Category Archives: KISA

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South Korea Legislates Institution of a Legal Basis For Cryptocurrencies

South Korea Legislates for Institution of Crypto Legal Basis

South Korea Legislates Institution of a Legal Basis For Cryptocurrencies

On 27 November 2019, South Korea passed an amendment to establish a legal framework for virtual currencies by categorizing them as digital assets. As reported by local news outlet Korea JoongAng Daily, the bill was passed by the National Assembly’s national policy committee, stating that, thanks to the bill, “cryptocurrency is one step closer to being legitimate in Korea”.

According to the bill, all the crypto exchanges and firms within South Korea will be required to report to and register with the South Korean monetary authority, Financial Services Commission’s Financial Intelligence Unit (FIU) to make the system more transparent and to legitimize investments. Additionally, the new bill strictly condemns the practice of money laundering by the companies.

The bill also mentions setting up a protocol for financial transactions that the companies will be expected to adhere to. These ground rules should be in compliance with the standards of the Financial Action Task Force (FATF). Apart from this, all companies will have to acquire an Information Security Management System (ISMS) certificate from the state-operated Korea Internet and Security Agency (KISA). The report also states, “…those operating false-identity bank accounts will not be approved”.

The bill is yet to be approved by the judiciary committee. Once approved, the law is expected to come into effect in 2020.

As reported back in May 2019, the South Korean government decided to do away with the guidelines for Anti Money Laundering (AML) within virtual currency, and introduced legislation to directly regulate cryptocurrency exchanges. The amendment required cryptocurrency exchanges to provide their full analysis of AML data to banks in order to maintain their accounts.

 

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Bithumb Resumes Post-Hack Operations

South Korea cryptocurrency exchange has announced today on a blog post that it will resume partial operations following a hack in March, in two days’ time on 17 May, this Friday.

The exchange will begin operations with only three cryptocurrencies for the time being, allowing trading for Ripple (XRP), Bitcoin Cash (BCH) and EOS. This was intended to “minimize the inconvenience to members until the resumption of deposits and withdrawals“.

In the blog post, it stated [translated]:

“At the moment when the security enhancement that we anticipate will be completed, deposit and withdrawal will resume in about a month. We will proceed with the resuming sequentially considering the price difference and service stability.”

In March, the exchange was infiltrated by hackers who successfully made away with EOS 3 million, which was at the time worth USD 13 million. Primitive Ventures’s Dovey Wan had revealed then that the exchange’s hot wallet was compromised, allowing hackers to siphon off EOS and transfer them out to other exchanges such as. Binance CEO Changpeng Zhao had announced at the time that his exchange had not received any of the stolen funds. His own exchange was to be the subject of a hack earlier in May, losing USD 40 million in Bitcoin, but was fully covered by its own security funds.

Bithumb has been working with the KISA, Cyber Police Agency and other security companies, as well as with other exchanges, to track the stolen funds.

 

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South Korea Expands Blockchain Pilot Expedition

South Korea Expands Blockchain Pilot Expedition

The South Korea Internet and Security Agency (KISA) has selected 32 companies to carry out 12 pilot blockchain-related projects in 2019, according to an official press release on the KISA website.

The pilot, dubbed 2019 Blockchain Public Leadership Pilot Project, is expected to provide a nursery for innovative science expedition involving blockchain, its best practices, and application in different sectors of the domestic economy.

According to the press release: “A total of 32 companies will be selected to conduct the 12 projects of the pilot project in 2019, and these companies will share their business plans through a briefing session on 1-2 April.”

The statement also hinted on the direction of focus for the pilots, this includes healthcare and drug administration, energy sector, food safety, trade economy, protection of the rights of part-time workers, waste management, and disaster prevention.

“Blockchain technology is now in full swing”, says Koo-Myung, director of internet service support at KISA; and once these blockchain pilot projects are completed, the ICT systems in sub-economies would be fully compensated. Koo-Myung said:

“By implementing the blockchain pilot project, we have complemented the limitations of existing ICT technology and applied various convergence technologies to areas close to real-[life applications]. We will continue to improve the quality of life for our people.”

Meanwhile, Yeongdeungpo-gu district has implemented blockchain technology in its proposal evaluation system to further improve transparency of its administrative processes.

In September last year, the South Korean government proposed to spend KRW 10 billion (USD 9 million at the time) to revitalize the local blockchain market through 2019. At the time, director of KISA Min Kyung-sik said: “We are going to lead the blockchain technology by creating a new market and carrying out public-part demonstration projects and private-led projects.” And now, it has successfully doubled the blockchain project quota from the initial 6 to 12.

Recently, the Ministry of Information and Communication (MIC) was in the market to recruit professionals into its Blockchain National Participation Evaluation Team, to effectively manage the relative impact of the pilot projects towards its citizens.

 

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