South Korean authorities are reportedly planning to release updated guidelines for virtual asset trading. These guidelines will prohibit the listing or relisting of coins that have previously been hacked. Additionally, the guidelines will require issuers of “foreign” virtual assets to release a whitepaper or a technical manual specifically for the Korean market. Guidelines for ‘Foreign’ […]
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The National Tax Service in South Korea is preparing to launch a virtual asset tax system to help analyze the information received from cryptocurrency holders to avoid cryptocurrency tax evasion. Local sources reported that the agency had contracted the services of a third-party company to help in this task, and it is scheduled to be […]
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On Wednesday, bitcoin’s value ascended past the $60K threshold, peaking at a 24-hour high of $61,389 by 10:45 a.m. (ET). Concurrently, South Korea observed a pronounced premium over the international exchange rate, with local platforms such as Upbit and Bithumb displaying prices that are $2,251 higher. In a Worldwide Bitcoin Frenzy, South Korea and 30+ […]
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Montenegro has reportedly deported the former financial officer of Terraform Labs, Han Chang-Joon, back to South Korea to face criminal proceedings.
According to reports, law enforcement agencies referred to him as J.C.H. He was “handed over to the competent judicial and police authorities in South Korea today in order to conduct criminal proceedings for more criminal offenses related to financial investment fraud services.”
Daniel Shin, Terraform Labs co-founder, is facing a similar trial in Seoul for fraud, illegal fundraising, and violation of capital market laws. However, he has denied all charges and involvement in the collapse of the crypto company.
The deportation announcement closely follows Terraform Labs’ recent filing for bankruptcy protection in the United States. The company stated that this strategic move aims to safeguard its business, allowing for financial restructuring in anticipation of potential enforcement actions by the U.S. Securities and Exchange Commission (SEC.).
Meanwhile, the latest update on the fate of Do Kwon, the founder of Terraform Labs, remains elusive, with no new information provided by Montenegrin authorities.
CryptoSlate reported that Kwon and Han were apprehended in Montenegro for attempting to travel to Dubai using forged Costa Rican passports. Subsequently, the Montenegrin authorities charged them with forgery and the use of false passports, leading to their incarceration.
Kwon is facing fraud charges in both the United States and South Korea. The charges are linked to the collapse of the algorithmic TerraUSD stablecoin, which resulted in approximately $40 billion in losses for investors and triggered broader setbacks in the global crypto market.
Montenegro’s court has signaled Kwon’s extradition to either the U.S. or South Korea, pending a decision by the country’s minister of justice. Recent developments, however, indicate a potential journey to the U.S. Kwon has requested a trial delay until mid-March, suggesting an intention to participate in the proceedings on American soil.
Terraform Labs founder Do Kwon faces possible extradition to either the United States or South Korea, as confirmed by an update on a court website in Montenegro on Nov. 24.
The High Court of Podgorica stated that the necessary legal conditions for Kwon’s extradition to either country had been satisfied. This pertains to his alleged involvement in the collapse of the algorithmic stablecoin UST, leading to criminal proceedings in both nations.
Kwon, currently serving a four-month prison sentence in Montenegro due to traveling with forged documents, awaits a decision from Montenegro’s Minister of Justice regarding his extradition after completing this term. Kwon’s attempt to appeal his conviction earlier this month was rejected as the court determined that his case was “correctly and completely determined.”
Initially, Kwon expressed consent for extradition to South Korea. However, the court couldn’t grant this request as the decision relied on international law. The U.S. authorities’ establishment of the legal basis for extradition influenced the court’s decision on the destination.
Meanwhile, Daniel Shin, the co-founder of Terraform Labs, is currently facing trial in Seoul for fraud, illegal fundraising, and violating capital market laws.
However, he has denied all charges and involvement in the collapse of the crypto company. Shin’s legal representatives argued that Kwon’s “unreasonable” managerial decisions led to Terra’s collapse, emphasizing that Shin severed ties with Kwon at least two years before the company’s failure.
The post Montenegro court clears path for Do Kwon’s extradition to US or South Korea appeared first on CryptoSlate.
Crypto exchange Bithumb plans to become the first digital asset company to go public on the South Korean stock market.
Local news outlet Edaily reported on Nov. 12 that Bithumb is getting ready for an initial public offering (IPO) on the Kosdaq — South Korea’s version of the United States Nasdaq — with an expected listing date set for sometime in the second half of 2025.
Bithumb declined to confirm whether the IPO was going ahead but admitted it had recently selected an underwriter, which is a company tasked with guaranteeing the financial security of another typically before a firm goes public. Bithumb chose Samsung Securities as its potential IPO underwriter, according to Edaily.
Bithumb’s former chairman, Lee Jeong-hoon, returned to Bithumb as its registered director, according to sources familiar with the matter. Meanwhile, CEO Lee Sang-jun was excluded from a place on the board of directors due to an ongoing investigation into alleged bribery.
Additionally, the sources claimed Bithumb’s move to go public resulted from not wanting to give up further market share to Upbit — the largest crypto exchange in South Korea.
Related: Bithumb’s largest shareholder executive found dead following allegations of embezzlement
Bithumb is currently the second-largest crypto exchange in South Korea by daily trading volume, a distant second to Upbit. In July, Upbit’s monthly trading volumes surpassed that of Coinbase and Binance for the first time.
Both Upbit and Bithumb became the subjects of unwanted attention in May when South Korean authorities raided their offices over allegedly fraudulent crypto trading on behalf of a local lawmaker.
In February, Kang Jong-hyun, one of Bithumb’s largest shareholders — and suspected “real owner” — was arrested on embezzlement charges following a lengthy police investigation into his allegedly illicit behavior.
41-year-old Jong-hyun is the elder brother of Kang Ji-yeon, the head of Bithumb affiliate Inbiogen. The firm holds the largest share in Vidente, the biggest Bithumb shareholder, with a 34.2% stake.
Bithumb was founded in 2014 and, at the time of publication, had a 24-hour trading volume of roughly $580 million, according to CoinGecko data.
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The trial of payment platform developer Terraform Labs co-founder Shin Hyun-Seong, also known as Daniel Shin, and seven others got underway in Seoul Southern District Court in South Korea on Oct. 30, according to local news reports. Shin is accused of defrauding investors. Also at issue was whether or not LUNA (LUNA) is a security.
Shin left Terraform in 2020 “for business reasons,” his lawyer told the court. Shin was the CEO of Chai, a payments technology company that partnered with Kwon to form Terraform in 2019. According to Chosun Biz, the lawyer added:
“The cause of the slump [that led to Terraform’s bankruptcy] was due to the unreasonable operation of the Anchor Protocol and external attacks carried out by Do-hyung Kwon after the breakup [between business partners Shin and Kwon]. […] It has nothing to do with the defendant.”
Anchor Protocol was the algorithm used to maintain the value of the dollar-pegged TerraUSD (UST) coin.
The defendants face multiple charges under at least four laws, including the Information Act. The prosecutor claimed, “They took advantage of the fact that investors had difficulty accessing information and had a low understanding of it.”
The prosecutor also said, “A business using virtual assets as a payment method cannot be established,” but the defense lawyer disputed that statement, saying there were no regulations on using virtual assets for payment when Terraform was founded.
The prosecution referred to the United States Securities and Exchange Commission case against Ripple as the basis for several charges relating to violations of South Korea’s Capital Markets Act, comparing the sale of XRP (XRP) to investors to the actions of Terraform in South Korea.
Related: SEC seeks to question Terraform Labs co-founder Daniel Shin in Korea
The defense responded that American law does not apply in South Korea and that “the government has announced several times since 2017 that virtual assets do not fall under the category of financial products (securities),” adding that the Capital Markets law could not be applied retroactively in any case.
The SEC sued Terraform and Kwon for fraud in February.
Korean prosecutors have summoned Terra co-founder Daniel Shin to attend an investigation into insider trading, price manipulation, and breach of duty to Chai customers. Prosecutors allege that Shin illegally cashed out over $100m from LUNA in violation of local securities laws. pic.twitter.com/H6Ysf7se0b
— FatMan (@FatManTerra) November 14, 2022
In November 2022, South Korean authorities seized 140 billion won, worth around $105 million at the time, from Shin. They alleged that Shin had sold LUNA worth that amount, knowing their value would fall. Defense lawyers denied that charge as well.
Unlike Terraforms co-founder Do Kwon, Shin remained in South Korea after the collapse of Terraform Labs in May 2022. He made his first court appearance in November 2022 and was indicted on fraud charges in April. South Korea has issued an arrest warrant for Kwon, but he is currently in Montenegro.
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SEOUL (Reuters) – South Korea’s stock market watchdog said on Sunday it found two Hong Kong-based investment banks had engaged in naked short-selling, which would likely result in record fines.
The two unnamed investment banks made naked short-selling transactions of a total 40 billion won ($29.58 million) and 16 billion won, respectively, the Financial Supervisory Service (FSS) said in a statement.
Naked short selling of stocks – in which an investor short sells shares without first borrowing them or determining they can be borrowed – is banned by the Capital Markets Act in South Korea.
The violations by the global banks were over long periods, for nine months through May 2022 and five months through December 2021, respectively, and expected to result in record amounts of fines, the FSS said.
The FSS said such violations, which came against authorities’ efforts to provide a more favourable environment for foreign investors, should be prevented from recurring and that it would also look into practices at other similar investment banks.
($1 = 1,352.2100 won)
(Reporting by Jihoon Lee; Editing by Muralikumar Anantharaman)
The United States Federal Bureau of Investigation (FBI) has flagged six Bitcoin (BTC) wallets linked to North Korean state-backed hacking group Lazarus. The six wallets contain 1,580 BTC worth $40 million believed to be hoarded from various cryptocurrency hacks over the past year.
The FBI in its investigation found that Lazarus Group moved approximately 1,580 BTC linked with several crypto exploits. These funds are currently sitting in the following Bitcoin addresses:
The FBI warned crypto companies that the movement of funds linked to the infamous North Korean hacking group could be a sign that they are looking to sell. The federal investigation agency advised crypto companies to keep an eye out for the six BTC wallets and use blockchain data to keep track of any movement of funds.
“Private sector entities should examine the blockchain data associated with these addresses and be vigilant in guarding against transactions directly with, or derived from, the addresses.”
The North Korean hacking group has been actively involved in multiple crypto-linked exploits over the years, stealing billions of dollars worth of crypto assets. A recent report from TRM Labs suggests that the North Korean hackers have stolen nearly $2 billion in crypto since 2018. The group was most active in 2022, having stolen nearly $1 billion worth of crypto assets last year alone.
2022 saw some of the biggest decentralized finance (DeFi) exploits, and Lazarus Group was identified as the mastermind behind Harmony’s Horizon bridge and Sky Mavis’ $625-million hack on Ethereum-linked sidechain Ronin Bridge last year.
Related: ‘Nobody is holding them back’ — North Korean cyber-attack threat rises
Although crypto-linked exploits due to code vulnerabilities in platforms and protocols have increased due to the sophistication in methods used by these hackers, blockchain technology still makes it problematic for exploiters to launder or move their ill-gotten gains due to the public ledger that makes it possible to track the movement of funds.
Law enforcement agencies like the FBI, along with crypto companies, have worked together on several occasions in the past to freeze funds linked to such exploits. Earlier in February this year, Huobi and Binance froze $1.4 million worth of crypto assets linked to North Korea. Similarly, $63 million worth of assets linked to the Harmony Bridge hack was also frozen by crypto exchanges.
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The Bank of Korea has narrowed down three regions for the piloting of its central bank digital currency (CBDC), which does not include the country’s capital, Seoul, according to a report from a local South Korean media outlet.
On July 31, it was confirmed that the Bank of Korea has chosen Jeju, Busan and Incheon as its candidates for the “private target CBDC test bed.”
Eventually, according to the report, the bank plans to select one of the aforementioned regions, along with experimenting with payments and distribution at a public level and securing franchises that can accept payments via CBDC.
An official at the bank is reported to have said:
“The CBDC electronic wallet app will allow not only local residents but also many civilians, such as tourists to [partake].”
The Bank of Korea said that the regional closed tests of the CBDC will be similar to the issuance and distribution of the current local currency scheme in place in various regions of South Korea.
The local currency scheme was introduced during the COVID-19 pandemic as a basic income and relief payment solution. Jeju, Busan and Incheon — the regions mentioned as candidates for the pilot — all current issue and distribute their own local currencies such as “Tamranjeon,” “Dongbaekjeon” and “Incheon e-Eum,” respectively.
Related: South Korea strengthens crypto regulation with LEI adoption and crime unit
An official from a commercial bank in Korea is reported to have said that, in Busan, the number of eligible citizens is “so large that the Bank of Korea is burdened in many ways” and, therefore, the choice was “greatly inclined” to Jeju, which has the second largest population.
According to the local report, the local currency scheme has fewer “technical barriers” to overcome compared to CBDCs.
Multiple banks in South Korea have released information that they are conducting research on stablecoins as CBDC alternatives for efficiency purposes.
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