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There has been tons of news in the industry, so as usual we have picked out some of the most newsworthy pieces for you.
After Jerome Powell delivered a hawkish speech at the annual Jackson Hole Economic Symposium, all market’s dived downwards with BTC threatening a 20-month low. This comes just before many of Biden’s executive order responses regarding cryptography are due the following week. Meanwhile a report by Elliptic revealed that $100 Million worth of NFTs stolen over the past year and Compound launches their overhaul — Compound III.
In South Korea, Binance will assist Busan, in developing its blockchain industry, the government considers an airdrop “gift tax”, Samsung will launch cryptocurrency exchanges in 2023 and Yong-Beom Kim becomes the CEO of Hashed Open Research.
This newsletter is a summary of a number of largely unrelated news pieces from the crypto-verse that might be crypto/DeFi/NFTs/VCs/Macro but touch upon DeFi. It is aimed at people who want to stay abreast of some of the news but are not following along too closely. It is put together by Bisonai — a DeFi company in Seoul that bridges together AI + Blockchain.
If you’d like to get in touch, ping us at email@example.com. ✉️ Previous newsletters can be found here.
- Bitcoin threatens 20-month low monthly close with BTC price under $20K
- Over $100 Million Worth of NFTs Stolen Over the Past Year: Report
- Most responses to Joe Biden’s executive order regarding cryptography are due the following week.
- Launch of Compound III Places a Focus on Simplicity
- Binance will assist Busan, South Korea, in developing its blockchain industry.
- Free coins can wait; cryptocurrency tax cannot: S. Korea considers an airdrop “gift tax”
- According to a report, Samsung will launch cryptocurrency exchanges in 2023.
- Yong-Beom Kim, a former finance minister of South Korea, has been named the CEO of Hashed Open Research.
Bitcoin threatens 20-month low monthly close with BTC price under $20K
On August 28, Bitcoin (BTC) appeared destined to match its lowest monthly finish since 2020 as bulls failed to seize the initiative, according to Coin Telegraph.
With hours left until the weekly candle finished, data from Cointelegraph Markets Pro and TradingView showed BTC/USD crisscrossing $20,000 levels.
Only a few days remained until the end of the month, and the pair had failed to make up lost ground over the weekend. Even $20,000 seemed vulnerable as support. Below June’s closing price, Bitcoin was trading about $19,900 at the time of writing.
Material Indicators was alluding to the risk asset cascade that occurred on August 26 as a result of Jerome Powell, Chair of the US Federal Reserve, making hawkish remarks.
Powell’s remarks at the annual Jackson Hole economic symposium shocked the stock markets with no indication that he intended to scale back or reverse crucial rate hikes in the future. The value of American stocks fell by a total of $1.25 trillion on the day.
Over $100 Million Worth of NFTs Stolen Over the Past Year: Report
The in-depth analysis, which was just released by crypto auditing company Elliptic, details the strategies employed by hackers to exploit and rob consumers who are suspicious of new financial technologies (NFTs) of the enormous hype around them.
Phishing, scam projects, stolen and copied NFTs, market manipulation, and rug pulls make up the majority of the financial crime associated with NFT trading, with each incidence of illegal activity costing an average of $300,000. With nearly 4600 NFTs taken so far, July 2022 has proven to be the most lucrative month for cybercriminals.
The value of NFTs taken in various ways amounts to more than half of the aforementioned sum, or $69.5 million. These thefts were taken out mostly through phishing scams.
Email and social media-based phishing were used to obtain 80.1% of the stolen digital artworks. The remaining ones were carried out through impersonation scams, exchange scams, and other techniques.
Strangely, phishing attacks weren’t just employed to defraud careless collectors of their assets. Certain phishing scams also airdropped free NFTs or charged low prices for NFTs, frequently in.svg format, that served as a Trojan horse, allowing hackers access to the user’s wallet once the NFT was received or, in some circumstances, disclosing the collector’s IP address, among other things.
Curiously, phishing assaults weren’t just employed to defraud unsuspecting collectors of their assets. Some phishing scams either airdropped free NFTs or sold cheap NFTs — frequently in a.svg format — that served as a Trojan horse, giving bad actors access to the user’s wallet once the NFT was received or, in some cases, disclosing the collector’s IP address, among other things, after the NFT was received.
The majority of answers to Joe Biden’s executive order on cryptography are due next week.
A large portion of the agency's responses to President Biden’s executive order is about to be due, according to The Block.
The March 9 order stipulates that seven reports from the agencies must be sent to the White House 120 days after the order’s publication. As a result, their due date is September 5, the day following Labor Day. Labor Day is a federal holiday in the US.
Although the executive order highlights the importance of interagency cooperation, the orders and the organizations that spearheaded them are as follows:
- The Treasury: A report on a central bank digital currency, or CBDC, with a particular interest in cooperation with the Federal Reserve. CBDCs have become a surprisingly contentious topic in Washington since the release of the Executive Order.
- The Office of Science and Technology: A technical analysis of the difficulty and likelihood of implementing a CBDC.
- The Justice Department: A legal assessment of whether Congress needs to put out new law in order to issue a CBDC — which Republicans have adamantly insisted is the case.
- The Treasury and the major markets and consumer protections regulators: a report on the risks and rewards of digital assets in markets and payments.
- Office of Science and Technology Policy: a report on crypto’s role in energy transitions across timespans. The issue is controversial, with crypto critics frequently pointing to proof-of-work mining as an inexcusable waste of electricity. Crypto stakeholders say PoW can monetize the development of renewable energy sources.
- The Justice Department, with the help of the Treasury and the Department of Homeland Security: The role of law enforcement agencies in “detecting, investigating, and prosecuting criminal activity related to digital assets.” The Department of Justice’s FBI, the Treasury’s IRS-Criminal Investigations, and the Department of Homeland Security have spearheaded the bulk of major cryptocurrency investigations federally.
- Commerce Department: A framework for enhancing United States economic competitiveness in, and leveraging of, digital asset technologies.
Launch of Compound III Places a Focus on Simplicity
A significant update to one of DeFi’s oldest lending processes has begun.
After a successful governance vote, Compound Finance, one of DeFi’s oldest lending protocols with $2.72B in total value locked (TVL), implemented Compound III on August 25.
The main benefit of the design adjustment made to Compound III is that it should potentially safeguard users from the risk of putting their assets in a pool with one “bad asset.” If one asset fails under the shared pool model, the pool’s value may drop below the amount of debt that was borrowed against it, leaving the protocol with bad debt. One such scam cost Cream Finance $23M.
Compound is the seventh largest DeFi protocol, according to DeFi Llama, with $2.72B in TVL. Compound has seen the value locked in its smart contracts decline by more than 25% on the year as prices have fallen, similar to all of the top five protocols in TVL terms.
As the downturn market drags on, Compound III’s focus on simplicity and safety might rekindle the DeFi borrowing market.
Binance will assist Busan, South Korea, in developing its blockchain industry.
According to trading volume, Binance, the largest cryptocurrency exchange, has signed an MoU with Busan, South Korea, to support the development of the city’s blockchain ecosystem and the Busan Digital Asset Exchange.
- The MoU includes several services and technological help.
- Binance will provide Busan with technological and infrastructure support for the development of the city’s blockchain ecosystem, promotion of the Busan Digital Asset Exchange and order book sharing.
- Binance will use Busan’s blockchain regulatory-free zone to promote blockchain initiatives and businesses, and provide specialized blockchain education and online resources from Binance Academy.
- Binance said that it will establish a presence in Busan by the end of the year.
Free coins can wait; cryptocurrency tax cannot: S. Korea considers an airdrop “gift tax”
Despite the suspension of the cryptocurrency gains tax until 2025, the South Korean Ministry of Strategy and Finance announced that hard forked tokens, staking incentives, and airdrops of virtual assets will all be subject to gift taxes under the Inheritance and Gift Tax Act.
Under South Korean law, cryptocurrencies are referred to as a type of virtual asset.
The South Korean tax authority stated in response to a tax law inquiry about transfers of virtual asset airdrops by crypto exchanges that any free virtual asset transfer by crypto exchanges, including those made in the form of airdrops, staking rewards, and hard-forked tokens, would be subject to gift tax.
According to a local news source, the gift tax will be “assessed on the third party to whom the virtual asset is transferred free of charge.”
The tax office said that free virtual asset transfers would still be subject to a 10–50% tax under the Inheritance and Gift Tax Act even though virtual asset gains tax would now be applied starting in 2025. According to the aforementioned tax, the beneficiary of the free “gift” must submit a gift tax return three months after receiving it.
However, the ministry also cleared that actual taxation on such virtual asset transfers should be considered on a case-to-case basis, given the lack of regulations around the virtual asset market. A statement from the ministry read:
“Whether a specific virtual asset transaction is subject to gift tax or not is a matter to be determined in consideration of the transaction situation, such as whether it is a consideration or whether actual property and profits are transferred.”
According to a report, Samsung will launch cryptocurrency exchanges in 2023.
According to reports, South Korean securities companies have focused on the cryptocurrency sector and intend to launch digital asset exchanges in the first half of 2023. Samsung Securities and Mirae Asset Securities are two examples of such companies, according to Crypto Potato.
The domestic financial regulators have recently been very tough with firms associated to cryptocurrencies. Over 60 trading venues stopped operating last year as a result of the Financial Intelligence Unit’s (FIU) strict rules.
Seven significant South Korean securities businesses plan to launch cryptocurrency exchanges in the first few months of 2019, according to a local media report. These organizations have recently been working with domestic financial watchdogs to get a license for these activities by the end of 2022.
Samsung Securities and Mirae Asset Securities are two of these firms. The former intends to establish a subsidiary under Mirae Asset Consulting to introduce its cryptocurrency platform (an affiliated organization). When launched, the exchange will deal with non-fungible tokens and offer trading services for Bitcoin and Ether (NFTs).
Samsung Securities is attempting to get into the blockchain-based security token market. The company attempted to build a token trading platform in 2021 but was unable to put together the necessary team of experts to complete the job.
The ambitions of those Korean businesses are consistent with Yoon Suk-yeol, the nation’s newly elected president’s pro-crypto position. He promised earlier this year to improve the environment for domestic investors by raising the minimal threshold for paying capital gains tax on revenues from investments in digital assets.
Yong-Beom Kim, a former finance minister of South Korea, has been named the CEO of Hashed Open Research.
The former deputy minister of economy and finance of South Korea, Yong-Beom Kim, has been named as the new CEO of the research division of the cryptocurrency venture capital firm Hashed, based in Seoul.
Yong-beom Kim graduated from Seoul National University and majored in Economics. In 2018, when he was Vice Chairman of the Financial Services Commission, he institutionalized the system related to the virtual asset environment. According to CoinDesk Korea, Hashed Open Research, a company that specializes in blockchain and digital technologies, intends to establish communication between blockchain experts and the Korean government.
“I thought that my experience could be helpful for the vision and global expansion strategy of the young blockchain investor group,” Kim said.
Kim supported legislation in 2017 that aimed to stop unauthorized bitcoin transactions. He also assisted in the revision of the FSC’s Special Payment Act, which had previously been seen as onerous for cryptocurrency businesses.
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