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South Korea crypto debate heats up; Bitcoin mining ETF starts trading

South Korea crypto debate heats up, also Bitcoin mining ETF starts trading

South Korea’s crypto tax debate heats up.

Bitcoin mining ETF begins trading on Chi-X.

Cream Finance suffers another hack.

We’ll have more on those stories — and other news shaping the cryptocurrency and blockchain world — in this episode of The Daily Forkast October 28.

Transcript

Boy band BTS is back on our minds today, but not for the most obvious of reasons.

Welcome to The Daily Forkast October 28, 2021. I'm Angie Lau, Editor-in-Chief of Forkast.News, covering all things blockchain.

Well, boy band BTS are hitting the crypto headlines in Korea for the second day in a row, except this time they're being used as political fodder, as the country argues over new crypto tax.

We're going to take a look at that and a whole lot more coming up.

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

First up, South Korea's crypto tax debate is heating up. I guess this is what happens when boy bands are involved.

While the country's National Tax Service has already consulted with 28 exchanges on crypto gains tax law compliance, many are still against implementing it in January as planned and more are piling on.

In fact, one lawmaker has now questioned the validity of taxing virtual assets when the Korean government, he says, can't even figure out how to make a dime out of BTS's NFT merchandise.

The argument does have a chance of sticking politically.

Forkast.News Danny Park reports on the latest from Korea's crypto front.

Get your crypto wallets hot or cold ready, that's what Koreans are preparing for. That's because South Korea is planning to tax 20% on any income from virtual assets over about US$2,100 starting January 1.

Authorities are getting ready. The National Tax Service met with 28 exchanges to provide guidance on the new crypto tax law, as exchanges need to submit transaction data on virtual assets to the authorities for taxing.

However, investors and a growing number of Korean lawmakers aren't going to let it happen without a fight, resisting this new tax law since the start.

Lawmaker Noh Woong-Rae of the ruling Democratic Party, who had previously proposed a delay of the crypto tax, criticized the tax law as the government's excessive administration.

And on Wednesday Noh said that that fairness should be guaranteed in taxing, but the current virtual asset tax system has too many loopholes. Again, asking the tax to be levied a year later with better infrastructure in place.

One of the loopholes he brought up involves the much anticipated NFTs of the K-pop mega group BTS. Noh asserted that it is unfair to push forward tax on cryptocurrencies when NFTs, despite gaining such huge popularity, are exempt from the levy.

Earlier this month, Korea's Finance Minister, Hong Nam-Ki, said NFTs are not included in virtual asset taxes as they are not yet classified as virtual assets under the income tax law. And that's not the only thing being criticised in the tax policy.

"Right now, [Korea] can tax virtual asset transactions on the exchanges. But transactions on exchanges are not all. P2P (peer-to-peer) transactions may be the main [source of income]. When it can’t even tax P2P transactions and only tax virtual asset trade on exchanges, I think surely, transactions through the exchanges will shrink."

Oh says delaying the tax law one or two years won't do. Instead, the government should tax crypto when it's completely foolproof.

For Forkast.News I'm Danny Park.

Meanwhile, yet another bitcoin focused ETF has gone live in this part of the world.

Just two weeks after the Australian Securities Exchange approved a similar product. The Cosmos Global Digital Miners Access ETF has launched on rival exchange Chi-X.

Using the Global Digital Miners Index, the fund tracks listed companies that source at least 80% of their revenue from digital asset mining and infrastructure.

Mining for alpha anyone?

Forkast.News Lachlan Keller has more from Melbourne Australia.

Created by Cosmos Asset Management and trading under the name DIGA, the fund will follow companies like Marathon Digital, Riot Blockchain, Hive Blockchain Technologies and Hut8 mining group.

Cosmos told Forkast.News they initially considered a Bitcoin spot ETF.

"But as we sort of did our analysis and looked at, you know, the picks and shovels of companies involved, we saw an opportunity to bring investors DIGA, which is the Cosmos Global Digital Miners Access ETF, as a way to give investors exposures while we sort of walk through the exchange and regulation challenges."

Annan says Chi-X was an attractive option as they are open to new ideas and innovative products, citing it helping to bring active ETFs the Australian market as an example.

Using the ticker "CRYP", the ASX recently launched the BetaShares Crypto Innovators ETF, which gives exposure to companies working in the digital asset space, such as the crypto exchange Coinbase and MicroStrategy, which has the largest bitcoin holdings of any publicly traded company in the world.

For Forkast.News, I'm Lachlan Keller from Melbourne, Australia.

And finally today, DeFi protocol Cream Finance has been hit with yet another hack.

In what could be one of the biggest flash loan attacks in DeFi history, Cream Finance confirmed in a tweet that it had lost about US$130 million worth of tokens.

The DeFi platform subsequently said it had halted its V1 lending markets on Ethereum and is putting together a post mortem review.

Now, this is not the first time Cream Finance has been exploited - back in February, hackers used DeFi protocol Alpha Finance to take out about US$38 million and in August, another hack eventually led to a loss of US$35 million.

In a post mortem after that attack, it said stolen crypto would be replaced so users wouldn't face liquidity issues.

Now, according to CoinGecko, the Cream token plummeted just over 34% within 24 hours in the wake of the news, with its price at just over US$100 Thursday morning Asia time.

And they aren't the only DeFi platform to suffer this year, by the way. Poly Network suffered a US$600 million hack in August, though that hacker did eventually return the assets, and another attack that same month saw Japanese crypto exchange Liquid lose over US$90 million worth of cryptocurrencies.

So today's homework assignment has to be - check your code.

And that's The Daily Forkast from our vantage point right here in Asia.

Hit like, hit subscribe.

And don't forget to head over to our bitcoinandbeyond.io site and register for our first global summit on November 10 in Asia, we have some of the biggest names in the industry and a fantastic lineup, and it couldn't be a party without you.

So please do join us.

For more, you can always visit Forkast.News, I'm Editor-in-Chief Angie Lau. Until the next time.

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