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Interpol Enters Deal With South Korea’s S2W Lab Over Cyber Threat Intelligence Data

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With the growing development of the digital asset universe, it is common to expect that illicit activities in the dark web will intensify. Over the past years, major cyber-crime and criminal activities have been carried out over the darknet, causing serious damage to financial institutions and individuals around the world.

Now, according to a recent press release, S2W Lab, a South Korean start-up has agreed and signed an official agreement with Interpol over the security of the online networks.

The French-based International Police Organization has entered into an agreement on the start-up of data intelligence to share information on cyber threat intelligence. After the announcement, Suh Sangduk, CEO of S2W Lab said,

“Cybercrime of dark web is hard to track due to its characteristics and wide usage of crypto-currencies and this is where S2W lab specializes in offering a technology which will help the Interpol to mitigate cyber threats prevailing on the dark web landscape”.

Launching back in 2018, S2W Lab is a company with expertise in the extraction and capture of large amounts of key data related to the Dark Net. Tracking data over the Darknet is an extremely tedious task, and police agencies around the world have a number of cybersecurity offices set up to track the offender’s trails.

The above agreement would ease the load on Interpol, as the S2W Lab will reduce the difficulty of filtering the data connected to the targeted individuals that are consistently active on the dark web.

Cyber-Crime in Crypto

Cryptocurrencies are a traceable form of digital assets, and one would assume that criminals would probably stay away from such medium of exchanges. The assumption couldn’t be more wrong.

Earlier in late January, Chainalysis had released a report that revealed that despite Bitcoin’s centralized network, the digital currency continued to register a higher volume of transactions that were linked to the darknet and possible illicit activities.

By the end of 2019, Bitcoin was used to conduct transactions worth over a whopping $601 million.

Jonathan Levin, Chainalysis Co-Founder, said,

“so the darknet markets are definitely evolving in their business models and how they store cryptocurrency that typically if they want to be able to access a large audience of buyers. The vendors, themselves, are still accepting Bitcoin because that’s where the majority of users are still comfortable to spend their cryptocurrency.”

Additionally, the Co-founder also added that crime-related to other digital assets was significantly less, with Bitcoin being the favored digital asset in the Dark Web.

Chainalysis Head of Research, Kimberly Grauer spoke about cryptocurrency money-laundering and believed that over the years, an estimated $2.5 billion in Bitcoin-related illicit activities were transferred to several exchanges.

Major exchanges such as Binance and Huobi were in the mix, with Binance accounting for a share of 27.5 percent.

South Korea Pushes For More Cryptocurrency Adoption With New Taxation Laws

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 Cryptocurrency adoption has been on the rise in recent weeks and the countries of South Asia have been at the forefront. Reports have shown that developments in Asia have surpassed that in the US, with proponents betting on China and South Korea.

South Korea’s recently reported that it had taken significant steps to integrate cryptocurrencies into its economic systems after providing amendments to its economic framework. 

The country claimed that it would step up efforts for cryptocurrency taxation after the National Assembly passed a new revision. The amendment will be made to the Reporting and Using Specific Financial Transaction Information Act, with the aim of putting the cryptocurrency industry under government regulation.

Cryptocurrency companies will now be asked to take anti-money laundering measures and conduct their business on the basis of real-name accounts.

South Korea has stated that any exchange that does not comply with the stipulated rules will be banned from operating in that country If the registration is not carried out, the State has the right to sentence owners to up to five years in prison

Apart from jail time, cryptocurrency exchange heads may also be asked to pay 50 million Won or $42,000.  One of the other main agendas of the new revised law is to establish a solid playing ground for cryptocurrency taxation.

All details about the cryptocurrency taxation laws will be released in July. At the same time, the Korea Blockchain Association would survey market participants and deliver their findings to the tax authorities.

The government has also asked the officials heading the cryptocurrency companies to function on real-name accounts. Korea is one of the few countries that has seriously considered cryptocurrency as a legitimate form of transaction and the tax plan is seen as a first measure.

The country’s move towards cryptocurrency taxation stemmed from the Bithumb issue back in December 2019. Last year, the National Tax Service incited a massive controversy by filing an 80 billion won tax on Bithumb.

This led to multiple proponents of the cryptocurrency industry to believe that they were being treated unfairly. Bithumb had retaliated to the ban by stating that there were no legal provisions for crypto to be taxed in the country.

A member of the Korea Blockchain Association said that they will be holding a series of debates on cryptocurrency soon and that there will be input from multiple sectors of the decentralized industry. At the moment, there were only four exchanges that adhered to the rules proposed by the Blockchain Association. They were Upbit, Bithumb, Coinone, and Korbit.

Bithumb Partners with Chainalysis as South Korea Scales up Regulations

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Blockchain forensics firm Chainalysis announced on March 10 that it will partner with South Korea-based cryptocurrency exchange, Bithumb following the successful passing of new crypto-currency laws in South Korea.

Bithumb will use the Chainalysis Reactor Inquisition tool to monitor skeptical activities on its platform. The main reason for Bithumb’s latest move is to keep up with the most recent amendment to the Special Financial Transactions Information Act.

The Korean Government is accelerating the imposition of digital currency taxes following the adoption of the amendments by the National Assembly. According to the Financial Services Commission (FSC), the revised regulations require cryptocurrency firms to implement anti-money laundry measures to ensure that individuals use their real names in the same way as traditional banks.

In addition, the new regulations will provide the Korean tax authority with a foundation to create a legal framework for the taxation of digital assets. As a result, exchange firms will be obliged to provide the authorities with details of their customers and their records of purchases for tax purposes.

Korean exchanges to comply with new regulations by 2021

The South Korean government intends cryptocurrency exchanges to fully implement the new requirements by September of next year. Some provisions of the revised act can take up to 12 months to be fully implemented. The new apparatus could take another six months to come into effect.

According to Thumb’s head of compliance, Sungmi Lee, the lawmakers may further strengthen the rules in the future. He argued that the exchange expects much tougher regulations, and therefore needs to be armed with sufficient support before that. Korea’s exchange companies are required to report their activities to the country’s financial authorities. They are required to obtain the real name of the user from banks in the country. Failure to comply will result in an exchange being fined up to $42,000 in fines or a prison term of up to five years.

Additionally, the law requires all the exchange firms to have their infrastructure attested by Korean Internet Security Agency (KISA). Currently only four exchanges have completed the expensive and time-consuming KISA certification. Bithumb, Upbit, Coinwon, and Korbit are among the companies to have obtained this award.

Chainalysis to help Bithumb Strengthen its AML and CFT Practices

According to the chief revenue officer at Chainalysis, Jason Bonds: 

“As cryptocurrency use in South Korea continues to grow, new regulations such as this will make blockchain analysis solutions like Chainalysis vital for compliance.”

The high number of hacks in the country last year on cryptocurrency exchanges; called for the need for the government to introduce measures, in particular, to increase transparency. As a result, Bithumb aims to improve their AML and counter terrorism financing (CFT); with the support of the Government’s Chainalysis Reactor tool ahead of such initiatives.

South Korea is among the countries that have recently revised its domestic digital assets regulations to ensure they meet the standards set by the Financial Actions Task Force (FATF). During the past couple of days, Switzerland, South Korea, Singapore, The United Kingdom, Ukraine, Hong Kong, Dubai and Japan; have all amended their domestic cryptocurrency guidelines to meet the standards laid down by the G7’s FATF.

South Korea Approves Landmark Cryptocurrency Legislation Bill in the Midst of Coronavirus Spread

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Multiple countries across the globe have started to take cryptocurrencies seriously or at least have taken a deeper interest in blockchain technology. The Asian market has been a surprising pioneer in the digital asset industry, with regions like China and South Korea serving as torch holders.

South Korea went all-in on crypto this Thursday when the government announced that they will be passing a new law to legitimize cryptocurrencies in the country.

According to reports, the National Assembly of South Korea passed the Special Financial Information Law which would require local cryptocurrency exchanges to comply with the Financial Action Task Force [FATF] guidelines.

The groundbreaking bill was welcomed by cryptocurrency supporters as a step in the right direction towards global adoption. South Korea revealed that the law was delayed because of the widespread takeover of Coronavirus in the country.

Supporters of cryptocurrencies in South Korea were quick to comment that government recognition would only speed up development processes. Sunga Kim, President of the Blockchain Association of South Korea, argued that both existing and new investors should consider the industry as legitimate.

She is also part of Hanbitco, a famous South Korean exchange that would surely have loved a new state update. Ms. Sunga Kim added that the legislation would allow the crypto exchange market to avoid poor public perceptions of fraud and malpractice.

The new law will also make it mandatory for exchanges to be licensed by the Financial Services Commission[ FSC] and the Korean Internet and Security Agency[ KISA] to cater to Korean citizens. The major focus of the community will be to reduce the number of scams that exist in the cryptocurrency industry. Reports have only shown that in the past years, the frequency and intensity of fraud have only increased.

Exchanges will need to obtain something called the International Security Management System [ISMS]. This will be provided by the KSIA so as to comply with all clauses in the Special Financial Information Law. Currently, six exchanges hold the ISMS license from KISA. The six exchanges were UpBit, Bithumb, Coinone, Korbit, Gopax, and Hanbitco.

These developments come at a time when the country has been hit severely by the Coronavirus. The pandemic has affected thousands of citizens with the fatality rate climbing rapidly. The country is the few places where the virus has spread, whereas countries like China were reporting a drop in the rate of people affected. Korea is also set to witness its parliamentary elections in April and only time will tell how the country will hold up till then.

 

South Korean Exchange Announces Closure And Returns Thousands of ETH Tokens

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Since the coming and going of the 2017 crypto-currency bull run, crypto-businesses, as well as projects, have found it hard to survive if not completely wiped out.

This phenomenon was again put on display when Content Protocol, a Korean cryptocurrency company announced its closure. The Startup focused essentially on content exchange and the lack of business opportunities and regulatory uncertainty killed any chance of its growth. One of the biggest highlights of the shutdown was that the Contents Protocol decided to refund its assets to the investors.

Contents Protocol will refund its investors, distributing just under 27,000 ETH on a pro-rated basis. These were the total holdings of the company before it decided to announce its shutdown. The startup is barely 2 years old and had made news in December 2018 by raising $10 million in Ethereum during a token sale. The official announcement from Content Protocl stated:

“We inform you that due to continued regulatory uncertainties in cryptocurrency and lack of business prospect, we have decided to end our project. Based on the legal opinion and advisory from law firms in Korea and Singapore, we will convert our remaining assets to ETH and distribute it on a pro rata basis to CPT holders who have requested ETH compensation until specified date.”

Contents Project was made to collect consumer data from Korean platforms such as WATCHA PLAY and WATCHA to create a better content ecosystem. In this way, the company plans to rewards the users for its data with its native token Contents Protocol token [CPT].

The US SEC has been involved in the case of multiple cryptocurrency companies. Earlier in 2018, Pantera Capital estimated a quarter of the ICOs it invested in could be sent back to their original backers.

South Korea Is About To Levy a 20% tax on Cryptocurrencies

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South Korea’s cryptocurrency regulation has seen tremendous developments in the last 2 years. However, Park Yong-jin, a member of the national policy committee from the ruling Democratic Party, brought in the first-ever taxation bill in South Korea.

The Ministry of Economics and Finance recently ordered the department of income tax to start reviewing the cryptocurrency taxation plan as per the report published by one of the local South Korean news channels, Pulse. South Korea’s government is planning to impose a 20% tax on all the income generated from Cryptocurrencies. 

Nevertheless, the income tax department will likely consider all the income generated by Cryptocurrencies as ‘Other Income’ instead of ‘Capital Gains’. Interestingly, this news has brought a healthy amount of consideration in the Korean Expert community.

If implemented, all the Cryptocurrency income will come under the banner of ‘Other Income’. The income tax department will collect a 20% tax on 40% of the total income. The rest 60% comes under the band of tax deduction.

Reportedly, the government is yet to finalize the working procedure. But, it is for sure that income generated with Cryptocurrencies will be labeled as ‘Other Income’. Earlier it was considered as capital gains.

The National Tax Service (NTS), the Korean tax authority, is supposedly waiting for a green signal from the government authorities. Once levied, they will be allowed to start imposing a tax on Cryptocurrency gains on an immediate effect.

Consequently, Bithumb, a South Korean Cryptocurrency Exchange, was asked to pay $69 million as a tax by NTS. This was the first of its case where NTS levied the taxation on Cryptocurrency gains under the label of other income.  More so, Bithumb is planning to take the authorities to court for negating the amount inflict on them by NTS. They are in the mood to nullify the tax. 

Meanwhile, the Korean authorities have started marking gains earned by the immigrants from virtual assets as the source of ‘Other Income’. They have been actively collecting the tax indirectly at the time of any exchange of Cryptocurrency.

It is now a game of curiosity about what the government decides and how NTS will shift its gears.