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South Korea focuses on OTC crypto regulations as unlawful deals reach $4B

September 18, 2023 Coin Telegraph

South Korea focuses on OTC crypto regulations as unlawful deals reach B

bitcoin regulation

According to the Korea Customs Service report, the value of unlawful foreign exchange transactions made using digital currency was estimated to be worth $4 billion last year.

South Korean regulators have turned their focus to over-the-counter (OTC) crypto trades amid growing concerns about their use for criminal activities. The financial regulators in the country are reportedly monitoring trading in the OTC crypto market.

According to a report published in a local daily, deputy chief prosecutor Ki No-Seong and Park Min-woo of the Financial Services Commission (FSC) and other vital regulatory officials attended a session on “Criminal Legal Issues Related to Virtual Assets” with a focus on the unregulated OTC crypto market. During the event, No-Seong called for regulating the OTC crypto market due to money laundering concerns.

A Google-translated version of Seong’s statement read:

“Illegal virtual currency OTC companies have overseas corporations and are engaged in the business of converting illegally obtained virtual currency into Korean won or foreign currency. There is a need to regulate these companies as undeclared virtual asset trading businesses.”

The term “OTC crypto market” describes exchanges that are not officially recognized by the government. Digital currency OTC transactions include all transactions outside regulated platforms, including peer-to-peer (P2P) exchanges. According to the report, there are a total of 172 cryptocurrencies available on Upbit, the largest regulated crypto platform in South Korea, while OTC platforms offer up to 700 cryptocurrencies.

The report cited several instances of the use of OTC platforms to convert digital assets into Korean won. The International Crimes Investigation Department of the Incheon District Prosecutors’ Office arrested and indicted three people on charges of engaging in illegal foreign exchange transactions between October 2021 and October 2022.

The arrested trio were found to be purchasing $70.9 million (94 billion won) worth of digital currency from overseas OTCs at the request of Libyans and then sending it to Korea to be converted into cash, according to the report. The value of unlawful foreign exchange transactions made using digital currency was estimated by the Korea Customs Service to be worth $4 billion (5.6 trillion won) last year.

Over the years, South Korea has become known for its stringent crypto regulations and has several regulations in place to tackle crypto-related crimes. The country’s regulators have become more proactive in the wake of Terra’s collapse.

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Blockchain platform for trading securities OTC moves forward with SEC approval

April 17, 2023 Coin Telegraph

Coin Telegraph

Upon approval, both the SEC and the FINRA will become Certificate Holders in the private blockchain, allowing regulators to view transactions and access the network governance.

A Delaware company is seeking registration with the United States Securities and Exchange Commission (SEC) to carry out over-the-counter (OTC) stock trading on-chain.

BlackStar Enterprise Group has been developing the platform since 2018 and spent almost two years in communication with the regulator, answering dozens of questions and comments from examiners. Recently, the company has taken the next step in providing a detailed plan to the SEC Trading and Market division about how its platforms will be operated.

BlackStar CEO Joseph Kurczodyna told Cointelegraph that he sought the SEC’s permission to build the platform’s demo in 2018. “We have proved that U.S. registered securities can be traded digitally on a blockchain, that the process is compliant with broker dealers’ back-office and SEC rules," commented the senior executive.

The platform will allow trading OTC securities within the existing regulated brokerage ecosystem from the Financial Industry Regulatory Authority (FINRA) and SEC, the company said in its filings. As stated in the document:

“For example, customers will continue to use brokerage accounts and broker-dealers and the transfer agent will continue to maintain the shareholder records. [...] All custodial duties are intended to remain the same because the platform will pass encrypted customer information to buy or sell orders to the appropriate parties."

According to Investopedia, OTC refers to the process of trading securities via a broker-dealer network, rather than through a centralized exchange such as the New York Stock Exchange (NYSE).

BlackStar’s platform is built on a private blockchain and powered by Amazon Quantum Ledger Database. Kurczodyna said it would remain in the testing phase until licensed to a broker-dealer, clearing firm or Alternative Trading System (ATS).

Upon approval, both the SEC and FINRA will become Certificate Holders in the blockchain, with full access to transactions. Tokens, crypto assets and short selling transactions will not be supported on the platform.

“From a timing standpoint, we feel this is an exciting time for BlackStar. Our proposed digital trading platform [...] could potentially help resolve multiple existing trading issues, including concerns related to fraud in the U.S. financial markets,” claims Kurczodyna, who believes the platform will increase transparency and mitigate risks of investing in OTC stocks.

A similar development is taking place in Germany, where the government wants to use blockchain technology to power stock trading. A recently introduced legislation targets the capital markets’ digitalization through the issuance of electronic securities on a blockchain, aiming to make the stock markets more accessible to startups and small businesses.

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EOS Network lands $60M investment and partnership from DWF Labs

April 13, 2023 Coin Telegraph

EOS Network lands M investment and partnership from DWF Labs

Coin Telegraph

DWF Labs invests over $60 million in a partnership with the EOS Network Foundation, providing a $45 million EOS token purchase agreement and a $15 million pledge for EOS-based projects to expedite growth and adoption.

In its most substantial investment to date, DWF Labs, a digital asset market maker and investment firm, has announced an alliance with the EOS Network Foundation (ENF), entailing an investment deal worth over $60 million. EOS is a Layer-1 network for developers looking to build blockchain-based games (GameFi) and deploy decentralized applications (dApps).

DWF is bolstering the EOS Network by means of a $45 million EOS token purchase agreement and a $15 million pledge to invest in businesses and projects based on EOS. This pledge is aimed at expediting the expansion and acceptance of the EOS Network.

The ENF plays a pivotal role in the EOS network’s development by coordinating support, creating feedback loops for innovation, promoting community involvement, allocating funding and facilitating the growth of the EOS ecosystem.

The timing of this collaboration is advantageous, as the EOS Network is set to unveil its enterprise-grade EOS Ethereum Virtual Machine (EVM) on April 14, featuring that surpasses Polygon, BSC and Avalanche, with over four times more swaps per second.

The synergy between DWF Labs and the EOS project is set to unlock potential in the blockchain ecosystem and the world of web3. The partnership will bring together their respective expertise and resources, ensuring a future for the EOS Network.

DWF Labs has emerged as an investor during the crypto bear market. Recent investments have included a $20 million fundraise for derivatives trading platform Synthetix and a $40 million raise for AI-focused crypto protocol Fetch.ai.

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Paxful shutdown hits Nigeria harder than the rest of the world, here’s why

April 5, 2023 Coin Telegraph

Coin Telegraph

Paxful’s shutdown has left its global community heartbroken, but it has significantly impacted the Nigerian community, where it pioneered P2P crypto use.

The shutdown of the peer-to-peer (P2P) cryptocurrency marketplace Paxful has left its worldwide community searching for alternatives, but it appears to have significantly affected the Nigerian crypto community.

On April 4th, Paxful declared that it would halt its operations. The reason for this decision, according to the founder and CEO Ray Youssef’s blog, was due to “key staff departures” and the regulatory environment.

According to a study by Chainalysis’ 2020 Cryptocurrency Geography Report, Nigeria ranked eighth in crypto adoption and usage among 154 countries included in the study. Acceptance and usage of crypto in Nigeria were not as high until Paxful pioneered the use of peer-to-peer technology in the country, helping expand the crypto industry.

A Nigerian crypto user, Emmanuel Susegh, told Cointelegraph that the shutdown of Paxful feels like “the death of a loved one,” as the exchange helped him make his first $100,000. Susegh went on to say that Paxful was the go-to platform he used to trade gift cards from Amazon and Apple for Bitcoin as far back as 2015.

Another member of the Paxful Nigerian community, data analyst Obinna Uzoije, mentioned that in the early days of his career, he used Paxful to exchange the dollars he received from his employers as pay for naira. Uzoije explained that this shutdown leaves a lot of other crypto enthusiasts in Nigeria wondering what the future holds for crypto marketplaces.

Over-the-counter (OTC) vendor Akeem Abdullahi expressed that a generation of OTC vendors was created by the existence of Paxful’s escrow service. The vendors were able to buy gift cards from individuals who wanted to sell and were not literate enough to use the platform.

Some community members took to Twitter to express their worry about users getting their funds back. However, Youssef has assured users in a tweet that the Paxful team is working on clearing users’ send-outs.

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Arbitrum token finds its way to OTC market before the airdrop

March 21, 2023 Coin Telegraph

Airdrop

Following the Arbitrum airdrop announcement, crypto users who have been eligible for the airdrop are already selling them in OTC markets.

The Arbitrum community is speculating and selling off their unreleased ARB tokens in over-the-counter (OTC) markets following the Arbitrum airdrop announcement.

The Arbitrum Foundation announced that ARB, Arbritrum’s new token, will be airdropped to eligible community members on Thursday, March 23. It explained that ARB marks Arbitrum’s official transition into a decentralized autonomous organization (DAO), meaning ARB holders will be able to vote on key decisions governing Arbitrum One and Arbitrum Nova — networks that allow users to transact on the Ethereum blockchain with better speeds and lower fees.

OTC trading allows easy buying and selling of cryptocurrencies directly between a seller and a buyer. The process is usually very fast and funds are transferred directly from a bank account to the seller. In this case, when a price is agreed on by the buyer and seller, the seller receives payment from the buyer and then gives up the seed phrase linked to the eligible wallet.

Jack, who wants to remain anonymous, has explained to Cointelegraph that the craze to sell off the unreleased ARB tokens is based on speculations about the market cap of the tokens when launched. He explained that the price of one $ARB coin, when launched, could be as high as $1, so most people do not mind selling at $0.5 per token and giving room for a possible profit of $0.5 for the buyers.

have secured 6-figs of $ARB OTC at an avg. price of $0.98

wish me luck
— Cole (@cole0x) March 21, 2023

Arbitrum holds 55% of the Ethereum layer-2 market share, according to layer-2 analytics site L2 Beat. As one of the largest crypto projects without a token, anticipation for an Arbitrum token has been at a fever pitch since the network went live in 2021.

With the ARB’s total circulation number of 10 billion, The Arbitrum community will control 56% of those tokens – the airdrop will grant 11.5% of the total supply to eligible Arbitrum users and 1.1% to DAOs that operate in the Arbitrum ecosystem.

The Arbitrum community has also warned others to stay vigilant after reports of phishing websites and scams offering Arbitrum airdrop tokens.

Arbitrum’s main competitor in the Ethereum scaling space, Optimism, launched its OP token nearly a year ago when it made its own transition to DAO governance.

OTC

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