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Pro-Crypto Bill Proposed by South Korean Lawmaker

Pro-Crypto Bill Proposed by South Korean Lawmaker

A South Korean bill promoting cryptocurrency trading has been introduced in a bid to establish a robust digital asset ecosystem.

Crypto-bill

According to local media sources cited by BusinessTelegraph, South Korean lawmaker and National Assembly Political Committee member, Kim Sun-dong, announced the initiation of what he called the ‘Digital Asset Trading Promotion Act’. Elaborating on the intentions of the bill, Kim said in a press statement:

“‘The Digital Asset Trading Promotion Act’, includes a comprehensive plan for establishing a guideline for promoting the development of virtual currency exchanges and blockchain technology, tax reduction and exemption, measures against hacking damage, and prevention of market disturbances.”

Kim echoed the concerns that many have with regard to domestic crypto businesses leaving South Korea due to unaccommodating laws and regulations for digital assets. More specifically, Kim referred to the recent sale of cryptocurrency exchange giant Bithumb to a Singapore-based consortium. He acknowledged that domestic cryptocurrency transactions made up a significant percentage of domestic stock market trades at the beginning of this year, highlighting the negative economic impacts such moves can have.

Referring to the stifling impacts of over-regulation, Kim said:

“The government is focusing only on the risk of virtual currency and concentrating only on the crackdown of illegal activities… In order to lead the global trend of blockchain technology development, it is necessary to prepare laws and regulations as soon as possible.”

Crypto-exchanges

Due to the significant hacks that South Korean exchanges suffered earlier this year, regulators have sought to remedy the situation by increasing security and compliance measures. Though the move seemed positive at the time, it has eventually lead to exchanges being denied tax perks and financial incentives that are typically offered to venture capital firms as well as domestic small and medium-sized enterprises (SMEs). This has proven extremely unpopular among South Korea’s blockchain lobbyist groups and entrepreneurs.

Notably, the bill outlines that exchanges will be required to assume liability for customers crypto losses in the event of a hack.

As per the bill, “virtual content with an apparent value such as online money, points, game items and virtual currencies as digital assets”. It goes on to define exchange operators as digital asset trading companies, adding:

“Those who want to operate a digital asset trading business should have more than KRW 3 billion won [USD 2.66 million] in capital, enough manpower, computerized systems, and physical equipment to be approved by the Financial Services Commission [FSC].”

Blockchain nation

South Korea has been pressing tirelessly to establish laws and regulations that not only provide domestic startups with the grounding they need to thrive, but also establish whether or not initial coin offerings (ICOs) will be a part of the domestic blockchain ecosystem.

That said, South Korea is extraordinarily in favor of adopting blockchain technologies into public sector projects, voting systems, and energy grids. Should cryptocurrencies and ICOs fail to find the legitimacy they seek, the domestic blockchain industry should thrive as a whole, tokenized or not.

 

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Italy Flexes Regulatory Muscle with Non-Compliant Crypto Exchanges

Italian regulators, the Commissione Nazionale per le Società e la Borsa (CONSOB), is tightening its grip on cryptocurrency firms who don’t comply with the commission’s regulations.

Three companies have been cited in a CONSOB statement as receiving suspensions from operating their services, two companies receiving three-month suspensions and one banned from operating for an indefinite period spanning months.

Richmond Investing was the first to come under the regulator’s microscope, principally for failing to meet Italian laws regarding the operation of cryptocurrency online trading platforms. Richmond failed to register to as a mediator offering finance-related services contravening the principal Consolidated Law on Finance (TUF).

Another company, Crypton Limited, was penalized for contravening another law applying to cryptocurrency trading, accused of making inappropriate promotions and advertisements. Crypton was hit with a 3-month operating suspension, as was Eagle Bit Trade for apparently offering wildcat trading packages to Italian investors.

Cease and desist actions are not uncommon as a global repositioning is underway regarding cryptocurrency regulation with most countries now re-examining how they plan to regulate the space for both the protection of the public. Also, there is a growing need to offer greater clarity to exchanges and fintech companies regarding operating protocols across jurisdictions.

Italy is also in this position as it continues to work towards establishing a formal framework for cryptocurrency exchanges to work within, including, like many other nations, addressing digital currency tax laws as they apply to the public.

Italy recently announced that it was about to enter the European Blockchain Partnership, an organization formed to promote blockchain technology between member states.

In doing so, Italy became the 27th nation to sign the agreement since its conception earlier this year in April. The partnership has grown from 22 nations since its launch. Initially, the EU had launched an EU Blockchain Observatory and Forum, subsequently investing more than EUR 80 million in blockchain projects. A further EUR 300 million has been allocated over the next four years.

 

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Japanese Committee Fights to Simplify Crypto Tax

One Japanese political committee has taken it upon itself to fight for a simplified cryptocurrency tax plan.

The Government Taxation Investigation Committee (GTIC), which serves as an advisory body to the Prime Minister, began discussions on Wednesday to propose a simplified cryptocurrency tax payment plan, which they say is currently unnecessarily complex in Japan.

The committee argues that because there are many kinds of cryptocurrency profits that require taxation alongside capital gains. Taxpayers are failing to declare the correct total in their tax returns as the process is simply too complex.

The profit obtained by selling cryptocurrency is currently accounted for as miscellaneous income, with crypto earnings over JPY 200,000 (USD 1,783) subject to income tax.

However, cryptocurrency is taxed not only on the gains from the disparity between the acquisition price and the selling price but also on the profit obtained by its exchange with other virtual currency or conversion to fiat. Even if a product is purchased using the digital currency which then accrues an unexpected financial appreciation, it remains subject to taxation.

Another issue arises as the method of storing the transaction history data necessary for the profit calculation is different with each cryptocurrency exchange company, meaning it is particularly challenging for Japanese taxpayers to configure the correct totals.

Offering a solution

GTIC says that a whole new system is required that can accurately reflect the income and profit in an accessible way.

Local news outlet Sankei reports that officials from GTIC shared in a press conference: “Since it is necessary to take into consideration the framework other than the taxation system and business practices as well, we will hold a small expert meeting and outside opinions. I will deepen the discussion while listening. ”

The future system would be required to “grasp the asset price appropriately.”

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People’s Bank of China Looks for Crypto Experts to Join Ranks

China’s central bank is seeking four cryptocurrency specialists that can assist the bank in developing a platform to facilitate crypto transactions.

The Digital Money Institute at the People’s Bank of China (PBoC) appears to be looking to expand its operations further into the field of cryptocurrency with its new recruits, two of whom are required to join as engineers, as well as two experts in economic law and finance.

In an advertisement placed on PBoC’s website, the engineers are said to be needed to develop both a big data platform and a chip processor. Specific responsibilities are listed, including developing the required software systems, encryption technology and security models, as well as research and development of the terminal chip technology that will facilitate the cryptocurrency transactions.

The legal and financial experts are required for legal research aspects, cited as including analysis of risk management and economic mechanisms.

In the wake of recent reports that PBoC is looking to launch its own stable coin, the job advertisement also lists policy research on ”legal digital currency” as a requirement of the successful applicant.

Earlier this week, an op-ed published by PBoC affiliate publication CN Finance called for China to launch its own yuan-backed stablecoin in order to prevent any negative externalities of US-backed stablecoins on other fiats.

The article outlines the benefit of having such a stablecoin: ”[it] uses the advantages of blockchain technology as much as possible, while trying not to challenge the legal currency, basically bypasses the commercial bank, and implements global cross-border payment.”

The PBoc has issued multiple warnings to investors regarding the dangers of cryptocurrency trading and has issued a national ban. The CN Finance op-ed advises that the ban remains firm alongside a yuan stablecoin.

 

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Tax-Free Decade Proposed for Ukrainian Crypto Holders

An Independent MP in Ukraine is to propose a new bill to parliament which, if passed, would entitle Ukrainian crypto holders and miners advantageous tax breaks over the next decade.

The bill suggests that holders of cryptocurrencies would receive a 10-year break from reporting their earning on tax returns and miners would be able to waive VAT charges on the sales of any mining equipment.

The Bill listed as 9083-1 is entitled ‘On Amending the Tax Code of Ukraine on the taxation of transactions with virtual assets in Ukraine’. It also aims to define cryptocurrency and mining for the purpose of future legislation. The MP clearly a strong supporter of emerging technologies, including blockchain, commenting in parliament:

“I believe that we should impose a 10-year moratorium on taxing this area. We should streamline and legalize this huge [industry] which will become a driving force of the new economy. These people represent the creative class… We have to provide for their development and stop them from emigrating.”

Ukraine has been particularly busy with its crypto legislation this year and this new bill is significant given that the government is currently looking to pass another bill that would tax both cryptocurrency operations and assets. That bill, if passed, would impose 5% tax on individuals and companies utilizing cryptocurrencies and tokens, with businesses that claim crypto-related profits paying 18% tax on the total amount.

On top of this proposed reclarification of the county’s current tax laws as they apply to digital currencies, the Ukraine National Securities and Stock Market Commission (NSMCS) has indicated that the Financial Stability Council (FSC) is considering further crypto regulation as “an important first step in building a consensus among government agencies and financial regulators”.

The head of the NSMCS Timur Khromaev believes that new regulatory framework is needed to ensure the crypto space in Ukraine can guarantee a high-level of interaction between all participating players and market transparency.

Currently, no licenses are required in Ukraine for conducting crypto mining activities and the government has displayed a largely positive approach to supporting emerging technologies such as blockchain and cryptocurrency.

 

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Crypto Related Twitter Account Being Sold for Millions of USD?

A crypto related Twitter account with 82,000 followers, @Crypto_Bitlord, says they were approached to sell their account for 672 Bitcoins which is roughly USD 4.7 million. The account owner states that they are now the 5th crypto Twitter that has agreed to sell their account for large amounts of Bitcoin.

Got an offer to sell this account for 657 $BTC and I just couldn’t refuse, not in this bear market.

The person seems to be coming after big accounts. I’m the 5th to sell up now.

Handing over the keys to new owner next week and will announce fresh handle 👍

— ฿ITLORD🍭 (@Crypto_Bitlord) August 30, 2018

It seems improbable that someone would pay so much money for a Twitter account. If this was true, perhaps the person buying the accounts intends to use them to promote initial coin offerings (ICOs) and other crypto investments. It is well-known that some Twitter users, like John McAfee, are being paid to promote ICOs. John McAfee says he is paid USD 100,000 to tweet about ICOs to his 800,000+ followers. Considering that though, it doesn’t really make sense that someone would pay USD 4.7 million for an account with 82,000 followers for promotional purposes, instead of just paying USD 100,000 to reach 800,000+ followers.

In a worst case scenario, perhaps the person buying these accounts intends to scam the followers by leveraging the reputations of these well-developed Twitter accounts. That seems unlikely though since it would take some incredibly prolific scamming to make up for the USD cost of the Twitter accounts, and well before that, the account would probably be considered dangerous.

One user, @WhalePanda, says they sold their Twitter account for 1,000 bitcoins, but has already made another account @ProfFaustus to troll Bitcoin Cash enthusiasts. This is obviously a joke since @ProfFaustus is Craig Wright, one of the biggest advocates of Bitcoin Cash.

Same here. Sold mine for 1000 BTC. I like round numbers.
I’ve already been preparing my new account for a while now. It’s @ProfFaustus and it’ll be mostly a satire account to troll BCashers.

— WhalePanda (@WhalePanda) August 30, 2018

Although this is a joke, some people are taking it seriously and illustrates how the initial post from @Crypto_Bitlord could also be untrue even if some people think it’s the truth. Time will tell, @Crypto_Bitlord says they are handing over the account next week and will announce their new account name at that time.

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Kurt Russell Thriller “Crypto” to be Released 2019

Talks are underway with producers with plans to release a movie next year called “Crypto” starring actor Kurt Russell.

The film, already in post production, is reportedly a crime-based thriller following in the footsteps of films such as Wall Street, Wolf of Wall Street and The Big Short which focussed on the economic crisis of 2008.

Such films about the financial sector are becoming increasingly popular and tend to get good box office ratings as a result. Martin Scorsese’s The Wolf of Wall Street quickly became the prolific filmmaker’s top-grossing film at the worldwide box office shortly after its release.

Cryptocurrency is not an area which has been ignored as a newcomer to the financial movie genre as plans are afoot for two movies covering the topic apart from “Crypto”. Actor Johnny Depp, of Edward Scissorhands and Pirates of the Caribbean fame, has been linked with a new film said to be a biopic of the late cryptocurrency billionaire Matthew Mellon. Although it hasn’t been confirmed, sources reportedly told the Mail Online that Depp is understood to be interested in the role and that “there is a screenplay being shopped”.

There is a rumor circulating that the soon-to-be-released biography about crypto twins Cameron and Tyler Winklevoss called “Bitcoin Billionaires” is already being considered for a movie deal even before its release, according to the New York Post.

The latest revelation is clearly more than a rumor, having reached post-production and a predicted release date. “Crypto” is reported to also star Beau Knapp from The Nice Guys and Alexis Bledel from The Handmaid’s Tale.

The producers of the film, Jordan Beckerman of Yale Productions and Jordan Tale Levine, are not reputed to be crypto investors but apparently are fans, so wish to do the film justice treating the subject accurately and fairly. Levine explained:

“Both of us have dabbled (with crypto). I don’t know if either of us would consider ourselves experts. It was really our writers who fleshed out the topic and dove into the research. They were the ones who really became experts to make sure the film was authentic.”

However, it must be mentioned for die-hard fans that cryptocurrency is by no means the main topic of the film. Co-producer Beckerman commented, “It’s more broad than that… It doesn’t particularly focus on any particular coin.” He said that the movie does involve corruption, crime and “a smattering of crypto”.

Kurt Russell is sure to give the film some leverage at the box office on its release next year.

 

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Vitalik Buterin: Focus on Crypto Adoption, Not ETFs

Ethereum co-founder Vitalik Buterin Tweeted out his critique of those focusing too much on ETF approval, pointing out the accessibility of purchasing cryptocurrency should be focused on to promote ”actual adoption”.’

I think there’s too much emphasis on BTC/ETH/whatever ETFs, and not enough emphasis on making it easier for people to buy $5 to $100 in cryptocurrency via cards at corner stores. The former is better for pumping price, but the latter is much better for actual adoption.

— Vitalik Non-giver of Ether (@VitalikButerin) July 29, 2018

His Tweet cites specifically ”making it easier for people to buy USD 5 to USD 100 in cryptocurrency via cards at corner stores” as the more important task for the cryptocurrency community while saying ETFs would be better merely for pumping the price rather than increased adoption.

The statement received mixed reactions from the crypto-Twittersphere.

One user disagreed with the necessity of using cryptocurrencies for everyday transactions, saying that fiat currencies work perfectly well for that. Another argued that being paid in cryptocurrency would be a more effective way of spurring adoption than being able to purchase small quantities easily with fiat.

Largely, the sentiment online appeared at odds with Buterin’s statement, either championing the benefits of ETF approval or critiquing the use of cryptocurrency payments for everyday purchases and arguing this should not be its primary use.

Circle co-founder and CEO Jeremy Allaire said recently that a significant catalyst for the industry and cryptocurrency adoption has been the development of hundreds of thousands of blockchain-backed dApps, frequently created by companies that operate with their own tokenized ecosystem.

Blockchain testing has certainly helped push forward the industry in a positive light, with institutions such as NASA and Citi pursuing their own initiatives.

Will we see ETF approval?

The US Securities and Exchange Commission’s (SEC) recent clarification that neither Bitcoin nor Ethereum were securities has been welcomed by the majority of cryptocurrency users, who believe this is a positive indication that an ETF may be approved.

However, the SEC cited several issues that meant it could not approve the Winklevoss twins’ ETF proposal for the time being. These problems primarily include the threat of price manipulation of the market, hence an inability to protect investors, as well as the issue that most Bitcoin trading is done overseas with no regulatory oversight.

If the market becomes regulated to the SEC’s standards, it has said it would consider approving a Bitcoin ETF, although it seems very unlikely that standardized regulations could be adopted globally by governments. As well as this, most Bitcoin exchanges would not give the SEC all of their private information as requested, particularly the most prominent exchanges which are not based in the US.

 

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Possible Addition of 6 Cryptos, New Coinbase Blog Post Reveals

Coinbase recently published a new blog post stating the possible addition of several new cryptocurrencies to their platform.

The assets in consideration are Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC), and 0x (ZRX).  The announcement was made at the same time within Coinbase and publicly to remain transparent, and perhaps to avoid a similar situation when Bitcoin Cash was added.

These assets were considered based on the criteria Coinbase has laid out in their Digital Asset Framework. The blog post goes into further details, discussing specific reasons why each asset stood out to the Coinbase team.

The platform says adding any or all of the above tokens will require “additional exploratory work” and places no promises on listing any of them for trading. This is unlike the Ethereum Classic support that is currently being worked on, due to its technical similarity to Ethereum.

Other caveats are discussed in the blog post as well, such as the possibility of some of the new assets only being available for purchase and sell, with no send/receive functionality enabled. This would give some coins purely investing characteristics, like what Circle is doing with their Circle Invest app.

The last two restrictions the post discusses is the way users maybe able to interact with certain assets: for example, Coinbase may only support deposits and withdrawals from transparent Zcash addresses. This is a likely scenario, in order to be in compliance with any financial regulations that may apply.

Coinbase may also stagnate the launch of these assets in certain regions, most likely testing them in other markets before they are available to the US customers.

No promises have been made on timeline for adding support to these tokens, as they have only discussed the possibility of them being on the platform. But if selected, Coinbase will be making their first expansion into smaller capitalization cryptocurrencies.

With many of Coinbase users being intuitional traders as well, this offers them an exposure to the segment of the crypto-market that was previously untapped.

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Which Countries Are Most Likely to Adopt Bitcoin First?

Bitcoin replacing a country’s government currency would be a huge achievement for cryptocurrency as well as a historical milestone. But which countries are most likely to adopt such a nascent currency?

One of the biggest drivers for adopting a cryptocurrency would be necessity. Countries where citizens experience hyperinflation, political instability, or other factors that shake confidence in a government currency typically see higher demand in alternative currencies like Bitcoin.

Countries possibly adopting Bitcoin on a major scale, for this reason, would be Iran, Venezuela and Argentina, to name a few.

Iran has made headlines with plans to withdraw EUR 300 million from German banks. Rising tension since 2015, when the US left the Nuclear Agreement, has only amplified with Trump entering the presidency.

The tension has only weakened confidence in the Iranian rial, leading to higher than market prices within Iran borders. Couple this with the US sanctions placed restricting liquidity and hyperinflation of 112%, and Bitcoin easily becomes the currency of choice for Iranian citizens.

While rial’s hyperinflation will lead to holders of the currency losing more than half of their value, this is nothing compared to Venezuela’s economic crisis.

A year ago, a cup of coffee in Venezuela was 2,200 Venezuelan bolivar (VEF), or around USD 0.20. Since then, inflation has been rampant, causing that same cup to be sold at VEF 1,400,000, for an effective annual inflation rate above 60,000%.

This has led to an extreme demand for the cryptocurrency; peer-to-peer exchange Localbitcoins shows Venezuela traders selling Bitcoin at rates of VEF 9 billion (USD 75,000) to VEF 19.5 Billion (USD 158,531). Despite these massive premiums and the cryptocurrency experiencing a correction of its own, Bitcoin is still a more attractive option than the fiat currency.

Such an extreme devaluation of the currency makes Venezuela a prime country to embrace Bitcoin wholeheartedly.

Argentina is in a similar situation and currently has the higher interest rate in the world (40%). Continually rising prices coupled with increasing unemployment rates makes Bitcoin a viable currency in this case, over the Argentine peso.

Cashless societies could also be primed for a crypto take over but cryptocurrency needs a lot of refinement before this could become a reality.

Contactless payment methods are already very convenient and with credit cards, even offer cashback rewards and customer protection. For cryptocurrency to penetrate markets like Canada, Sweden and the UK, digital currencies must not only offer similar characteristics but be much better than existing systems.

A good scaling solution needs to put in place as well, in order for Bitcoin (or whatever cryptocurrency a society adopts) to handle the number of transactions.

The third set of countries likely to adopt Bitcoin are the ones that are already open to cryptocurrency-related businesses, regulatory wise.

Countries that fall into this category include Japan, Estonia, Singapore, Australia, and South Korea. Sweden also goes into this category because despite its cashless society, recognizing Bitcoin as a legal form of payment.

Countries that are Bitcoin-friendly will typically have a higher percentage of citizens already exposed and actively using the cryptocurrency, making it far easier for Bitcoin to become widespread.

Being on welcoming turf also allows companies to come in and introduce new use case scenarios for the cryptocurrency, thus improving Bitcoin’s penetration rates.

Bitcoin is a fairly new currency and as more people begin to understand and classify it, more countries will become more receptive to the decentralized money. It will be interesting to see which country becomes to adopt Bitcoin as a dominant currency and if it’s from necessity, convenience or another reasons.

 

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