D-day for Korean crypto exchanges; e-CNY project speeds up

Transcript

Welcome to The Daily Forkast September 24, 2021. I’m Angie Lau, Editor-in-Chief of Forkast.News covering all things blockchain.

Well, it is D-Day in Korea – crypto exchanges have just hours now left to make any last submissions in a bid for survival ahead of full imposition of strict new regulations. Now, as our regular viewers know, we’ve been all over this story and now we’re going to dive into what’s been happening as the minutes tick away and what that means for the greater industry as a whole, plus a whole lot more coming up.

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

First up, doomsday in South Korea for crypto exchanges who have failed to live up to new regulations this day has been looming.

Exchanges must submit a full compliance report by midnight Korea time or else they face closure.

Now around 40, which is more than half of Korea’s crypto exchanges, are expected to simply disappear. A page in the history books of crypto adoption in Korea, if you will.

But regulators say the country’s new crypto regulations are designed to create a safer environment for investors.

So what does this mean for the industry now?

Forkast.News Danny Pak reports.

Crypto exchanges in Korea were given six months to meet requirements under the new law, with the deadline set for September 24.

Only four of Korea’s largest Upbit, Bithumb, Coinone and Korbit fulfilled both requirements. One – getting certified for security of personal information and two – partnering with a bank to provide users with real-name bank accounts for transparency.

24 exchanges have attained the first mandate and will now be authorized to run only token-to-token services, not cash-to-crypto.

Around 35 exchanges that achieved neither will be shut down as of midnight Friday.

One expert says that although the new regulations helped construct a better-qualified industry for investors, the mandate for exchanges to get the bank contract was too big an obstacle.

“Because banks are held liable for their authority [in signing a crypto exchange] they choose not to have that authority, to begin with. Only four out of nearly 300 exchanges that existed in Korea have secured a bank partnership. And those four have been around since 2017. The various innovative exchanges or businesses that appeared with the industry growth since then, all fail to cross the [regulatory] finish line.”

Lee asserts that smaller, brought innovative ideas should be protected under another new law for their virtual asset industry that is currently being developed.

For Forkast.News, I’m Danny Park.

Meanwhile, developments in China’s e-CNY project continue to speed up. An expert from the Export-Import Bank of China, a state-owned policy bank, said the digital currency can be used for overseas payments and has strong international competitiveness.

Now that’s huge. That brings the goal of internationalization of the RMB that one step closer.

The big question is how much of a challenge to the U.S. dollar’s global dominance could it present?

Forkast.News Timmy Shen reports from Taipei, Taiwan,

According to a report from Russian news agency Sputnik. Liu Yihua, a Deputy Director of Marketing Policy Guidance at EXIM and researcher at the Taihe Institute, said that when the e-CNY is used outside of China, permissions from local central banks would be required and foreigners can set up e-CNY wallets with local banking institutions.

However, an official from the PBOC said the digital yuan is still primarily used for the domestic market at the moment, and one expert told us developing international significance may take some time.

“The two parties have to agree, the Chinese and the foreign party. And that is not easy because most people want to trade in the U.S. dollar or, for a fifth of world trade, in euros. It will be very slow, because it will probably be the first central bank digital currency which is traded internationally.”

Roche says while countries like Thailand and Laos will be keen to encourage tourism by allowing e-CNY accounts, and others which sell their goods to China may feel obligated to use it, overall, these are only small contributions.

He says the U.S. dollar gained dominance historically due to its institutional framework, and replacing the factors that allowed it to achieve that position will be no quick or easy feat for any currency to accomplish.

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

And finally, today, if you find a bug in the code, will anybody care?

A showdown of sorts between one anonymous white-hat hacker and Japan-based decentralized exchange SushiSwap.

Now, the anonymous hacker published a report claiming that one US$ 1 billion worth of funds were at risk due to a vulnerability in two of SushiSwap’s contracts – MasterChef V2 and Mini Chef V2. They stated that an emergency withdrawal function designed as a safety net would not work as intended.

Now, the hacker went on to say the issue was reported to bug bounty platform Immunefi, which offers rewards of up to US$40,000 for valid claims.

But developers over at SushiSwap rejected the hacker’s bug claim with a coder from the platform, tweeting “This is not a vulnerability. No funds are at risk.”

And SushiSwap says over 100 invalid vulnerabilities are actually reported to it every month, and anything submitted via Immunefi is triaged within minutes.

Well, as you can imagine, that didn’t sit quite right with the anonymous white hat hacker, accusing SushiSwap of handling the matter too casually and warning other white hats if they think they’re going to get rewarded for their work, you might want to think again.

So this might sound like bickering, but actually there could be bigger implications here. Just last month, a flaw in SushiSwap’s Miso token sale was spotted, and a potential US$350 million worth of losses was avoided thanks to a white hat hacker.

Bounties are kind of like incentives, maybe sometimes better to incentivize those looking out for everyone’s greater interest. You just never know.

And that is The Daily Forkast from our vantage point right here in Asia. For more visit Forkast.News. I’m Editor-in-Chief Angie Lau. Until the next time.