South Korea’s ban on crypto is slowly destroying the blockchain companies in the Busan Zone which is a blockchain regulation-free zone as we are finding out today in the coming altcoin news.
The South Korean Ministry of SME’s and startups in 2018 designated about 1 trillion KRW for growing their blockchain technology industry mainly due to the ‘’Growth Through Innovation’’ plan. However, now the place is running dry of companies because they are unable to launch private assets from the ledgers they are creating. The assets are similar to native cryptocurrencies which according to the local laws they are still banned in South Korea.
The Korea IT times reported two days ago that the new blockchain-regulation free Busan zone will become ineffective as a result of the country’s existing harsh regulations that are hovering around cryptocurrencies and ICOs. The blockchain startup under the name OkayCoin Core had its screening rejected because of the harsh regulatory restriction which is a result from South Korea’s ban. The company god excluded by a selection committee since it had nothing to do with decentralized or initial coin offering assets. The company merely created asset-backed securities by combining cryptography and tokenization.
The Busan Metropolitan Government confirmed that the OkayCoin is their project and it is highly unlikely to begin by the end of this year. Aside from the regulatory roadblocks, the body commented that they will also review all proposals about cryptocurrencies saying that they do now have the authority to change the mind of anti-crypto lawmakers:
‘’Busan should review the proposals when the relevant ministries give opinions on the special district participation such as acceptance or conditional acceptance. If the Korean Financial Services Commission keeps an unacceptable position for ‘the special regulation-free on cryptocurrency, the Ministry of SMEs and Startups cannot change it to acceptance.’’
As we found out in the latest cryptocurrency news, the Busan blockchain-regulation free zone was created to allow development in sectors such as logistics, finance, safety, and tourism. More than 13 companies applied to open offices in the area and one of the companies even launched its own cryptography-enabled currency.
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“All these changes will make anonymity more difficult for the average consumer, as more exchanges comply and implement KYC. Those exchanges who don't will be forced to jump from jurisdiction to jurisdiction, which will impose extra costs that only those committed to anonymity will be willing to pay. For criminals, this will change nothing because they are in that group, among many others who are not criminals, who are willing to pay more.”Regulation can affect crypto in many different ways and regulators are already preparing new laws now. It is certain that if this happens, an intense debate will also occur among investors, industry leaders and regulatory bodies.
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“Governance is the core pillar of any form of digital currency. It is critical that any framework on digital currencies ensures security, efficiency, and legitimacy of payments while ensuring fair and open competition. We welcome the WEF’s platform to help develop a robust governance framework for inclusion through digital currencies.”As per the recent reports, the efforts of creating a regulatory framework on cryptocurrencies are getting more serious. As of this month, the European Union introduced an updated version of the 5th anti-money laundering directive and had increased regulatory focus. All of the crypto-related businesses are operating from Europe and they have to follow the rules which include a more in-depth know your customer process, filling suspicious activity reports and conduct transaction monitoring with law enforcement. After the WEF2020, the world watchdogs will try to establish a framework of regulations for crypto so it will be extremely interesting to see whether this will be beneficial for the market.
Germany Increases Costs For (Some) Crypto Firms By $250k
"They have to now set up a new legal entity since January 1 has passed," explains Philipp Sandner, who is a professor at the Frankfurt School Blockchain Center. "But this new legal entity would be illegal for custody, trading and issuing."The new laws show that Germany increases costs and that all companies founded after January 1 will need a BaFin license to offer these services. Meanwhile, the companies founded before January 1, 2020 will benefit from 'grandfathering' until November 2020.The cost of acquiring a BaFin license could be prohibitive for new startups, both Sandner and one lawyer explained.
"For companies (be it startups or larger companies such as banks), the license induces costs of approx. USD 250,000," they say. "Not every startup will be able to bear these costs. The small startups might be driven out of the market; the larger ones and the incumbents will probably apply for the license."As Germany increases costs for crypto firms, many wonder why is this the case. The truth is, the government is sought to introduce a law which might end up driving startups "out of the market" as experts noted.Both experts noted that the government had the opposite intention in mind and wants to encourage mainstream adoption of cryptocurrency and blockchain technology, rather than leaving these sectors open for unregulated firms. However, the costs at this point are big for many crypto firms which is why the crypto climate in Germany is not that good.Meanwhile, the latest Bitcoin price news show that the cryptocurrency has fallen by 6% due to the situation in China.
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- Whether or not an investment contract is being offered in a securities transaction
- Whether an investment contract is a commodity which can be sold in a traditional commercial transaction
“If a developer team retains certain assets and sells it to investors, it falls into the definition of security. I think that the U.S. legislation must be shaped to take into regard emerging technologies and new business models that hadn’t been present not only in the days of SEC creation but also during the judicial battles on security definitions.”The crypto industry has been witnessing an enormous amount of interest around stablecoins, a digital offering which presents users with all of the various advantages of cryptocurrencies all while having their values pegged to a stable fiat asset such as the US dollar, the Euro and others.
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