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S. Korea’s SK Telecom to Develop Web3-Powered Crypto Wallet Despite Ongoing Slump

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SK Telecom, from South Korea, is looking to foray deeper into the blockchain and Web3 sectors. The Seoul-based telecom giant has decided to create and operate a crypto wallet, powered by advanced Web3 capabilities. SK Telecom has partnered two blockchain firms — AhnLab Blockchain Company and Atomrigs Labs — to assist the development of its crypto wallet. This step from the South Korean telecom major comes at a time when the overall crypto industry is undergoing market turbulence. The company, however, is aiming to become one of South Korea’s early-most adopters of the blockchain and Web3 technologies.

As per the Korea Information Society Development Institute (KISDI), SK Telecom held over 47 percent market share in the country in 2021.

Now, the company wishes to bank on its market reputation to onboard crypto investors on its digital wallet initiative.

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SK Telecom plans to enable storing, transferring, and receiving of blockchain-backed tokens on its upcoming wallet. These tokens include cryptocurrencies as well as non-fungible tokens (NFTs).

This is not the first step that SK Telecom has taken as part of its Web3 exploration.

In July 2021, the 1984-established company, had announced the launch of its own metaverse space called ‘Ifland’.

As per a report by Forkast.News, Ifland has a monthly active userbase of over one million.

While cryptocurrencies act as a mode of payment and rewards in the metaverse, engageable NFTs add life to the digital universe.

With its wallet service, SK Telecom could be looking to stitch all these different elements of Web3 together in one thread.

As for now, the release date of this crypto wallet remains undisclosed.

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The government of South Korea, meanwhile, has been giving positive responses to the Web3 sector.

Earlier this year, Lim Hyesook, minister of science, information and communication technologies in South Korea announced that the nation is planning to invest over $177 million (roughly Rs. 1,372 crore) in supporting metaverse projects that will also trigger job opportunities in the sector.

South Korea is witnessing a boom in crypto adoption. The crypto market there swelled up to $46 billion (roughly Rs. 3,66,318 crore) by the end of 2021, with the number of users reaching nearly 5.58 million or around 10 percent of the country’s population, as per a study by South Korea’s Financial Service Commission.


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European Central Bank Steps in as Banks Test Crypto Waters Ahead of Pan-EU Licensing Rules

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European Central Bank Steps in as Banks Test Crypto Waters Ahead of Pan-EU Licensing Rules

The European Central Bank (ECB) said on Wednesday it would harmonise how banks offer cryptoassets to ensure they have enough capital and expertise in a sector some European Union lawmakers have described as the Wild West. Several crypto companies like Binance and Crypto.com have been authorised in EU countries such as Italy, France, Spain, Greece or Germany after complying with national safeguards to combat money laundering and terrorist financing.

This comes ahead of pan-EU licensing rules from 2023 at the earliest.

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The ECB said banks were also considering whether to get involved in the crypto sector, but that national rules diverged quite extensively.

“In Germany, certain crypto activities are subject to a banking licence requirement and to date, several banks have requested to be authorised to conduct these licensed activities,” the ECB said in a statement.

“It is in this context that the ECB is taking steps to harmonise the assessment of licensing requests.”

The ECB, which directly regulates top euro zone lenders such as Deutsche Bank, UniCredit and BNP Paribas, said it would examine if crypto activities were in line with a bank’s risk “profile”, which determines how much capital to hold.

The ECB will also check if a bank can identify and assess risks from cryptoassets and if board members and IT staff have “robust experience” in the sector.

“Importantly, working closely with national supervisors, the ECB will strive towards greater consistency in prudential assessments across national regimes,” the ECB added.

Global regulators at the Basel Committee in Switzerland are assessing whether there should be specific capital buffers for holdings of crypto assets at banks.

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The EU is also reviewing its bank capital requirements law.

Ville Niinisto, a Green Party member of the European Parliament, has proposed an amendment that bank holdings of Bitcoin and other cryptocurrencies not backed by assets should not exceed 1 percent of a bank’s core tier 1 measure of capital.

Such a cap would need the backing of the full parliament and EU states to become law, a lengthy process.

Niinisto has also proposed regulators should assess if bespoke capital requirements are needed for blockchain, which underpins cryptoassets.

© Thomson Reuters 2022

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Genesis Announces New Interim Chief, Cuts Jobs by 20 Percent Amid Ongoing Crypto Winter

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Genesis Announces New Interim Chief, Cuts Jobs by 20 Percent Amid Ongoing Crypto Winter

Genesis Trading on Wednesday named chief operating officer Derar Islim as the interim head of the crypto broker and said it had reduced its headcount by 20 percent. Islim is replacing Michael Moro, who is stepping away from the CEO role effective Wednesday, the company said.

The New York-based company is the latest in the cryptocurrency space to be hit by the so-called “crypto winter”, which has compelled a string of high profile firms to shrink their workforce in recent months.

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Before the layoffs, Genesis employed nearly 260 people, a spokesperson for the company said.

Last month, Genesis disclosed it had exposure to bankrupt crypto hedge fund Three Arrows Capital, another casualty of the receding interest in digital assets.

The company, however, had mitigated its losses after Three Arrows failed to meet a margin call, outgoing CEO Moro said at the time, adding that Genesis parent Digital Currency Group had assumed some of the crypto broker’s liabilities.

Genesis has also named Tom Conheeney, who was the president of former hedge fund SAC Capital and its successor Point72 Asset Management, as a senior advisor.

Moro will advise the company through the transition, Genesis said, adding it had begun to search for a full-time chief executive.

Meanwhile, even as the cryptocurrency sector shivers in the bleak winter, venture capitalists are pouring money into digital currency and blockchain startups at a pace that’s set to outstrip last year’s record, Reuters reported in July.

In the first half of the year, VCs bet $17.5 billion (roughly Rs. 1,39,600 crore) on such firms, according to data from PitchBook. That puts investment on course to top the record $26.9 billion (roughly Rs. 2,14,630 crore) raised last year, a warmer and happier time for Bitcoin and co, according to the report.

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© Thomson Reuters 2022


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Coinbase Insider Trading Could Be More Widespread Than First US Case, Study Claims

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Coinbase Insider Trading Could Be More Widespread Than First US Case, Study Claims

The US charge against a former Coinbase employee may not be the only instance of insider trading at the cryptocurrency exchange, according to a new study. Some traders appear to have snapped up tokens ahead of 10 percent to 25 percent — or 15 to 37 — of Coinbase listings since 2018, wrote three academics at the University of Technology Sydney. Federal prosecutors had indicted a former Coinbase worker last month for profiting from at least 14 announcements, in a sign of growing regulatory zeal in the asset class.

Coinbase did not respond to requests for comment.

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Coinbase’s status as the largest publicly traded crypto exchange means a listing can open up a token to many more buyers, fueling a sharp price bump that makes it profitable to purchase it before a listing announcement. Some less formal studies in the past have also observed the same pattern at other major platforms such as Binance.

The UTS researchers looked at how tokens also available on decentralized exchanges traded during the 300 hours before Coinbase announced they were going to be added to the platform. That’s based on a hypothesis that insider trading was more likely to occur in venues such as Uniswap, which typically don’t require identity checks. Using statistical analysis, the authors then estimated the number of instances where the price rally was likely linked to an insider buying the tokens based on knowledge of upcoming listings, rather than simply bullish speculation.

On average, coins that traded on decentralized exchanges jumped 40 percent compared to a market benchmark during the 300 hours before the Coinbase announcement. They rose another 2 percent over the subsequent 100 hours, the study found. There wasn’t much of a pattern for coins not on Uniswap. The researchers — Ester Félez-Viñas, Luke Johnson and Tālis J. Putniņš — chose the 300-hour window based on observations of insider trading on the blockchain, Putniņš said.

While the academics arrived at the 25 percent estimate from statistical analysis, the 10 percent lower bound comes from blockchain transactions found in four wallets. They are possibly linked to the three men charged by the US, but there is no way to be certain, Johnson said.

Between anonymity and a perceived lack of regulation, “this is an environment where you’re likely to find financial crimes and misconduct,” said Putniņš, a finance professor at the university. “Here we have a unique data set — the blockchain — which we don’t have in the stock market that allows us to get more direct evidence.”

The indicted ex-employee and his brother have pleaded not guilty, arguing what they did was not insider trading since it did not involve securities or commodities. The former product manager’s lawyer also contended the information isn’t confidential anyway.

© 2022 Bloomberg L.P.

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