Bithumb Trading Booms after Sale, Outpacing Even Binance!

Trading in South Korean cryptocurrency exchange Bithumb shot up by some 25% over the weekend after the Singapore-based BK Global Consortium bought a controlling share in the platform late last week.

The BK Global Consortium is a blockchain investment company based in Singapore. It is fronted by a South Korean, Kim Byung-gun of BK Medical, one of South Korea’s leading plastic surgery clinics. BK last week bought a 38% share in Bithumb for in the region of USD 350 million – making Kim the company’s largest single shareholder. Per Newsway, the deal involved a purchase of 50% plus 1 share of Bithumb Holdings’ shares in the platform.
Bithumb also announced that it would reward its top 300 traders with some USD 88,500 worth of tokens as part of a forthcoming airdrop event.

South Korean media reports were quick to point out a spike in Bithumb trading following the news, with the company jumping in the exchange rankings by trading volume.

In comparison, in the beginning of October, the exchange was 9th with a trading volume of around USD 350 million.

Per media outlet Newsis, a Bithumb spokesperson stated, “It looks like the strategic alliance with BK, which has its own global blockchain network, has brought about a good response from the market.”

In an interview published by South Korea’s Maeil Kyungjae newspaper, Kim explained his reasoning behind the purchase, stating that Bithumb was “the Samsung of the blockchain industry.” He also hinted that Bithumb might look to invest in blockchain startups in the future, saying, “In the past, many blockchain projects have struggled to survive when it comes to funding. Bithumb could serve as an incubator to support these kinds of companies.”

Asked what sort of role he envisaged himself playing at Bithumb, Kim stated, “I will not be assuming the role of owner – rather I will be acting as the chairman of the Bithumb board.”
Many South Korean crypto enthusiasts have been angered by the move, however with some concerned that the company’s power base could now move away from the country. Commenters on news stories and Telegram groups criticized the government for perceived anti-blockchain development policies. The government talked up a possible blanket ban on trading earlier this year, and has implemented a nationwide initial coin offering (ICO) ban. Seoul also recently removed exchanges’ tax breaks, and has made direct investment in exchanges through South Korean venture capital companies all but impossible.

Bithumb will likely make use of BK’s Singaporean network, as the country has recently served as a destination for scores of South Korean companies wishing to launch ICOs. Bithumb was also rumored to have been on the verge of launching an initial coin offering (ICO) in Singapore though a subsidiary in April this year.

Cryptocurrency has found an unlikely ally in South Korea’s affluent beauty and plastic surgery industries, with scores of beauticians and cosmetic clinics across the country now accepting pay in digital tokens.


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Author: Tim Alper
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FBI, S Korean Police Bust International XRP Phishing Scam

Police in Seoul have arrested at least two people on suspicion of cryptocurrency-related fraud after a joint investigation with the American FBI.

The agencies say they unearthed a phishing scam that appears to have robbed South Korean and Japanese cryptocurrency investors of USD 800,000 worth of Ripple (XRP).
Per TV news station MBC, at least one of the two men arrested is described as an office worker. The man allegedly mastermind an email-powered sting that drew in 24 South Koreans and 37 Japanese investors.

Prosecutors said the man hired a 42-year-old programmer to create a fake Ripple exchange website. The mastermind then sent emails to Ripple users in South Korea and Japan, claiming their funds had been frozen. The email redirected Ripple users to the fraudulent site, where he was able to convince them to enter their IDs and passwords, which he then used to access their accounts. It is thought that the FBI became involved because the phishing site targeted users of Ripple, an American cryptocurrency.

The man is said to have transferred funds into Korean won via legitimate exchanges, and used the money to pay for accommodation in a luxury apartment complex and fund an extravagant lifestyle.

Per Joongang Ilbo, the suspect claims that he has spent all of the money and cryptocurrency holdings, and has nothing left over. The prosecution service said it would be hard for the victims to receive any compensation for their losses – largely because cryptocurrencies are not deemed to have any monetary value under South Korean law.
The men have been indicted on charges of cyber fraud and violations of the Information and Communications Networks Act.

Many of Japan’s major, government-licensed cryptocurrency exchange platforms are providing “insufficient” protection against phishing schemes, potentially allowing cybercriminals to compromise their users, according to a report published by the University of Tsukuba and investment management firm Nomura Asset Management in May.
While phishing emails are probably the most common attempt to steal user credentials, fake exchange websites have become another popular tool for hackers to gain access to cryptocurrency investors’ funds.

When typing the name of an exchange into Google, you will regularly see exchanges listed on the top of the search results as ads. What is not always clear, however, is that some of these ads have been taken out by hackers and will lead you to a website that looks almost the same of the original exchange website but has the sole purpose of stealing your login credentials to then steal your funds on the actual exchange.

Fake exchange websites have popped up for a long list of exchanges including Bittrex, Poloniex, and Binance, among others.


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Author: Tim Alper
Image Credit: iStock/South_agency

It Started! South Korea Parliament Debates Ending the ICO Ban

The National Assembly, South Korea’s parliament, has begun debating whether the government should overturn a ban on initial coin offerings (ICOs). The motion was presented after three members of parliament put forward separate private members’ bills that, if passed, would legalize ICOs in the country.

The assembly took the decision to debate the matter after two select committees last month called on the government to put an end to its ban, which was put in place almost exactly a year ago.

The chief financial regulator, the Financial Supervisory Service, has previously rejected National Assembly committee calls for ICO legislative reform, but may be forced to change tack should enough MPs lend their support to the measure during the full-house debate.
Critics have claimed the ICO ban is forcing South Korean companies to set up shop in territories with more lenient ICO legislation, such as Malta and Singapore.
The government may also be forced to act after Won Hee-ryong, the regional governor of special administrative province Jeju Island announced he would pursue legal means to allow ICOs on Jeju.

Earlier this week, Won reinstated his desire to force Seoul to reconsider the ban, telling reporters, “[I am] going to persuade the central government to lift its [ICO] ban, so South Korea can become a leader in blockchain technology. This is a sector in which Korean companies can really thrive.”

Another regional governor, Lee Chul-woo of North Gyeongsang province, has also stated his keenness to build a Zug-style, ICO-friendly “Crypto Valley.”

Leading academics have also voiced their support of ending the ICO ban, with professors Ha Tae-hyung of Suwon University and Yoon Soon-deok of Hansei University calling for the government to legalize ICOs. Per Business Post, the professors told a parliamentary select committee that they believed ICOs should be issued in special, regulated zones within the country, or to follow the American lead on ICO issuance in order to let the blockchain industry “evolve.”

Meanwhile, in an editorial for the Electronic Times, journalist Jang Ji-young called on the South Korean government to follow Israel’s lead in blockchain policy-related matters. Jang said that the ICO ban has forced South Korean blockchain startups to relocate abroad, and accused the government’s policy of allowing over USD 27 billion to “leak” to overseas exchanges as a result of its blockchain-and cryptocurrency-related regulations.


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Author: Tim Alper
Image Credit: iStock/AaronChoi

S Korean Exchanges: Gov Wants To “Cut Off Its Nose”

Three of South Korea’s biggest cryptocurrency exchange associations – the Korea Blockchain Association, the Korea Blockchain Industry Promotion Association and the Korea Blockchain Startup Association – have hit back at a government proposal to stop granting exchanges the same sort of tax breaks afforded to other small- and medium-sized businesses.
LIONBIT
The three associations say the government’s decision shows a lack of medium-term planning, and, per the Hankook Ilbo, have accused Seoul of “cutting off its nose to spite its face.”

The associations said, “Exchanges and cryptocurrency brokerage businesses are being put in the same category as entertainment venues. If this legislation passes, many blockchain technology-related companies will find it harder to invest in research and development. Some companies may well move abroad.”

The group criticized the government for going back on its pledge to support Industry 4.0-related companies and the fintech sector.

TIP

The Hankook Ilbo quotes an unnamed employee at a South Korean exchange as saying, “We are very sorry to hear that the government is taking this decision at a time when cryptocurrency and blockchain technology is starting to gain worldwide recognition.”
As reported in February, some 30 of the country’s cryptocurrency exchanges generated a combined USD 648 million in taxable revenue in 2017.

As previously reported on Cryptonews.com, Kim Dong-yeon, the South Korean finance minister and the country’s Deputy Prime Minister, wants to change the way exchanges pay income tax and corporate tax – doing away with tax breaks of between 50% and 100% in the case of newer companies, and tax discounts of up to 30% in the case of older businesses.

The government says exchanges are not generating enough “value” to justify tax breaks, and will move to stop exchanges being classified as “venture companies.” Other businesses excluded from venture company status include pubs, karaoke venues and dance clubs.


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Author: Tim Alper
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