Category Archives: South Korea

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Busan to use Blockchain to Manage Virtual Power Plant


South Korean news agency, Yonhap News Agency, reports that the government intends to build a blockchain-enabled virtual power plant in Busan.

The KRW 4 billion (USD 3.5 million) project will be located in Busan, the second largest city in the country. It has specifically selected the project in order to promote innovations in the energy sector. The power plant will be using blockchain that will allow residents of the country to take part in it.

A virtual power plant is a distributed energy production facility that multiple energy producers (small to large and even private, individuals) can connect their systems to, thereby creating a cloud-based power plant that can utilize excess and idle capacities of energy production systems to generate and distribute power. The Busan virtual power plant will be designed to integrate the city’s factories, other public energy storage systems and even solar plants.

The project is envisioned by the city government, along with different local firms such as the energy management Nuri Telecom, Busan City Gas, Korean Industrial Complex and the Pusan National University. The project will also be presented in an energy competition in 2019, which will be hosted by Korea Electric Power Company, the largest energy producer in South Korea.

Busan is a central hub of blockchain development in the country. The former financial policy Director General at Financial Services Commission and Busan minister of economic affairs, Yoo Jae-soo, had discussions on the establishment of a special economic zone within the Busan city to help promote, develop and grown blockchain industry in the country.

In June, the Industry-SW ICT Convergence Association, a government agency, had revealed plans on establishing a blockchain sector in the city that is going to be in line with the famous Swiss Crypto Valley.


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South Korea’s Shinhan Bank Considers Blockchain to Mitigate Human Error in Banking

Shinhan Bank Considers Blockchain to Mitigate Human Error in Banking

South Korea’s second-largest commercial bank, Shinhan Bank, has begun working on a blockchain-based angle in reducing human errors in banking processes.

It is the latest in a string of blockchain initiatives being pursued by a growing number of financial institutions as information technology pursues tighter integration with traditional financial services.

An initial step was taken to integrate blockchain with interest rate swap – a complex financial contract – involving the exchange of fixed interest rates from a floating rate or vice versa in order to mitigate the risks of exposure to fluctuations. It appears that Shinhan Bank is the first as a local financial services firm to implement the technology adopted last month.

The bank has found a use for smart contracts in automated processing of derivative transactions, such that tasks handled by bank staff are now conducted through a computer program. The Korean Times reported that this “leaves no room for error thereby improving accuracy and reliability of work products”.

Now, the bank wants to resolve to handle financial record-keeping on the blockchain, as a ledger with immutable and accurately efficient properties. This is expected to improve the overall efficiency of banking operations.

Shinhan Bank has been investing months of research and training of its staff via its blockchain lab department, familiarizing them with blockchain and its applications.

The bank declared: “The program will be expanded after it proves to be stable. We will continue to develop new technology that can be put in place for various departments.”

Some of the departments the bank is seeking to apply the technology to include financing businesses with export or import, lending, derivatives, stocks, bonds, foreign currency exchange or remittance and pension, as well as processes “that require frequent data sharing and verification with outside bodies”.

As reported by another local media outlet about a year ago, Shinhan Bank announced that it was creating a cryptocurrency wallet service for its customers and that it was doing so to leverage the “strong security of the bank and the advantages of cryptocurrency”. It had also formed a partnership with KT platform service in August to develop blockchain technology service.

The blockchain use case in South Korea continues up the trend with expansion from fintech to other industries. Continuous developments in both cryptocurrency and blockchain-related affairs seem to be happening because of the country’s pro-industry policies and incubation support.


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South Korea Startup, New York Hospital Adopt Blockchain for Data Collection

South Korea Startup, New York Hospital Adopt Blockchain for Data Collection

Data collection using available new technologies continues to benefit from the application of DLT, a fact that a Manhattan hospital is discovering for itself through a new collaboration with blockchain startup Medibloc.

The Massachusetts General Hospital (MGH), one of the United States’ top five hospitals, cites its project as being one of the first attempts by a major healthcare institution in the country to connect with a blockchain startup in order to create a system of decentralized patient data.

Using blockchain platforms means that only authorized medical professionals can use the patient data, itself secured by sophisticated cryptography and possibly smart contract technology. This also makes it easier for data sharing among health care specialists, assisting with the digitization of healthcare data across networks.

Currently, the MGH gathers its information independently through different bodies such as insurance companies, and pharmaceutical companies with no guarantee this information can be transferred securely. This could change if MGH can utilize DLT in the way that it wants to. Synho Do, director of the Laboratory of Medical Imaging and Computation, a joint venture of MGH and Harvard Medical School, commented:

“In collaboration with Medibloc, we aim to explore potentials of blockchain technology to provide secure solutions for health information exchange, integrate healthcare AI applications into the day-to-day clinical workflow, and support [a] data sharing and labeling platform for machine learning model development.”

Medibloc itself was born out of the healthcare industry with both of its founders previously working as industry professionals. As doctors, Kho and Eunsol Lee, brought notoriety to their company from industry players, and also from government officials in South Korea, giving Medibloc added credibility. The main asset the startup brings to MGH is the functionality of decentralized information, which hospitals of this size have not explored to date, still preferring to use multiple databases to store and develop data.

Medibloc had formed several Asian partnerships before its latest American project, with eight medical institutions and 14 tech giants now using their services. Plans to begin operating at MGH in the second quarter of 2019 are underway.


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South Korea Contemplates Crypto and ICO Tax Laws

South Korea Contemplates Crypto and ICO Tax Laws

A plan to tax cryptocurrencies and initial coin offerings (ICOs) is underway in South Korea, this according to finance minister nominee Hong Nam-ki.


The Korea Times has reported that the nominee submitted a written answer to the National Assembly on Sunday, 2 December, during his confirmation hearing. According to the article, Hong said that the plan to tax crypto and ICOs would be completed once the taxation infrastructure has been created and furthermore, based on sentiments drawn from international discussions, saying:

“A task force consisting of experts from relevant government agencies including the National Tax Service and the private sector will be formed to examine overseas examples and hammer out the taxation plan.”

Hong rather specifically describes cryptocurrencies as “electronic signs of values issued privately”; he said there are around 2,000 digital tokens being traded on a global level and 160 in South Korea.

He writes, “Cryptocurrencies are a new phenomenon and so there is no internationally agreed regulatory framework… Furthermore, there are such lingering problems as the market overheating and investor protection. Therefore, we need to be careful in building the regulatory framework.”


His words are typical of those who seek to establish an accommodating environment for the technology. Previously, the governor of South Korea’s Financial Supervisory Service (FSS) urged members of the global community to seek out an “international discipline system” for cryptocurrencies and ICOs. In his speech, the governor described the need to encourage financial innovation, while aiming to cool the “overheated speculation” of the markets, minimize consumer risks and tackle illegal activities associated with cryptos.

In August, the South Korean Blockchain Enterprise Promotion Association (BEPA) made calls for the government to act faster in its efforts to regulate blockchain and cryptocurrencies. BEPA criticized the government for giving too much focus to the “negative short-term-side effects” and instead stifling the nation’s ability to compete on the world stage.

Tax perks

There had been previous uproar in South Korea over the government’s decision to exclude cryptocurrency trading platforms from a special tax relief programme for “new-growth technologies“.

Hong offered his thoughts on the matter, believing that the exclusion was due to crypto exchanges being criticized for their vulnerabilities to illegal activities, and this move was a reflection of such sentiments.

He adds: “We will do our utmost to nurture blockchain technology as nine out of the ten business types classified as blockchain-related businesses by Statistics Korea excluding the crypto exchanges can be still acknowledged as venture companies.”

In the following discourse, fears over domestic enterprises moving to other countries soon became a reality when cryptocurrency exchange Bithumb was sold off to a Singapore-based consortium. As a result, a South Korean lawmaker proposed a bill that would provide the structure for the development of exchanges, “tax reduction and exemption” and guidance pertaining to security issues.

With regards to the contentious topic of ICOs, which remain banned with an official decision still pending, Hong said, “We will determine our policy orientations on ICOs with relevant agencies after reviewing the results of the financial regulator’s market survey and getting feedback from experts.”


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Kakao Blockchain Subsidiary Conducts $300 Million Private Token Sale

Kakao Blockchain Subsidiary Conducts 0 Million Private Token Sale

South Korea’s foremost internet firm Kakao has been running a private token sale for its blockchain subsidiary, Ground X, hoping to raise USD 300 million.


The news was broken by local media outlet Hani and according to the report, Kakao is looking to draw funding from foreign investors via the private sale of its KLAY token as part of the Klatyn platform.

While it is a token sale by definition, Kakao states that “it is not an investment recruitment for the general public”, which somewhat differs to the traditional structuring of initial coin offerings (ICOs), which are presently banned and unregulated in South Korea. In March, Kakao had announced the Ground X subsidiary as part of its conglomerate’s businesses strategy “Kakao 3.0”.

At this time, the question as to whether or not there will be an ICO attached to the project was raised and swiftly shot down, though later on in June, Bloomberg reported that Ground X CEO Jason Han had described the prospect of the project seeking “capital and business alliances with consumer-service companies”.

Private sale

The Ground X arm of Kakao was originally set up in Tokyo, Japan. However, the co-CEO of Kakao, Joh Su-yong, had also shot down the rumors of an ICO in March, saying that there were no plans to launch one in either Japanese or Korean territories, which was viewed as a means to circumvent the 2017 ICO ban in South Korea. That said, the move to establish a Tokyo headquarters was more likely to avoid regulations related more specifically to cryptocurrencies.

Kakao also says that it can’t confirm the current size of investment or the nature of investors due to the company requiring “consultation with our partners” in order for such information to be disclosed.

According to Hani sources, the majority of the desired target has been accrued by Ground X, also suggesting that a Chinese venture capital firm may be participating in the token sale:

“The target amount is USD 300 million and Kakao is very close to securing its target. A China-based venture capital executive held a meeting with Ground X in September and, even at the time, Ground X was planning to raise USD 300 million.”

Most recently, Kakao established a significant partnership with stablecoin project Terra, this move was another part of the Ground X project for the purpose of creating a frictionless blockchain payments experience for users. Furthermore, Ground X has also partnered with an Infrastructure-as-a-Service (IaaS) platform named Orbs, a project that is “highly likely” to collaborate with Terra.

Market maturity

The news from Kakao is of little surprise; as the ICO market dwindles ever downward, startups and enterprises are beginning to seek capital from traditional institutions such as incubators, venture capital (VC) firms and hedge funds. According to a study on the matter, this is a sign of market maturity and the “professionalization” of the blockchain industry ecosystem.


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North Korean Cybercriminals Target Individuals After Tighter Crypto Exchange Security

North Korean Cybercriminals Target Individuals After Tighter Crypto Exchange Security

North Korea-based cybercriminals have cast their attention on to individual cryptocurrency investors and away from larger exchanges, according to a report from the South China Morning Post.

Founder of cyber warfare research group IssueMakersLab, Simon Choi, has confirmed the growing change in tactics by cybercriminals from South Korea’s northern neighbor. This, after a step up to tighten security controls by high-value financial institutions and centralized crypto exchanges over past months. According to the Post:

“Direct attacks on exchanges have become harder, so hackers are thinking about alternatively going after individual users with weak security. They targeted staff at the exchanges, but now they are attacking cryptocurrency users directly. With the US, the UN and others imposing sanctions on the North Korean economy, North Korea is in a difficult position economically, and cryptography has come to be seen as a good opportunity.”

Hackers have now begun to infect individuals’ computers with infected email attachments as a means of stealing crypto assets. Once the computer is compromised, the hackers have free range access private files and keys. Kwon Seo-Chul, the CEO of Cuvepia, has discovered 30 such cases of individual cryptocurrency investors being targeted recently. He commented that there may be more just around the corner with all of the cited incidents occurring very recently, since April of this year.

One of the major problems appears to be that there is no way of reporting such attacks, most of which have seen seasoned cybercriminals targeting private South Korean investors. This is resulting in hackers becoming braver and less concerned about intervention from the authorities. Kwon explained that the victims were just “just simple wallet users investing in cryptocurrency” adding, “When cryptocurrency wallets are hacked, there is nowhere one can make complaints, so hackers are increasingly hacking into digital currency accounts.”

South Korea has frequently accused the Pyongyang government of state-backed cybercrime following a number of high profile incidents and a recent increase in North Korea’s cryptocurrency mining activity. NSA cybersecurity official Priscilla Moriuchi asserts:

“North Korea has pursued other avenues for obtaining cryptocurrencies as well, including mining of both Bitcoin and Monero, ransom paid in Bitcoin from the global WannaCry attack in May and even commissioning a cryptocurrency class for North Korean students in November.”

North Korea is currently on the South Korean Exchange giant Bithumb’s list of banned countries after Kim Jong-un’s Pyongyang regime has repeatedly been accused over a period of years of heists and hacks against cryptocurrency exchanges, banks, and multinational organizations in attempts to raise desperately needed hard cash for its failing economy.


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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.


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.”


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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South Korea Chooses Blockchain Voting, New Trials Planned

South Korea’s government has plans to trial an online e-voting system based on blockchain technology.

The plans were announced by the country’s Ministry of Science and ICT and the National Election Commission (NEC). The trial will be carried out by the Seoul National University’s Blockchain Society and the Korea Internet and Security Agency (KISA).

Blockchain voting systems have been trialed in Switzerland recently and have attracted attention from other nations predominantly as a safeguard against fraud and vote rigging. The Japanese city of Tsukuba in the south of that country trialed a system in August using ID swipe cards, then encrypting votes using DLT in order for the public to be able to vote for different tech applications for a government website.

The city of Zug in Switzerland also recently trialed blockchain voting using an eID system to vote on municipal services such annual fireworks displays, digital ID library lending, digital entry ID parking fees, and electronic tax returns.

An Australian startup is supporting transparent voting in Indonesia, a country with a population of 261 million, with a 20-year history of miscalculating voting results. The company, Horizon State, is planning to launch a test case community-voter platform using blockchain on Sumatra which, if successful, will be utilized for both regional and national elections in the future.

South Korea’s system will use mobile and personal computers with gathered data stored on a distributed network which will also allow voters to follow the process and keep abreast of votes as they come in. Following the trial, the NEC will then decide on whether to proceed with a similar system for the country’s online elections, along with the addition of AI and IoT.

Terrestrial use of blockchain clearly isn’t enough for forward-thinking South Korea. In a new development, a South Korean satellite operator has expressed an interest in exploring how blockchain could be utilized within the satellite industry.

The company, KT Sat, boasting 50 years’ experience as South Korea’s sole operator, plans to bring blockchain and cybersecurity companies together through its new workgroup, the KT SAT Eco Alliance, in order to see where blockchain can be integrated into current satellite tech.


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South Korean KT SAT Eying Blockchain for the Satellite Industry

A South Korean satellite operator has expressed an interest in exploring how blockchain could be utilized within the satellite industry.

The company KT SAT boasting 50 years’ experience as Korea’s sole operator plans to bring blockchain and cybersecurity companies together through its new workgroup, the KT SAT Eco Alliance, in order to see where blockchain can be integrated into current satellite tech.

KT SAT provides services using the resources of the group as being a member of KT group. With two satellite launches in 2017, coverage became wider, providing differentiated satellite communication services to its global customers and partners. The company, owned by South Korea-based telecommunications company KT Corporation, is planning events, workshops, and seminar covering IT tech fields such as password security, the blockchain, and maritime satellite communication. KT SAT CEO Han Won-sik says that marketing is another aspect of focus for the company through such activities:

“In order to lead the domestic and global satellite market, we must continue to search for new services through new ICT convergence…we will look for business opportunities that can provide total solutions and platform services.”

Space seems to beckon blockchain. Last month, blockchain firm ConsenSys, which has over 900 employees, acquired Planetary Resources, a partnership which could bring blockchain technology into space “democratizing and decentralizing space endeavors to… unlock untapped human potential.” Planetary Resources, Inc., formerly known as Arkyd Astronautics, is an American company that was formed on 1 January 2009 and reorganized and renamed in 2012. Its stated goal is to “expand Earth’s natural resource base” by developing and deploying the technologies for asteroid mining. ConsenSys Founder and Ethereum Co-Founder Joe Lublin speaking of the acquisition commented::

“Bringing deep space capabilities into the ConsenSys ecosystem reflects our belief in the potential for Ethereum to help humanity craft new societal rule systems through automated trust and guaranteed execution.”

Another company Spacebit Capital has recently launched the world’s first Venture Capital (VC) crypto fund for the space sector with plans to tokenize commercial space missions, moving forward.

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South Korea Adopts Blockchain for Beef Supply Chain

South Korea has further expanded blockchain infrastructure and will now be utilizing the technology in a beef supply chain pilot in order to create transparency for consumers.


First reported by local media outlet Yonhap News, the project will be conducted by the Ministry of Agriculture, Food and Rural Affairs (MAFRA), as well as the Ministry of Science and ICT. It will be piloted in North Jeolla Province by December and after a trial period, it will be officially launched in January 2019 in cattle farms and slaughterhouses.

Like many supply chain systems that are blockchain-based, accountability, transparency, and immutability are core characteristics from which industries such as agriculture will benefit from. Additionally, the upgraded system is anticipated to the reduce costs, time-consumption, and risk of fraud that presently looms over the paper-based reporting system that tracks cattle from birth, slaughter, packaging and distribution.

According to the joint press release from MAFRA and the Ministry of Science and ICT the blockchain platform, all related information and certificates will be stored, enhancing efficiency and credibility.

Blockchain adoption

South Korea is bustling with blockchain projects that are being introduced into many sectors; most recently, the nation’s largest power provider KEPCO unveiled plans to transform energy infrastructure using by blockchain and other technologies to develop microgrids. In doing so, they would allow for electricity to trade across microgrids which is seen as a solution to energy supply issues and to “promote eco-friendly energy practices”.

Furthermore, plans to upgrade e-government services and utilize blockchain for hospital patient records are underway. These are just the tip of the iceberg for a nation that continuously announces budget increases for blockchain and places blockchain within extremely well-funded innovation plans.


For farming, blockchain technologies have found themselves as favorable entries into the sector and have also come in numerous nuanced forms with the typical benefits still intact.

One pilot project which was recently announced in the United States is a supply chain solution that utilizes both blockchain technology and the Internet of Things (IoT) to trace and track dairy products, improving connections between farmers and end customers and increasing transparency and product freshness, an overall upgrade to the system.

Oxfam International is also on board with blockchain for rice farmers in Cambodia; the project being trialed is designed to create a fair pricing ecosystem among rice farmers. It sets in place digitized contracts that carry numerous essential data inputs as well as establishing appropriate contracts with clients, reducing the risk of exploitation and lowering financial pressures for farmers.


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