China crackdown legal concerns; Korea discusses virtual asset law

Transcript

So reporting on this story today, I can tell you a lot of nerves are rattled.

Welcome to The Daily Forkast September 29, 2021. I’m Angie Lau, Editor-in-Chief of Forkast.News covering all things blockchain.

Well, China’s crypto crackdown has a lot of people in the business concerned about legal implications. According to China’s PBOC notice, both people and companies providing services to overseas exchanges could be subject to investigation. But just how far could that reach and who is likely to be targeted for investigation? We’re going to take a look at the key issues and more coming up.

Let’s get you up to speed from Asia to the world.

First up – the question China’s crypto ban has raised for many involved in the business is, “are they going to come after me?”.

While we’ve seen some companies in China react by shutting down their services altogether, concerns remain over just how broad the scope of legal investigations could be.

Should Chinese nationals in the country be worried? How about those working overseas? And what are the implications for Hong Kong’s role as a global financial hub? Could a similar ban be introduced?

Forkast.News Timmy Shen got the lowdown from some of the top legal minds who share some insights on guidance.

The full legal ramifications of China’s crypto ban remain unclear, with many worried about just how far investigations could reach. One expert told Forkast.News that while organizations and their employees, which facilitate cryptocurrency trading within the country, and even individual traders, could face penalties, Chinese nationals working overseas may not need to worry so much.

“If I put on my sort of thinking cap of the way that Chinese law would operate, then yes, they may be committing a crime, but the odds of them actually facing any penalty for that would be negligible.”

However, Haswell says there are concerns the ban could overspill into other jurisdictions and that those within Hong Kong may be wondering whether it’s the best place to be.

But Urszula McCormack of King & Wood Mallesons says it remains important to distinguish between Mainland China and Hong Kong.

“We don’t expect to see any change to the current trajectory of the Hong Kong proposals for reforms in relation to implementing a FATF compliant framework for virtual asset service providers.”

Both say they see interesting and sophisticated approaches to development of crypto regulation happening elsewhere in Asia that might tempt those planning to relocate from China.

Meanwhile, David Lesperance of Lesperance and Associates told Forkast.News the ban is designed as a way of exerting control and that eliminating any competition to the digital yuan is the goal.

For Forkast.News, I’m Timmy Shen, Taipei, Taiwan

Meanwhile, over in Korea, the National Assembly has approved a ban on exchange employees trading crypto on their own platform.

The ban, which aims to prevent any risk of price manipulation, is included in the revised crypto regulations that are part of an existing financial law.

And, hot on the heels of the recent crypto exchange regulations that essentially redefined the industry – who can do business, who can’t – the ruling Democratic Party of Korea says it will start examining an independent law for crypto, namely the Virtual Asset Business Rights Act.

Forkast.News Danny Park has more on what this all means for investors in Korea.

The Financial Services Commission revealed that the revised regulations were approved at a national policy meeting on Tuesday.

They include a ban on crypto exchanges trading tokens developed by the operator or an affiliate, and stopping exchange employees from trading crypto on their own platforms.

The FSC says this is necessary for investor protection and better transparency, adding that there was already a case last year where an operator manipulated the price of its virtual assets for profit.

Exchanges are to set those limits within a month or else they may be fined up to 100 million won, or around US$84,0000. Meanwhile, an independent virtual asset business rights law is under discussion.

Park Wan-joo, chair of the ruling party’s policymaking committee, said the committee has started discussions, but lawmaking is not guaranteed and it will be decided only after the two parties reach an agreement.

The new law will focus on defining profit from virtual assets either as financial income or other miscellaneous income, which will be the determining factor in taxing crypto investors.

For Forkast.News, I’m Danny Park.

And finally, today, let’s end on a lighter note here.

Got to tell you about a new crypto trading superstar, and he’s not your average trader. He’s cute, he’s furry. Mr. Goxx is, in fact, a hamster.

His anonymous owners broadcast his trading activities via the streaming platform Twitch, with orders placed by him choosing to head through either the “buy” or “sell” tunnel.

And why is he so popular? Well, like all the best oracle animals, he’s been quite successful with his predictions. According to data from media outlet Protos, he’s actually outperformed stock markets and even the Oracle of Omaha himself, Warren Buffett’s Berkshire Hathaway.

This little guy’s portfolio update on September 28th showed a 16.6% gain over his career so far.

Paul the octopus, you might remember him, proved similarly popular on social media, with his soccer match predictions correctly identifying 12 out of 14 winners during the 2008 Euro finals and the 2010 World Cup.

Of course, it will come as no surprise to find that Mr.Goxx is keeping on trend with the crypto world, launching NFTs now to capitalize on his good fortunes.

Mr.Goxx owners told Forkast.News that they want to remain anonymous, as Mr.Goxx is rightfully the star of the show and that so far he’s made most of his money actually trading bitcoin.

So, given he’s named after the crypto exchange that suffered one of the largest bitcoin hacks in blockchain history, Mt. Gox, it’s a show that we’re going to keep watching, because he’s just so damn cute.

And that’s The Daily Forkast from our vantage point right here in Asia. For more, visit Forkast.News.

And don’t forget to subscribe and like click like and if you want to share even better.

Help us keep doing deep-dive journalism for you in this emerging technology space. We truly appreciate it. I’m Editor-in-Chief Angie Lau. Until the next time.