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Media CoverageDue to weak regulations, 'listing fees' dominate cryptocurrency exchanges.
Why do coins from companies without a proper blueprint continue to get listed on exchanges? What is happening at these exchanges? (omitted) The listing contract is a document that outlines the obligations of both the issuer and the exchange regarding the listing. It helps to understand how a coin gets listed. According to the contract, an issuer wishing to list must submit five documents to the exchange: △a white paper, △a checklist, △a technical review report, △a circulating supply confirmation, and △an ethics pledge. The exchange then reviews these documents through its internal review committee before listing the coin. The most important of these documents is the white paper, which contains basic information about the coin, such as the reason for issuance, the supply, and future plans. However, in Korea, it is difficult to distinguish between good and bad projects just by looking at the white paper. This is because the law does not specify the mandatory contents of a white paper. When reviewing various white papers, it's not uncommon to find white papers that present more 'plausible' blueprints rather than technical details. Hyeonsu “Elliot” Jin, managing partner at Decent Law Firm who specializes in cases related to virtual assets, said, "In Korea, there are no set rules on what must be included in a white paper. If you look at multiple white papers, you'll realize there's no standardized format." In contrast, Europe has legally established detailed requirements for white paper content. Last month, the European Union (EU) passed the 'Markets in Crypto-Assets (MiCA)' law, which mandates that white papers include not only basic information like the issuer's name and institutional identification code but also descriptions of potential conflicts of interest.
2023-05-23 Segye Ilbo -
Media Coverage
The lawsuit over the cryptocurrency 'Ripple' has been postponed indefinitely.
As the U.S. court's decision on whether the cryptocurrency Ripple (XRP), currently ranked 6th in market capitalization among all cryptocurrencies, qualifies as a security has been delayed, domestic investors are feeling confused. Predictions suggest that the outcome of the Ripple lawsuit may be postponed until next year, meaning this uncertainty is likely to continue for the time being. (omitted) Experts have varying predictions about the Ripple lawsuit. While Ripple has a fair chance of winning, the SEC's arguments are also valid, making the outcome dependent on the judge's discretion. Additionally, the possibility of a dramatic settlement between the two sides has recently emerged as a new variable. Pureun “Ian” Hong, managing partner at Decent Law Firm, which specializes in virtual assets, stated, “If Ripple loses, the virtual asset industry will be significantly impacted. Given the potential fallout, the court is likely being cautious about delivering its judgment.”
2023-05-23 biz.chosun -
Media Coverage
Binance's acquisition of Gopax faces difficulties, with customer deposits held hostage.
As Binance, the world’s largest cryptocurrency exchange, faces difficulties in acquiring the domestic virtual asset exchange Gopax, it has played a "hardball" card. Binance has threatened that unless financial authorities approve its acquisition of Gopax, it will be unable to return the 50 billion KRW in customer assets tied up in Gopax. (omitted) Pureun “Ian” Hong, managing partner at Decent Law Firm, which specializes in virtual assets, stated, "According to Article 7, Paragraph 3 of the Special Financial Information Act, a virtual asset service provider cannot have its registration accepted if it has a criminal record, such as being fined for financial-related crimes in Korea." He further explained, "Binance is currently under pressure from the U.S., so while it may not be easy to punish the company under domestic law, if the authorities take this into account, they could exercise discretion and reject the registration change of the board of directors.
2023-05-09 biz.chosun -
Media Coverage
U.S. SEC vs. Exchanges, Virtual Assets: 'Securities vs Commodities'
Host: Anchor Choo Hye-jung Guest: Hyeonsu “Elliot” Jin, managing partner at Decent Law Firm Q. What is the current state of virtual asset regulation in Korea? The government is pushing to amend the Enforcement Decree of the Special Financial Information Act The Financial Information Act does not reflect current market conditions, which is problematic Applying the Capital Markets Act to virtual assets is excessive Q. What is the current state of virtual asset regulation in the U.S.? The U.S. SEC is strengthening virtual asset regulations Ongoing debates between the U.S. SEC and exchanges over whether virtual assets are 'securities vs. commodities' The SEC has filed mass indictments against cryptocurrency exchanges, causing Bitcoin to wobble on the New York Stock Exchange Q. What is the current state of virtual asset regulation in Europe? The European Union passed the world’s first Markets in Crypto-Assets (MiCA) law "Europe will soon be the global standard"... the Brussels effect on the crypto market Q. Is the legislation of the Basic Digital Asset Law gaining momentum? With the passage of the Virtual Asset User Protection Act by the National Assembly’s Political Affairs Committee, there is growing optimism for legislation In Korea, uniform regulation is applied to tokens Domestic regulations on non-security digital assets: ① Disclosure regulations ② Unfair trading regulations ③ Operator regulations Q. What are disclosure regulations? Proposed disclosure regulations: ‣ Limiting the qualifications of digital asset issuers to domestic and foreign corporations ‣ Requiring submission of a digital asset plan to the regulatory authorities If intermediary fees are generated during digital asset transactions, compliance with issuance disclosure obligations is expected Q. What are unfair trading regulations? Unfair trading regulations are expected to include prohibitions on price manipulation and fraudulent trading activities Specific conditions such as insider scope and the importance of information are to be discussed Q. What are operator regulations? Planned provisions include changes to entry requirements for unregistered digital asset businesses Regulations are expected to address obligations such as digital asset custody and prohibitions on incomplete sales Digital assets must be segregated and managed separately from the company’s proprietary assets Q. What are the U.S. regulatory requirements for virtual assets? In 2022, U.S. Congress submitted the Lummis-Gillibrand bill U.S. digital asset regulatory measures: ① Security token regulations ② Commodity token regulations ③ Payment ④ Consumer protection The U.S. applies activity regulations based on token types If security-type digital assets comply faithfully over a certain period, disclosure obligations may be eased Digital asset issuers are required to disclose token information Q. What are the EU regulatory requirements for virtual assets? The EU passed the world’s first virtual asset law, MiCA, which will take effect in June next year The EU recognized the need for specific laws on crypto-assets to protect investors EU applications of crypto-assets: ① As an alternative payment method ② As a new fundraising tool Alternative payment methods provide efficient international opportunities by limiting intermediaries New fundraising tools minimize burdens on small and medium-sized enterprises (SMEs) in securing capital The EU's MiCA law lays the foundation for the digital age of crypto-assets In Korea, regulations are focused on protecting investors by imposing restrictions on operators
2023-05-08 NBN NEWS -
Media Coverage
Shin Hyun-seong of 'Terra' indicted on charges of Capital Markets Act violation and fraud.
Host: Reporter Jang Se-jin Guest: Pureun “Ian” Hong, managing partner at Decent Law Firm Q. Shin Hyun-seong of 'Terra' indicted on charges of Capital Markets Act violation and fraud Shin Hyun-seong, General Representative of Chai Corporation Prosecutors recognized the 'securities nature' of Luna Coin… the first indictment case in Korea Q. What is the full story of the 'Terra-Luna' crash? Algorithm-based stablecoins: Luna (LUNA) and Terra (UST) "Terra's price will always be $1" The formula of '1 Terra = $1' broke The collapse of the dollar peg impacted the entire virtual asset market Q. What is the current status of the investigation into 'Terra-Luna'? 'Terra-Luna cryptocurrency incident' led to the arrest of Do Kwon in Montenegro 'Terra' Shin Hyun-seong indicted for Capital Markets Act violation and fraud Q. What is the difference between a dismissed arrest warrant and an indictment? Unrestricted investigation: an investigation conducted without the suspect being detained Q. When is a suspect detained and indicted? Detention and indictment occur when there is a risk of flight or evidence tampering Q. What is detention and indictment? Detention and indictment involve requesting a court trial while the suspect is in custody Q. Will Shin Hyun-seong face an unrestricted indictment? Prosecutors indicted 10 people, including 'Terra-Luna' co-founder Shin Hyun-seong, without detention Q. What are the charges against Shin Hyun-seong in the unrestricted indictment? Prosecutors stated, "The Terra project was a fiction that could not have been realized from the beginning" Shin Hyun-seong indicted for Capital Markets Act violation and fraud Q. What is the connection between the 'Terra-Luna' incident and the Capital Markets Act? The indictment of Shin Hyun-seong over Terra-Luna marks the first case of recognizing 'coins as securities' "The standard for determining whether coins are securities will impact the future of the virtual asset market" Q. How does the Capital Markets Act apply to Shin Hyun-seong’s charges regarding coin securities? "Luna is a security"... the Terra-Luna fraud marks the first indictment under the Capital Markets Act Q. Why did the court's ruling on the 'Terra-Luna' case diverge? In the investigation of the 'Terra-Luna' incident, the key issue is defining 'investment contract securities' Q. Why is the determination of coin securities so important in the 'Terra-Luna' case? If Terra-Luna is recognized as a security, strict regulations will apply The case highlights the need for new laws governing coins Q. What is the future direction of the trial for Terra-Luna co-founders Shin Hyun-seong and Do Kwon? Prosecutors emphasize that proving the securities nature is 'key'
2023-04-28 NBN NEWS -
Media Coverage
Coinbase launches a 'counterattack' with a lawsuit against the U.S. SEC
The largest global cryptocurrency exchange in the U.S., Coinbase, has launched a counterattack against the U.S. Securities and Exchange Commission (SEC). On the 24th of this month (local time), Coinbase filed a lawsuit forcing the SEC to respond to a petition it had previously submitted. In July of last year, Coinbase submitted a petition to the SEC, asking for answers to 50 questions, including how existing securities laws could be applied to virtual assets and the method for classifying virtual assets as securities. (omitted) Hyeonsu “Elliot” Jin, managing partner at Decent Law Firm, stated, "Since the lawsuit has been filed, the SEC must respond. However, if the SEC replies that it has already provided sufficient guidelines and explanations, there is a high likelihood that the lawsuit will be dismissed. Coinbase is likely aware of this and has made a strategic decision." He added, "As the largest cryptocurrency exchange in the U.S., it won’t be easy for Coinbase to leave the U.S. entirely. However, there is a strong possibility that they will separate their U.S. and overseas services to continue providing them."
2023-04-27 Korea Economy