in a number of areas, primarily in communications.

Recently the US agency responsible for the development of emerging technologies for use by the military, the Defence Advanced Research Projects Agency (DARPA), sent out a request for information (RFI) on aspects of permissionless distributed consensus protocols.

DARPA is clearly keen to utilize blockchain in a defense strategy; this renewed interest in blockchain technology marks a return to new communications tech, as two years ago DARPA was reported as working on a blockchain based communications platform resilient to cyber-attacks, with self-destruct messaging.

Earlier this year, the US overseas military personnel announced a voting system via a blockchain mobile app so that servicemen could vote in midterm elections. In total, 144 military personnel stationed overseas from 24 counties cast their ballots on a mobile, blockchain-based platform called Voatz.

 

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Malaysia: Government Still Undecided About Cryptocurrency

Malaysia: Government Still Undecided About Cryptocurrency

The Federal Territory Minister in Malaysia Khalid Abdul Samad has said that the current status of cryptocurrency in the country is undecided. He made the comment during a charity event organized by Pertubuhan Kebajikan Insaniah Srikandi Malaysia.

In the comment, he said: “At the moment, the answer is neither legal nor illegal as the situation is unclear.” This was in response to a question about the legal status of cryptocurrency.

Samad was involved in the development and launch of the controversial Harapan Coin – a project dubbed the ‘world’s first crypto-politic ICO’ – said to be a platform that will revolutionize Malaysian politics. He disclosed that he was not appointed as finance minister, but the federal territory minister, which made crypto regulations hardly a subject particular to his jurisdiction. “As the matter is not under my jurisdiction, I cannot push too much,” he said.

However, Samad reportedly proposed the adoption of Harapan Coin to Malaysia’s Central Bank, the Bank Negara Malaysia (BNM) and Prime Minister Tun Dr. Mahathir Mohamad. However, questions have been raised about the functional and clarity of purpose of the Harapan Coin by a select few, including former Prime Minister Datuk Seri Najib Razak.

In November last year, the finance minister of Malaysia Lim Guan Eng confirmed that a digital asset regulatory framework is scheduled to be released in the first quarter of 2019. This regulatory framework, which has been in motion for over a year now was intended to help the cryptocurrency industry without compromising on their financial system.

The report in November further suggested that the regulatory framework will most certainly include standards for both cryptocurrency exchanges and initial coin offering (ICO).

For now, any project that intends to issue cryptocurrency in Malaysia would have to go through the country’s central bank, Bank Negara Malaysia (BNM). More so, cryptocurrency exchanges have been reporting their data to the bank in order to forge a system to watch for money laundering activities. However, the Bank has stated explicitly that this in no way provides a certification of services by the exchange.

So far, the development of the industry has leaned more to the blockchain scope and while the regulatory stance of the financial watchdog is still underway, blockchain use cases are still spreading, this includes the recently developed remittance system and the proposed blockchain-based degree verification system.

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South Korea Supports Blockchain Development With Tax Incentive

South Korea Supports Blockchain Development With Tax Incentive

The government of South Korea has taken an initiative to boost the development of blockchain industry in the country by adding the sector to the fields of research and development eligible for tax credit, as reported earlier this week by the Ministry of Strategy and Finance.

The Ministry of Strategy and Finance had announced the proposed amendments to the enforcement decree of the 2018 tax law and that it will be in effect this February.

Accordingly, the R&D tax incentive will allow blockchain companies to benefit from a tax deductions subsidy of 30-40% and 20-30% of research and development expenses for both small enterprises, and large and medium-sized enterprises respectively. This is subject to the research and development tax relief program adopted by the country through a tax hybrid R&D credit and volume-based investment credit.

The current tax deduction rates for large corporations stands at 0-2% while that of medium scale enterprise stands at 8-15% and for small scale enterprises 25%.

South Korea continues to show a favorable inclination towards building the blockchain space and encouraging a robust and foolproof cryptocurrency business in the nation.

Recently, the government released the results of an assessment on 35 cryptocurrency exchanges based on an 85-point checklist to ensure that these exchanges have what it takes to serve the investors and traders of the Asian community. 7 out of them were given the ‘green tick’ on all 85 pointers, while those with shortcomings were asked to update their systems to the standards acceptable by the regulator.

Last September, the Korean government made efforts to support blockchain development by engaging with startups. “The meeting was part of the government’s efforts to engage with businesses in the 10 key ICT sectors of the Fourth Industrial Revolution,” reports Business Korea.

As for cryptocurrency and ICO tax laws, reports have it that the country is still in the processing of formulating one that promotes growth of the whole industry.

 

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Asia and Australia: Crypto and Blockchain News Roundup 5th to 11th January 2019

Asia

Asia and Australia

Welcome to another weekly blockchain news roundup from around the world. Here, we present to you all the latest Bitcoin news, continent by continent and country by country.

China

Government to Implement New Blockchain Laws to Monitor Content: The Cyberspace Administration of China has outlined new guidelines for Blockchain content regulation in the country. The new set of regulations called the Blockchain Information Management Regulations will be enforced from 15 February of this year.

The basic idea of the new regulations is to give the Chinese government a driving seat when it comes to regulating blockchain-related content. Non-compliance with the new regulations may result in fines up to USD 4,420.

Japan

Regulator Denies ETF Rumours: Top Japanese Financial Regulator Financial Services Authority (FSA) has denied rumors that it was considering Bitcoin Exchange Traded Funds (ETFs). The statement contradicts earlier reports by Bloomberg that claimed that the top financial authority was considering accepting Bitcoin ETFs.

While Japan is one of the most progressive countries when it comes to cryptocurrencies and blockchain development, ETFs are currently banned in the country and numerous entities are working to influence the government to allow it.

In other news, the FSA is looking to crack down on unregistered cryptocurrency exchanges in the country. The move will eventually bring everyone under the Financial Instruments and Exchange Act.

South Korea

7 Cryptocurrency Exchanges Pass Security Clearance: According to the South Korean Ministry of Science and ICT, only seven cryptocurrency exchanges have passed their detailed security inspection checklist. 

The extensive security survey was undertaken from September to December 2018 and covered key areas including administrative security, operational environment security, network and account security, database & backup security, and wallet security. Out of a total of 21 exchanges up for the security compliance, only seven could clear the test. The seven cleared exchanges include  Upbit, Bithumb, Gopax, Korbit, Coinone, Hanbitco, and Huobi Korea.

It remains to be seen how the uncleared cryptocurrency exchanges will be held accountable for their lack of robust security apparatus.

Pakistan/Malaysia

Pakistan Telecom Company Announces Development of a Blockchain-based Remittance System Between Pakistan and Malaysia: The first blockchain-based remittance system has been introduced by the Telenor group and is set to operate between Malaysia and Pakistan.

The new technology will be supported by AliPay’s blockchain technology and will serve the sizeable number of overseas Pakistani remittances based in Malaysia to send money back to their country.

India

Government May Legalize Cryptocurrencies with Strict Conditions: The Indian government may legalize cryptocurrencies in the country but with strict conditions according to the proceedings of a government committee formed to look into the matter.

The government committee is meeting twice per week to discuss the issue. A comprehensive financial report will be filed with The Ministry of Finance by February 2019. While it is clear that some members of the committee understand the need for allowing cryptocurrencies, yet, no final decision on the matter has been made.

In other news, India is seeking a skilled labor force for speeding up the pace of adoption of emerging technologies including Distributed Ledger and Artificial Intelligence.

New Zealand

Fake News Website Connects ex-PM with Cryptocurrencies: A fake news website was promoting Bitcoin-related investments using the image of ex-Prime Minister of the country.

The website Crypto Vault was already flagged before for its content including ads to promote fake services. The ex-PM in question John Keys has denied these rumors and also claimed that he has no investments in Bitcoin or any other cryptocurrency.

Kiwi scammers seem to have taken a liking to using the image of politicians to promote shady projects. The current prime minister of the country was also on the wrong end of a similar situation in October 2018.

 

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Mongolian Mining Takes a Leap Forward with Japanese Investment

Mongolian Mining Takes a Leap Forward with Japanese Investment

With the announcement that Japanese company Ginco is expanding its mining capacity, Mongolia is set to experience a surge in crypto mining in 2019, despite the downturn in Chinese mining activity.

The company best known for its Japanese crypto wallet is tripling its output this year from 600 to 1600 miners in the Chinese province.

The news was unexpected given recent developments within the Chinese mining sector. Bitmain, who as of 2018 had 11 mining farms operating in China was forced to lay off 3000 of its staff in December having grown from 1000 employees. A recent statement from the world’s largest maker of cryptocurrency mining chips suggested it would be laying off up to 50 percent of its staff this year.

Ginco’s news comes just a day after Bitmain released more bad news for investors in China that it was stopping the development of their mega mining project in Texas due to the sustained bear market which dragged on through most of 2018.

The news from the Japanese company is certainly good news for Mongolia but not without its difficulties, suggests CEO Yuma Furubayashi who doesn’t necessarily see an easy ride ahead. He claimed that: “The business environment is increasingly harsh, but we can still produce a profit.”

The CEO also suggested that the company had other projects in the pipeline apart from the Mongolian mining expansion; such projects include providing a repair service for existing mining devices.

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Coincheck Granted Exchange License a Year After Major Hack

Coincheck Granted Exchange License a Year After Major Hack

Japanese cryptocurrency exchange Coincheck has been granted an operating license a year from its notorious hack that resulted in a loss of USD 530 million.

Effective immediately as of 11 January 2019, Coincheck is now registered with the Kanto Financial Bureau. This will be its first time operating as a licensed cryptocurrency exchange.

In January 2018, Coincheck suffered a security breach which resulted in the theft of USD 530 million in New Economy Movement (NEM) tokens. The firm has said that it has since then adequately addressed any and all security concerns with the platform.

In order to receive the license, Coincheck was required to meet both Japan’s regulatory requirements and prove to the regulators that internal controls had been established to adequately protect investors on its platform. Coincheck claims it has established ”concrete internal controls” and a ”basic philosophy on risk management” to ensure another breach will not take place.

The management of the exchange has also been adjusted, with chief executive officer Koichiro Wada and chief operating officer Yusuke Otsuka both being replaced within the company. Privacy coins such as Dash and Monero were required to be delisted from the platform before it received its license, with the Japanese regulators citing that they failed to comply with anti-money laundering regulations.

Even with an official license granted, Coincheck will still have to win back its reputation to bring in new traders and re-establish itself as a secure platform.

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Beijing to Enforce New Blockchain Laws to Monitor Internet Content

Beijing to Enforce New Blockchain Laws to Monitor Internet Content

Cyberspace Administration of China (CAC), the state body for internet censorship, has announced new guidelines for controlling the blockchain space in the country. The plan for tighter control over blockchain service providers was introduced in October of last year.

Beijing’s Blockchain Information Service Management Regulations will take effect from 15 February, showing how urgently the government wants to curb content which it feels might be detrimental to the state.

The new regulation has singled out blockchain providers, despite published comments over the past year coming from Beijing that blockchain has huge potential to streamline business. These regulations state that providers cannot “produce, duplicate, publish, [or] disseminate” banned content under state law.

More specifically, the new rules have defined blockchain providers as “entities or nodes” providing public information through desktop or mobile sites. Any companies providing these services will need to register with the CAC within ten days providing their names, server addresses, service types, and server addresses. No compliance with the CAC will face fines between USD 737 to USD 4,420.

The new regulations have a broad range, also incorporating news reporting, publishing, education, and pharmaceutical services, which would all be required to obtain licenses before registering with the CAC.

China has strict internet laws and the space is highly monitored by the state. It is thought that the tightening of control by the CAC is a response to those who have used blockchain tech in the past in order to circumvent Beijing’s control over the country’s internet content.

The most recent violation of China’s strict internet laws occurred in July 2018 when pharmaceutical company Changsheng Biotechnology was put in the spotlight online by bloggers who listed the firm’s transgressions on the Ethereum blockchain.

 

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7 South Korean Exchanges Pass Security Inspection Checklist

7 South Korean Exchanges Pass Security Inspection Checklist

The South Korean Ministry of Science and ICT reported yesterday that only seven cryptocurrency exchanges including Upbit, Bithumb, Gopax, Korbit, Coinone, Hanbitco, and Huobi Korea have passed the security inspection checklist.

A survey was conducted by the Ministry of Science and ICT, the Korea Internet & Security Agency and the Ministry of Economy and Finance, during the period of September to December of 2018 to evaluate the security performance of cryptocurrency exchanges in the country.

The inspection covered the following areas: administrative security, operational environment security, network and account security, database & backup security, and wallet security.

Out of 21 cryptocurrency exchanges that were inspected earlier last year for security compliance, only seven passed the improvement recommendation, leaving the remaining 14 labeled as “vulnerable” to one or more of the 85 security checkpoints. “The 14 exchanges are vulnerable to hacking attacks at all times because of poor security,” the ministry said. Moreover, 17 new exchanges that were inspected for the first time, did not meet the cutoff either. This brings the total of exchanges scrutinized to 38.

South Korea is home to over 100 cryptocurrency exchanges and due to the number of security breaches that have led to the loss of millions of dollars of user assets on exchanges, the Korean government decided to carry out a survey to determine the fitness level of these exchanges.

It would seem the agency expects more of this hacks to occur this year, and are prepared to mitigate the severity of the damage if not completely averted through these security inspections. Director of information security policy at the Ministry of Information and Communication Oh Yong-soo said: “This year, cyber attacks targeting encrypted money are expected to continue”. Yet, most of the inspected exchanges “are still vulnerable”, and there a lot more exchanges are out there whose security status is currently unknown.

The South Korean nation has been pulling resources to ensure the standardization of the industry, a part of that effort includes setting up a representative committee to oversee legislation for the industry and suggest possible adaptive measures to national laws. Though leaning on the side of caution, so far, the nation appears to be a friendlier territory for the industry than some other Asian countries.

Last month in Japan, the Financial Services Agency (FSA) reported having received 190 cryptocurrency license applications from exchanges as 2019 approached. Regulation and standardization seem to be the way forward in the industry.

 

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Bitmain CEOs to Make Way for New Faces

Crypto Mining Rig Giant Bitmain May Appoint New CEO Soon

Top cryptocurrency mining rig maker Bitmain may be in for some administrative changes soon, with Wang Haichao, currently head of product engineering, tipped to be the new CEO in place of co-CEOs Wu Jihan and Zhan Ketuan, as reported by South China Morning Post.

Currently, no public announcement has been made by the company or any of the parties involved about this major managerial shift. However, the source said people familiar with the matter revealed that this change will reportedly have co-founders Wu Jihan and Zhan Ketuan step aside from managing daily affairs of the company. More so, while they remain as members of the board, they will still be involved in calling the shots on big decisions as “Wu and Zhan, who founded Bitmain in 2013, hold 21% and 37% of the company respectively, according to the IPO prospectus”. Wang is said to have assumed the new role in preparation for the transition since December last year.

Changes happening in the company, including the layoff of about 50% of its staff that occurred last month, are likely due to the bear market conditions that lasted throughout 2018. More so, it was reported that the incumbent decision makers had trouble agreeing with each other and that at one time, Wu was allegedly expelled from the board, though this was later dismissed as a false claim.

With the ongoing reshuffling of administrative chairs, operations may look green for the company once more, as currently, Bitmain has been through a few setbacks and may need to make some strategic changes to make headways in 2019. It is in the process of being listed for an initial public offering (IPO) with the Hong Kong Stock Exchange (HKEX), though it hasn’t been favorable so far, probably due to the volatile conditions of the cryptocurrency market and “essentially the lack of regulation”, according to HKEX.

Wang has compelling hands-on experience in software programming and product engineering. Having graduated from Beijing’s Tsinghua University – the MIT analog in China – he worked as an engineer with Availink, from 2010 to 2017. He seems to be an excellent candidate, being familiar with the operations of the company with respect to product management. It would be of public interest to both shareholders and consumers to see what changes the company will experience during Wang’s tenure. BitcoinNews will track the changes as they unfold.

 

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90-Year-Old Hong Kong Billionaire “Superman” Backs Bakkt

90-Year-Old Hong Kong Billionaire

The owner of venture capital firm Horizon Ventures, Li Ka-shing, has become the latest proponent of cryptocurrency platform Bakkt investing heavily in Bitcoin. Bitcoin backers abound around the world but experience wise with his 90 years, Hong Kong billionaire Li Ka-shing, known affectionally as Superman, is way up there.

The Bakkt project has delayed its launch twice in a row with a timeline now set for early 2019, in line with CFTC’s process and timeline.

Bakkt has already announced its successful first seed funding round of USD 182 million with 14 investors and partners listed to have participated. Intercontinental Exchange, Goldfinch Partners, Boston Consulting Group, Microsoft’s Venture Capital arm and Pantera Capital were among participants.

Li, who is said to be worth about USD 34.9 billion, has made some major forays into the cryptocurrency space late in his business career, including Bitpay in 2013 and Blockstream in 2016, through his company Horizon Ventures. Bitpay also attracted another “Superman”, British Virgin entrepreneur Sir Richard Branston, who also put about USD 30 million of his money into the Bitcoin payment service provider headquartered in Atlanta.

The Bakkt Bitcoin platform, which is being developed with New York Stock Exchange owner Intercontinental Exchange, Starbucks, and Microsoft, will offer Bitcoin futures trading once the launch date has been announced, opening up the opportunity for users to buy, sell, store and spend cryptocurrencies through MS Cloud. Global coffee chain Starbucks will allow customers to convert Bitcoin and other cryptocurrencies to US dollars to make purchases in their stores.

 

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