Koreans REKT: Kimchi Premium All But Vanishes, Authorities Seize $47M in Crypto from Tax Evaders

While officials conduct the largest “crypto seizure for back taxes in Korean history,” FSC Chairman warns that cryptos can crash into nothing if exchanges are not approved under the VASP license. Koreans meanwhile remain more interested in Doge and XRP than BTC and ETH.

The “Kimchi premium,” the difference between prices on South Korean exchanges and global cryptocurrency exchanges, has collapsed.

Representing the exit of retail Korean traders, the “kimchi premium” on crypto assets has fallen to 0.5% after this week’s sell-off, noted DooWanNam, co-founder of StableNode, who is also working with MakerDAO.

This kimchi premium had swelled to a three-year high of 22% in early April, just days before Bitcoin’s price hit its all-time high of nearly $65,000 in a sign of retail frenzy.

Given that South Korea now contributes less than 2% of worldwide trading volume versus 8% in 2017, these swings in premiums don’t impact the cryptocurrency prices.

Moreover, Bitcoin and Ethereum aren’t even the most traded crypto asset on South Korea’s largest crypto exchange, Upbit, rather they come at third and fourth place, respectively.

Korans continues to be more interested in trading Doge and XRP, as per Coinmarketcap. In the last 24 hours, Upbit recorded more than $2 billion of trading volume for DOGE/KRW pair, $1.3 bln for XRP/KRW, over $1 bln for BTC/KRW, $678 million for ETH/KRW, and $465 million for ETC/KRW.

Largest “Crypto Seizure for Back Taxes”

While the retail is reeling from these losses, officials in the South Korean province of Gyeonggi confiscated $47 million in Bitcoin, Ether, and other cryptos, according to Financial Times.

Officials are calling it the largest “cryptocurrency seizure for back taxes in Korean history.”

The funds have been seized from 12,000 tax evaders. Officials manually connected individuals’ activity on crypto exchanges with their phone numbers because trading platforms didn’t collect formal identification of account holders.

Just last year, the National Assembly of South Korea passed a law that required local exchanges to comply with KYC and AML guidelines from the Financial Action Task Force (FATF).

As per this, crypto businesses, particularly exchanges, must get approval from the Financial Services Commission (FSC) and the Korea Internet and Security Agency before September 24, 2021.

Be Cautious

On Wednesday, FSC Chairman Eun Seong-soo also once again spoke about the dangers of cryptocurrencies, according to a local media publication. Chairman Eun on the regulation of virtual assets said,

“I emphasized the risk that coins (cryptocurrency) could become a piece of paper if virtual asset business registration (VASP license) is not done.”

He further reiterated the need to be cautious about investing in cryptocurrencies and said, “It is regrettable that we cannot do anything about the price change of the coin, delisting, or suspension of trading.”

On being asked by Tesla CEO Elon Musk influencing the crypto market and whether he will refund Korean investors, Chair Eun said while he understands the anger, “it is technically and realistically difficult,” adding, “if it was done in Korea, if it was a stock, it would be subject to judicial treatment.”

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Author: AnTy

FCA Proposes UK Crypto Exchanges And Wallets Share Money Laundering Data With Regulator

The UK’s top regulatory body, the Financial Conduct Authority (FCA), has proposed a new policy for crypto exchange and wallet custodians. This policy requires crypto companies to submit a detailed history or report on potential money laundering. The FCA noted that they are planning to extend certain obligations for crypto companies for the reporting of money laundering risks associated with their customer accounts.

The FCA first started demanding an annual crime report from financial institutions in 2016. As per the latest proposal made by the regulatory body, “crypto-asset exchange providers and custodian wallet providers” must provide the FCA with a report about their financial crime risk, “irrespective of their total annual revenue.”

It is to be noted that the policy is just a proposal at present, which has been put up for comments by the regulatory body until November 23rd and based on the feedback they receive, the FCA plans to release a policy statement along with new rules by the first quarter of 2021.

How Would New Policy Pan Out?

As per the new policy introduced by the FCA, some further information that crypto businesses might be required to submit the lists of customers put in the ‘high-risk’ category. List of customers who refused to provide their details or left because of the information demand from them along with the top 3 prevalent frauds.

The crypto companies would be required to submit “from their next accounting reference date after 10 January 2022.” The FCA also made a critical change towards crypto exchanges, which open their base in tax-havens but operates all around the globe. The new FCA policy defines “operates” as “where the firm carries on its business or has a physical presence through a legal entity.”

The FCA revealed that the main reason behind such policy changes is to harvest data from potential fraudulent companies so that the right amount of resources could be dedicated to these companies, which in turn would help in containing the money laundering risks. The FCA also stated,

“There may be additional reporting obligations that we might require of crypto-asset businesses in the future.”

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Author: James W

INX To Launch A $117M Security Token IPO; Will Use Funds to Develop Its Crypto Exchange

INX, a Gibraltar-based crypto exchange, would finally conduct the Initial Public Offering (IPO) on August 24 for its SEC-registered hybrid token.

The exchange aims to sell its hybrid token at $0.90 apiece ad raise nearly $111 million from the sale of 133 million tokens. The IPO would also be a first of its kind, given it is the first security offering registered with the US Security and Exchange Commission (SEC).

Before the current offering, almost all STOs only filed notices to the regulators and were mostly unregistered, which kept away institutional investors for fear of scams. The INX exchange’s upcoming IPO took almost two years.

The INX token is being called a hybrid because it would act like a utility and security token, where INX holders can utilize it for different operations on the exchange like paying the transaction fee, and the token would also double down as a form of the company share.

The firm revealed that the proceeds from the IPO would be utilized for INX’s regulated exchange INX Trading Solutions, a $62 million cash fund would also be kept separate for maintaining the platform in case of data breaches, trading execution errors or counterparty defaults.

The court filings submitted by INX exchange also revealed that President Shy Datika currently holds 7.25 of the total supply, which is around 9.4 million INX tokens.

Apart from the president, Doren Cohen, a CEO of the brokerage firm who is assisting the exchange conducting the IPO, i.e., A-Labs also holds around 4.55 million INX tokens and 9 of the ten companies on the advisory board would receive approximately 2 million tokens at a discounted price of $0.01 apiece.

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Author: James W

FCA Survey Estimates 1.9 Million People Currently Own Cryptocurrencies in the UK

According to a recent survey by the Financial Conduct Authority (FCA), which is working with the Government and the Bank of England, as part of a UK Cryptoassets Taskforce, more and more people are now aware of cryptos and getting into them. The survey states,

“We estimate 3.86% of the general population currently own cryptocurrencies. This amounts to approximately 1.9 million adults with the UK population (over 18) taken to be approximately 50 million.”

It is also estimated that 5.35% (2.6 million people) hold or held cryptocurrencies, up from 3% (1.5 million people) in 2019.

In this latest survey, 73% of adults compared to 42% last year have found to be heard of cryptos. Traditional media and online news are playing a part in this awareness with 28% of adults that were aware of cryptocurrencies had seen an advert.

Meanwhile, 45% of crypto owners have also seen a related advert and 35% of them said it made the purchase more likely. But those influenced were also more likely to subsequently regret the purchase. Crypto owners also understand the risks associated with the lack of protections, but the agency still states,

“the lack of such knowledge among some presents potential consumer harm to consumers.”

Bitcoin & Libra is all we know about

The research was conducted by FCA from 13 to 21 December 2019, with a nationally representative online panel of 3,085 respondents. After screening out those who haven’t heard about crypto, the agency added 483 individuals to the sample who were crypto owners for the “longer questionnaire.”

These crypto owners have a high technical knowledge and it has been found that 75% of them hold under £1,000, roughly $1,230, and half of them hold under £260, nearly $320.

Bitcoin remains the most recognized crypto while Libra, which doesn’t exist yet, 22% had heard about this upcoming stablecoin from Facebook.

Testing the knowledge of cryptocurrency owners it was found 90% conducted some research before purchasing cryptocurrencies, compared to 84% in 2019.

Speculation, Regulation, & Coinbase Domination

The most popular reason for buying cryptos remains speculation – ‘as a gamble that could make or lose money’ rather than as an investment of money.

Those investing for speculation purposes were also more likely to hold their cryptocurrencies for more extended periods. In comparison, those displaying a lack of basic knowledge tend to hold their cryptocurrencies for shorter periods.

While 12% never monitor the value of their holdings, 15% regret having purchased.

Almost 50% of cryptocurrency owners have never used digital assets, but a good 27% did use them to purchase goods and services.

Moreover, 31% of respondents who currently own crypto currently do not intend to purchase more crypto because they consider it too risky. 29% of these will buy more if it is regulated in the future.

Interestingly, 73.2% of consumers that do not currently own but plan to purchase cryptocurrencies in the future reported that the lack of regulatory protection has impacted their decision not to buy cryptocurrencies to date.

Unlike the previous times, this survey found that 8% of respondents used borrowed money to purchase cryptos. But these borrowers were most likely to be the ones displaying a lack of knowledge surrounding the technology underpinning cryptocurrencies or the absence of regulatory protections.

The crypto purchases were made majorly (83%) using only non-UK based exchange, with Coinbase being the most popular one with 63% followed by Binance (15%), Kraken (10%), Bittrex (8%), and Bitfinex (7%).

Also, a good 46% store their crypto on the exchange where they bought it, and only 24% keep it in on offline hardware.

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Author: AnTy

UK’s FCA Seeks Blockchain, Crypto Expert With Knowledge Of 5AMLD’s Digital Assets Regulations

The major financial authority in the UK, known as the Financial Conduct Authority (FCA), wants to hire a cryptocurrency specialist.

More specifically, the FCA wishes to work with someone who has crypto expertise in order to know how to address digital assets according to the EU’s 5th Anti-Money Laundering Directive (AMLD5). At least this is what an FCA LinkedIn posting from February 6 says. AMLD5 came into effect last month, on the 10th. It represents the efforts made by authorities to deal with money laundering activities in Europe.

The Expert Will Be a Part of the Core Function Team at the FCA

While the UK exited the EU 6 days ago, on January 31, the British government still needs to pay attention to the European cryptocurrency law that has recently been enforced, this being the reason why it’s looking for a crypto expert to join its core function team, which is the team dealing with intelligence and has been responsible with the interpretation of the AMLD5 regulation since January this year. As the job posting says, this person would be responsible with the enforcement and supervision of the regulation, also with processing applications of firms wanting to join the financial services industry in the UK.

The FCA Has Been Very Active in the Crypto Space

The FCA has many times made its voice heard in the crypto space. It has approved the operations of important firms in the industry and closely investigated what happened in the country’s crypto space. Back in July 2019, it announced that it won’t regulate 2 of the most used cryptocurrencies in the world: Bitcoin (BTC) and Ether (ETH).

The FCA’s new action on AMLD5 arrives soon after the agency made the official announcement that it’s going to start supervising AML compliance of crypto companies in the country. It has been reported that the rules FCA plans to impose are going to be very stringent.

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Author: Oana Ularu

Digital Asset Custodian Koine Awarded Electronic Money Institution (EMI) License By FCA

Financial Conduct Authority (FCA) has awarded and Electronic Money Institution (EMI) certificate to crypto assets custodian, Koine, Financial Magnates reports.

Koine announced on Thursday that it has secured a licence to issue electronic money from FCA. The licence means that Koine can now offer real time e-money payment services to their increasing institutional clientele. Koine also revealed that plans are underway to seek licensure in various financial services locations.

Koine’s chairman Hugh L. Hugh praised the authorization stating that the EMI license will help the firm to move with speed and invest in the necessary infrastructure that will enhance institutional participation within the digital assets market.

Commenting on the development, Hugh L. Hughes, chairman and CEO of Koine, said,

“Market reaction to Koine’s ultra-secure scalable institutional class solution for custody and settlement, has been immensely favorable, and with our EMI authorization now issued by the FCA, we are rapidly moving to implement the market infrastructure necessary to support institutional participation in the digital assets marketplace.”

Currently, Koine enjoys a wide clientele of more than 40 ranging from families to institutions as well as funds. The firm offers custodial as well as real time settlement services in fiat as well as digital assets.

The company has its headquarters in London but its crypto assets custody services are not covered by the UK regulation framework. In this regard, the new license is not authorization of the firm’s digital asset custody business.

He said,

“e-Money authorization should not be read as authorization of Koine’s transformative custody and settlement model for digital assets.”

Hughes explained that the recognition by the FCA of the control procedures that the firm has enacted, irrespective of their views regarding the crypto space, is a testament that London is still an attractive base for crypto-based firms alongside the conventional financial companies. He explained that all that is needed for the crypto-based firms is to explain the controls put in place to satisfy the regulator’s standards and guidelines.

Hughes commented further,

“The FCA’s recognition of the controls and processes that we have put in place for our EMI authorization, notwithstanding their concerns regarding the digital markets, shows that London can continue to attract financial institutions in the digital markets, alongside traditional capital markets, as long as those institutions can show that they have appropriate governance to address the regulator’s requirements.”

Started in 2017, Koine has continued to come up with unique solutions which makes it stand out among its rivals who offer hot wallet and cold storage services. The firm offers manual transfers, offering advanced security for clients’ assets and immediate settlement as well as withdrawals.

The company has been monitoring the best practices exercised by the conventional custodians and has been able to withstand the test of time and is now among one of the largest digital assets custodians.

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Author: Joseph Kibe

IRS Source: Cryptocurrency Holders and Traders to be Audited by US Tax Collection Agency

A trusted source has confirmed that the Internal Revenue Service is going to conduct audits on cryptocurrency activities. The source said that the tax collection agency is planning to unleash a batch of audit notices. These new notices will be follow-ups to 10,000 letters that were initially sent in August.

The IRS has been focusing their attention on the cryptocurrency industry, and soon, audits will be done in the industry. Not many Americans were sure of what was entailed in the 10,000 letters sent in August.

However, multiple reports emerging show the IRS is increasing its review and investigations on substantial crypto investors. A statement by BeInCrypto stated that there was a new checkbox on 1040 form that asked individuals to avail information on whether they had exchanged, sent, or received any digital currency since 2013.

It was also well noted that failure to answer that question with utmost honesty would be a criminal offense. Many people were amazed because not only did this kind of study target the traders, but the holders also seemed to be a target here.

Audit Notices to Crytpo Users

Crypto Tax Girl reported that Judith McNamara who works with the IRS confirmed that the tax collection agency is going to send more audit notices. It is, however, uncertain whether everyone who received the August letter will secure an audit notice for the second time.

Letters sent out in August differed in what they required the recipients to do. Some were a kind of notification that the IRS was aware they were holding the cryptocurrency. Other letters demanded a proper response from the recipients and immediate action. This time around, however, it is expected that audit letters will dictate that there must be a response to the letter.

The IRS has been heavily criticized for using the old laws on new concepts and technologies such as cryptocurrencies. Clearly, the IRS is not welcome in the digital currencies space.

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Author: Daniel W

UK Financial Conduct Authority Sees a 75% Spike in Number of Investigations in the Crypto Space

A report from the Financial Times states U.K’s top financial authority, the Financial Conduct Authority (FCA), has seen a 74% increase in crypto firms under scrutiny in 2019 compared to the figure last year. The report, published on October 7, shows that over 87 crypto-related firms are under investigation, up from 50 the previous year.

As the crypto industry grows, the FCA is taking up strict measures to ensure the crypto industry is in check. The spike in investigated cases is probably as a result of the increased fraud attempts and scams in the crypto industry in 2019.

No Nonsense Approach to Crypto Regulation

According to the research carried out by London based law firm Pinsent Masons, the commission’s heightened interest in the crypto industry is aiming at providing a fertile ground for the development of the industry.

David Heffron, a partner at Pinsent Masons, argues the increased scrutiny will get rid of the bad actors in the industry as the FCA takes on an

“increasingly hands-on and no-nonsense approach to enforcing the law in the cryptocurrency market.”

He further explains,

“For cryptocurrency businesses acting lawfully these statistics will be encouraging — they want bad actors pushed out.”

FCA Against Crypto-Related Scams

With close to 75% of the British population oblivious to what cryptocurrencies are, the FCA sets its goals to protect the consumers from crypto-related scams. Earlier in the year, the agency warned users against sketchy investment firms in the crypto space such as the two firms that cloned Goldman Sachs and Swiss Investment Corp.

Furthermore, the financial authority came out strongly against cryptocurrency derivatives in its annual report claiming it is in the process of banning the exotic assets. However, on Oct. 5, the World Federation of Exchanges pleaded with the authority to drop its proposal to ban crypto-related derivatives.

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Author: Lujan Odera

Billionaire Michael Novogratz’s Firm Galaxy Digital Gets Regulatary Nod To Launch Crypto IPOs

Billionaire-Michael-Novogratzs-Firm-Galaxy-Digital-Gets-Regulatary-Nod-To-Launch-Crypto-IPOs

Galaxy Digital has gained approval from the Financial Regulatory Authority (FINRA) to conduct initial public offerings (IPOs) for cryptocurrency companies.

The endorsement authorizes Galaxy Digital Advisors to act as an underwriter to certified public offerings of equity, debt or other corporate securities in the United States. This appends to its current capabilities to manage private placings of securities as an induction agent and to provide counsel on mergers and acquisitions.

Ian Taylor, Head of Advisory Services for Galaxy Digital says:

“This is an important step in the development of our advisory franchise. With this approval, we now have the ability to finance digital asset and blockchain technology companies through their entire life cycle – from founding, through private capital raisings, to their initial public offering and beyond.”

Galaxy Digital is a diversified, multi-service merchant bank dedicated to the digital assets and blockchain technology industry. Their team has extensive experience spanning investing, portfolio management, capital markets, operations, asset management, and blockchain technology.

On this announcement, Novogratz says:

“We are excited to add this capability to the suite of services we provide. No other firm combines our expertise in digital asset and blockchain technology companies with the ability to structure, distribute, and now underwrite, financings. This approval enables us to expand our ability to educate investors newly interested in this growing sector and further institutionalize the markets in which we operate.”

Novogratz is a major Bitcoin proponent who has recently predicted the price of Bitcoin to touch $20,000 by 2020. He also went on to claim that Bitcoin is finally reaching the end of the saturation point as a digital store of value.

ICO enterprise has decreased to a standstill. Still, every month schemes still get financed through ICOs. New instruments like IEOs (Initial Exchange Offerings) and STOs (Security Token Offerings) have shown that desire for lower friction financing persists despite regulatory challenges. Novogratz is certainly gunning to be the pioneer to fulfill this demand.

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Author: Sritanshu Sinha

UK’s Financial Conduct Authority Is Being Targeted By Crypto Scam Email Campaign

UK-Financial-Regulator-Is-Being-Mimicked-By-Crypto-Scam-Email-Campaign

The Financial Conduct Authority (FCA), an important regulator from the United Kingdom, has recently been impersonated by an online scammer via an email campaign.

According to local reports, the emails, which are from a new crypto scam, impersonate the British regulator in order to offer a chance to get money via cryptos. The email uses the logos of the FCA of the Bank of England. There some hints that the email is fake, though. For instance, there is a misspelling in which a button says “click her” instead of “click here”.

This email affirms that BTC is still a long way from reaching its all-time high price of $20,000 USD but that some unnamed experts believe that it could reach new highs in 2020 or earlier.

The founder of Solomon’s Independent Financial Advisers, Dominic Thomas, was one of the first to stop the campaign. He went to social media to warn people that he received an email that was a potential scam using the logo of the FCA several times in the same day.

It is very ironic that the scammers decided to use the logo of the institution that is generally after them in this case. The FCA is often warning investors against investing in this kind of scheme.

Some people have theorized whether there is a virus attached to the email, especially as it encourages people to click on a call to action button that uses the FCA logo.

The FCA, as expected, has confirmed via its official channels that it did not send out the email to the investors. The organization has also affirmed that this kind of email is not anything new and that several scammers try to use the logo as a way to get some legitimacy.

If you have doubts about whether to trust an email or not, you can always cross-reference the information of the company with the register provided by the FCA and similar regulators. When the company that is emailing you is not listed, you should be aware that this is possibly a scam.

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Author: Gabriel Machado