Asia

CEO Sentenced to 18-Month Jail Term for Accepting Bitcoin Bribes to List a Cryptocurrency

15/01/2021 by Idelto Editor

Former Coinnest CEO to Spend 18-Month-Long Jail Term for Accepting Bitcoin Bribes to List a Cryptocurrency

A South Korean court has sentenced the former CEO of the defunct crypto exchange Coinnest to 18 months in prison. The court also fined him over $61,000, who also was charged for fraud in 2020.

Prosecutors Accused Coinnest Executives of Receiving 110 BTC in Bribes

According to Fn News, the Supreme Court of Korea determined that Kim Ik-hwan should spend time in jail, as the authorities previously indicted him in 2018 for accepting bitcoin (BTC) bribes.

The investigation unveiled that he and other executives received almost $771,270 worth of BTC (at the time) for arranging the listing of an unnamed altcoin — referred to by the court as “S” coin.

However, the former Coinnest CEO and its former operating director, Jo Mo, claimed there was “no unfair solicitation.” The prosecutors commented in the first trial:

The defendants acknowledged or promoted the situation that they were taking unreasonable gains by manipulating the market price on the exchange after listing the cryptocurrency. (…) This crime greatly undermined fairness and trust in cryptocurrency transactions. This is bad.

Although the Supreme Court, chaired by judge Noh Jeong-hee, didn’t reveal details on the “S” coin, prosecutors said the altcoin was issued by K Group.

The prosecution also accused Coinnest’s executives of receiving 110 BTC in bribes for the purpose. Jo Mo’s sentence is still pending confirmation by the Supreme Court.

Former Coinnest’s CEO Court History

The former CEO of the now-defunct crypto exchange has additional sentences on his CV. Alongside two unnamed executives, Kim was found guilty in February 2020 of fraud and embezzlement.

A South Korean court gave him a three-year prison sentence, but it was suspended for four years. Moreover, the appeals court sentenced Kim to pay a $2.5 million won fine, and also to serve 100 hours of community service.

The judge ruled that Kim and the other executives misappropriated “billions” of won, transferring client funds to employee accounts. At that time, the executives denied any wrongdoings.

Coinnest closed its crypto exchange operations in April 2019.

What do you think about this sentence? Let us know in the comments section below.

Crypto Industry’s Favorite Messaging App Telegram Surpasses 500 Million Active Users

13/01/2021 by Idelto Editor

Telegram, a popular messaging app within the cryptocurrency space, surpassed 500 million monthly active users during the first week of January, according to Telegram chief executive officer Pavel Durov.

In the last 72 hours, said Durov, the app has seen a massive surge in new users, with an additional 25 million people signing up to use the platform. These new users are coming from all around the world, with the majority – 38% – drawn from Asia.

Some 27% are coming from Europe, 21% from Latin America, and 8% from the Middle East and North Africa (Mena region). Around 200 million people used Telegram in 2018, meaning user growth has exceeded 150% over two years.

Telegram may have benefited from changes to the privacy policy at rival Whatsapp. Recent updates to Whatsapp’s privacy policy require that users share their personal information with parent firm Facebook or stop using the service altogether.

These changes are believed to have prompted users uncomfortable with sharing more of their personal data with Facebook to leave Whatsapp, and join privacy-centric competitors such as Telegram or Signal.

Unlike other competing messaging apps, Telegram does not share personal data and offers encrypted chats.

Posting on his personal Telegram channel on Jan. 12, Durov said:

People no longer want to exchange their privacy for free services. They no longer want to be held hostage by tech monopolies that seem to think they can get away with anything as long as their apps have a critical mass of users.

The Telegram CEO added that “with half a billion active users and accelerating growth, Telegram has become the largest refuge for those seeking a communication platform committed to privacy and security.”

In 2020, Telegram reported new user sign-ups of 1.5 million each day, a far cry from the current influx of people joining the platform. “We’ve had surges of downloads before, throughout our 7-year history of protecting user privacy. But this time is different,” noted Durov.

Until now, all services on Telegram have remained free. However, Durov announced in December that some services may now be monetized. He said additional functions will appear for “business teams and users with advanced needs” and those features will be paid because they are “resource-intensive”. Ordinary users will continue to use Telegram for free, he emphasized.

Telegram attempted to launch its own cryptocurrency called Gram, through the TON blockchain platform, but was blocked by the U.S. Securities and Exchange Commission. That left Pavel Durov, who had raised $1.7 billion from select investors for the project, saddled with a debt of $1.2 billion and $18.5 million in penalties.

Now some investors in TON are preparing a lawsuit against Durov to try and force the businessman “to sell part of Telegram or the entire company and pay off the investors, because he spent money on Telegram,” according to a Forbes report. Durov allegedly spent $500 million of the TON money to upgrade Telegram, something investors claim was not part of the original deal.

What do you think about the influx of new users at Telegram? Let us know in the comments section below.

Major South Korean Bank Shinhan Is Set to Offer Crypto Custody-Related Services

08/01/2021 by Idelto Editor

A major commercial bank in South Korea is entering the crypto business by allocating an equity investment in the Korea Digital Asset Trust (KDAC). Shinhan Bank is looking to offer digital asset custody services.

Bank Expects to Offer Tech Capabilities to Face Defi-Related Hacking Risks

According to inews24, the bank announced the investment in the KDAC, a joint-venture custody company founded by a local crypto exchange, Korbit, blockchain firm Blocko and crypto researcher Fair Square Lab.

The Shinhan Bank spokesperson stated that their upcoming crypto-related services are suitable for an area that “can make good use of banks’ compliance capabilities and custody experience.”

But the bank claims to be one step ahead in terms of security for customers’ funds. In fact, they stressed that such a move would allow deploying technological capabilities to protect “from external and embezzlement risks.”

Shinhan Bank also wants the tech resources used in the project to be applied in the decentralized finance (Defi) sectors, which were actively targeted over 2020 by hacking incidents. Cho Yong-byeong, chairman of the Shinhan Financial Group, commented on the investment:

In a situation where all companies, regardless of business, are digitally active, the fate of Shinhan will also depend on digital transformation. Based on the driving system, all Shinhan people should accelerate digital innovation with one heart.

Other Major South Korean Banks Making Crypto-Related Business Maneuvers

One of the bank’s rivals, Kookmin, announced in November 2020 that they’d create a “digital asset management company” jointly with local blockchain players. The bank aims to offer crypto custody services for corporate customers, such as exchanges.

Per the announcement, Kookmin invested in the KDAC, blockchain accelerator Hashed, and blockchain developer Haechi Labs for an undisclosed amount.

However, Kookmin and Shinhan Bank are not the only ones making a move into the crypto custody business. 2020 was a year characterized by significant investments by traditional South Korean banks in the cryptocurrency industry.

In July 2020, NH Bank unveiled its plans to build a crypto custodial services platform for institutional investors. The bank also hinted at the possibility of offering custodial services to the Bank of Korea (BOK) for its forthcoming central bank digital currency (CBDC).

What are your thoughts on the latest moves seen in the crypto industry by the South Korean banks? Let us know in the comments section below.

South Korean Government to Start Taxing Crypto Trading Profits in 2022

08/01/2021 by Idelto Editor

The South Korean government has issued an amendment to introduce tax on cryptocurrency trading profits. The plan is now a reality after several attempts to delay it by lawmakers.

New Rules Impose 20% Tax on Crypto Profits

Per Asia Today, the legislative notice details that the amendment will be enacted in February, and profits from buying and selling cryptos in South Korea will be taxed at 20%. However, the rule is applicable only to crypto holders with annual income of over 2.5 million won ($2,300).

The Ministry of Economy and Finance said the enforcement decree is scheduled to be promulgated after meetings with the central government’s cabinet. The amendment is being applied to the country’s existing 2020 revised tax rules.

Although it will be enacted in the next month, the legislative notice clarifies that the new rule will start applying in 2022, according to government documents. The amendment also covers new tax rules for stock transactions.

In fact, transactions of listed shares will also be part of the 20% taxation rules for profits of over 50 million won annually, which is substantially lower than the one imposed on crypto gains. Stocks transactions will be taxed at 25% for annual profits of over 300 million won.

Korean Government Kept Delaying Crypto Taxation Plan

Reports of the South Korean government delaying the launch of a new tax framework for crypto profits made headlines several times in 2020. In November, the National Assembly asked to delay the process, which was originally set to take place in October 2021. In December, the planning and finance committee of the National Assembly announced that it will postpone the new tax rule until 2022.

Moreover, the Korea Blockchain Association requested on Oct. 14, 2020, that the regulators postpone the 20% crypto tax plan until 2023. The group argued that local crypto firms need “a reasonable period” of time to comply with the new rules.

What do you think about South Korea’s new crypto tax plan? Let us know in the comments section below.

Bitcoin Trader Robbed During an In-Person Transaction, Kicked Out of Car in Hong Kong

07/01/2021 by Idelto Editor

Bitcoin_Trader_Robbed_During_an_In_Person_Transaction,_Kicked_Out 1

An unnamed 37-year-old man was a victim of a theft from a gang of robbers who fled with 15 bitcoin (BTC), worth HKD 3 million ($387,000) in cash. They agreed to meet in person for a crypto exchange transaction.

Six Non-Chinese Suspects Allegedly Involved in the Theft

Per the South China Morning Post, the bitcoin trader intended to meet in person in Hong Kong with the alleged buyers after an online conversation.

Initially, the unnamed victim was paid the HKD 3 million in cash as agreed while in the robbers’ car, as he previously transferred 15 BTC to the buyers, outside a hotel in North Point, Hong Kong. According to markets.Bitcoin.com data, 15 BTC is worth $519,969 as of press time.

However, following the transaction, the robbers kicked the victim out of the car on a hillside while counting the money, sparking a nationwide search. According to the police, such an incident happened after the robbers traveled for more than 6km and stopped on Tai Tam Road in Chai Wan.

Afterward, three men appeared on the scene, kicked out the victim, robbed the cash and two mobile phones.

Hong Kong police stated that the alleged robbers are looking a total for “six suspects of non-Chinese ethnicity, aged around 30,” including the driver, who are possibly involved in the incident.

Reactions From the Crypto Community

Police sources told the South China Morning Post that the robbery didn’t involve any weapons, nor struggles that left people injured.

As of press time, the Eastern district crime squad of Hong Kong is in charge of the investigation, as no arrests have been made.

Reacting to the news, Jameson Lopp, CTO of Casa and former software engineer at Bitgo, issued a short, but straight-to-the-point recommendation:

Don’t engage in six figure face to face bitcoin trades without an armed escort, folks.

Some people commented on Lopp’s Twitter thread that in-person bitcoin-related transactions are quite common in some countries, such as Japan, even involving “large cash trades.”

Do you trust in-person crypto-related transactions? Let us know in the comments section below.

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