Algorithms are at the heart of 21st century life, invisibly controlling many of the systems we use and take for granted on a daily basis. Pervasive algorithms determine the entertainment we consume (Netflix, Spotify), the information we read (Google), and the chatter we hear (Facebook, Twitter). Its no different in crypto, where complex and ever-evolving algorithms silently govern core processes.

Also read: How to Mix Your Bitcoins Using Coinjoin for Greater Privacy

Algorithmic stablecoin projects have come to the fore in recent years, although fiat-backed stablecoins such as Tether (USDT), USD Coin (USDC), and True USD (TUSD) capture most of the volume. While the concept of dollar-pegged stablecoins is easy to grasp, algorithmic stablecoins are a little more complex. Essentially, they are cryptocurrencies which attain price stability by algorithmically expanding the coins circulating supply to reflect market behavior.

Take Timvi (TMV), for example, an ERC20 token whose algorithm and collateralized algo-stablecoin targets a $1 price to mitigate volatility and breed investor confidence. The security token relies on ETH deposits by participants in the ecosystem, and proprietary financial instruments such as Tbox (an analogue of an interest-free collateral loan), Tbond and Leverage let users earn interest during both bull and bear markets. Timvis algorithm is designed so that the creation of a new Tbox (a blockchain-based account which converts ETH to TMV) does not cause a decrease of the global collateral below the target value.

What if ETHs price drops and impacts the collateral in Tbox, you might wonder. In this circumstance, the Tbox owner must recapitalize by depositing ETH or TMV. If they fail to do so, the Tbox is deemed toxic and other users can step in and do the honors, recapitalizing while earning an ETH commission of 1-6% of the pledged amount.

Reserve is another much-hyped algorithmic stablecoin, backed by high-profile investors such as Coinbase, Peter Thiel and DCG. Messari dubbed Reserve one of their top projects to watch in 2020. Like Timvi, the stablecoin system employs algorithms to manipulate supply and maintain its price ($1), striking a neat balance between stability, decentralization and profitability. Reserve is staffed by a team of 20 including Google and OpenAI veterans, and is advised by Patomak Global Advisors, led by former SEC Commissioner Paul Atkins. Algorithms can also be seen at work regulating ecosystems such as Makerdao, to control its dai issuance and collateralization, and to adjust the supply of Sagas SGA token.

In the old days, traders congregated on the floor of exchanges, barking into phone receivers and making elaborate hand signals. With the advent of electronic markets, however, trades could be executed with algorithms rather than humans, taking much emotion and impulse out of the equation. Such algorithms enabled traders to trigger trades at the optimal price, accounting for factors such as trade size, time of day and market status.

High-frequency trading (HFT) is as popular a strategy in the cryptosphere as it is on the stock market. A subset of algorithmic trading, this high-speed process sees traders utilize algorithmic programs to exploit modest price discrepancies in the markets. Oftentimes, HFT firms will go so far as to situate their trading servers in close proximity to exchanges matching engines to win an edge in speed and make off with handsome profits on arbitrage. This can even be facilitated by the exchange in question, at no extra charge; last year, Singapore platform Huobi began offering this arrangement known as colocation to high-frequency traders, who could expect to make trades 70 to 100 times faster than other users. Gemini and Erisx also offer colocation, hoping it will mean traders choose to do business with them rather than competitors.

Of course, algorithmic trading encompasses a vast range of strategies from time-weighted average price (TWAP), wherein crypto traders seek to buy or sell a fixed amount of an asset gradually over a period of time, to iceberg, where they buy/sell large orders of an asset without revealing the orders true size to the rest of the market. It is difficult to imagine a modern financial market operating without algorithms.

Crypto forensics firms such as Chainalysis utilize proprietary algorithms to monitor and flag suspicious or fraudulent transactions on exchanges, as well as to identify certain individuals operating in the cryptosphere on behalf of hawkish lawmakers and legislators. One software, Chainalysis KYT (Know Your Transaction), tracks transactions made on exchanges using digital assets such as bitcoin, litecoin, ethereum, bitcoin cash, and TUSD.

Firms like Chainalysis are increasingly being tapped up to help crypto platforms achieve regulatory compliance, particularly pertaining to Anti-Money Laundering (AML) processes. They are also employed by government agencies including the Department of Homeland Security, the Drug Enforcement Agency, and Europol, all of whom are desperate to de-anonymize crypto users often with little justification. Its little wonder pro-privacy advocates are concerned about the long-term effects of such incursions. By all accounts Chainalysiss algorithms are incredibly effective, which is why you might want to think about using a coin-mixing service to preserve your privacy.

Fittingly, privacy advocates are hitting back with algorithms of their own; Samourai is developing a tool called Solomon, a smart UTXO selection algorithm that takes the past history of UTXOs as well as user initiated tags into account when composing transactions. It will automatically choose the best UTXOs to combine for optimizing each transaction. As privacy proponent and bitcoiner Lauren MT explains:

Solomon is based on the observation that the cat and mouse game between bitcoin wallets and chain analysis tools is highly asymmetric. CA tools have an almost perfect memory (the blockchain) while wallets are mostly amnesic when it comes to coin selection the first goal of Solomon is to give a memory to the UTXOs controlled by the wallet.

To the developers, this memory provides a more formal tool for reasoning about the benefits/limitations of a specific coin selection algorithm. To the users, it provides useful feedback about the wallet (for manual coin selection, etc) and for the wallet itself, it provides information that can be used by the coin selection algorithm.

The future is algorithmically controlled.

What other algorithms control key parts of the cryptosphere? Let us know in the comments section below.

Images courtesy of Shutterstock.

Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see whats happening in the industry.

Kai's been manipulating words for a living since 2009 and bought his first bitcoin at $12. It's long gone. He specializes in writing about darknet markets, onchain privacy, and counter-surveillance in the digital age.

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The Algorithms That Control the Cryptocurrency Market - Bitcoin News

A Dallas-based company is looking to bring Bitcoin to the masses with a programming interface that can bridge cryptocurrencies with mainstream finance.

Zabo has just completed a $2.5 million round of funding. The startup is targeting traditional banks and financial services by enabling companies to connect to users cryptocurrency wallets in a few lines of code.

The team at Zabo says its goal is tobring crypto into mainstream financial services.

The funding round was led by seed-stage venture capital firm Moonshots Capital. Several crypto and blockchain industry heavyweights participated in the fundraise including Blockchange Ventures, Castle Island Ventures, Digital Currency Group, CoinShares, Tezos Foundation and Capital Factory.

Says Christopher Brown, co-founder at Zabo,

Despite being on a path to touch billions of customers and be an asset class measuring in the trillions of dollars, cryptocurrency is very underserved relative to other financial services. This is partly because connecting cryptocurrencies, wallets, and exchanges to the traditional financial system is highly technical and complicated. Zabo solves this by dramatically reducing the complexity. We enable leading financial services companies to swiftly and easily integrate into hundreds of leading cryptocurrency wallets with just a few lines of code.

Zabo launched in September 2019 to connect the fragmented space of crypto wallets, accounts and protocols. Last year it launched Papercrypto, a risk-free, crypto-portfolio simulation to help newbies demystify, derisk, and devour cryptoconfusion.

The Dallas-based startup says its working to re-imagine the current financial infrastructure by cooperating with teams of developers across a full range of sectors.

Zabo Use Cases

The company lists integrations with 14 leading cryptocurrency exchange: Binance, Bittrex, Bitfinex, BitMEX, Bitstamp, Coinbase, Gemini, HitBTC, Huobi, Kraken, Kucoin, Liquid, OKEx and Poloniex.

Zabo plans to use the investment to expand its engineering and to grow its customer base.

Featured Image: Shutterstock/mervas

Read more:
Industry Heavyweights Push to Bring Bitcoin (BTC) and Cryptocurrency to Billions of Customers in Banking and Fintech Sectors - The Daily Hodl

It is welcome that the Supreme Court has nixed an RBI circular preventing any entity regulated by it from dealing with cryptocurrency transactions. This meant that while cryptocurrencies were themselves not banned, dealing in them was. The courts ruling hinges on the lack of proportion between ban and the yet-to-be-demonstrateddamage potential of cryptocurrencies, which are themselves not banned. If the government were to come out with a ban, the courts ruling would be rendered infructuous.

Instead of banning cryptocurrencies, the government should empower RBI to regulate them, not as stand-ins for fiat currency but as commodities that can perform some of the functions of money make payments, store value, serve as a unit of account.

This does not mean that the Supreme Court has put its stamp of approval on bitcoins and their assorted clones, whose peddling as fantastic investment options is a prime goal of many who cheer the court verdict. Fools are free to part with their money in whichever way they choose. Bitcoins have swung wildly in value and only those who are financially most secure and have the stomach for extreme risk would be advised to treat them as investment assets.

It is not because bitcoin exchanges are now free to work that the court verdict is welcome. Bitcoin and its clones are just one type of tokens on the blockchain. There are several other kinds of tokens, including contracts and currencies, whose values are calibrated against a basket of major world currencies, that could be created and would be of immense use to society. Fintech could do wonders with the blockchain for example, cut the cost of cross-border remittances from the minimum of 5% today to 1% or less.

The world desperately needs to free itself from American ability to weaponise the dollar, bar those who violate US sanctions from dollar networks. One way out is a blockchain-based currency, whose value is calibrated against a basket of major world currencies, to settle international payments that do not involve a US counterparty. The RBI ban proscribed such innovation.

This piece appeared as an editorial opinion in the print edition of The Economic Times.

Originally posted here:
Good Riddance to Cryptocurrency Bar - Economic Times

The cryptocurrency market is full of optimism once again. Bitcoin and all major altcoins are growing strongly with bullish trend seem to be gaining momentum. BTC/USD rushed above $9,000 and hit the intraday high at $9,126. Both ETH and XRP smashed important resistance levels and continued the upside quest. The total capitalization of all digital assets in the circulation jumped to $260 billion, while an average daily trading volume is registered at $130 billion

The positive news from South Korea might have become the last straw that pushed the market outside the ranges. The News Asia reports that the Parliament of the South Korea passed an amendment to the Act on Reporting and Use of Specific Financial Information, which signals that cryptocurrency trading and holding will become a part of the legal system. This development is expected to lead to a complete revamp of the domestic blockchain industry.

Once the amendments are approved by the president, a year-log of enactment process will start. Once it is over, the companies will have six-months of a grace period to ensure the compliance with the requirements. Allegedly, blockchain and cryptocurrency companies shall bring their operations in full compliance with the regulatory requirements by September 2021.

A flow of positive news, including yesterday's announcement that India's Supreme Court cancelled the ban on cryptocurrency trading, caused the industry players jump with joy.

BTC/USD is moving fast towards the next important resistance of $9,250, created by a combination of SMA50 daily and 23.6% Fibo retracement for the downside move from July 2019 high to December 2019 low. It is closely followed by $9,300. Once it is out of the way, the upside is likely to gain traction with the next focus on $9,600.

ETH/USD gained nearly 4% since the beginning of Thursday and hit $234.65, which is the highest level since the beginning of March. The next strong barrier comes at $245.70. It is created by SMA100 4-hour and followed by psychological $250.00.

XRP/USD managed to break free from the range and hit the intraday high of $0.2429.

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Cryptocurrency market rallies with gains across the board as South Korea allegedly legalizes crypto trading - FXStreet

You might beamazed at the high returns the crypto-world has to offer or just fascinatedwith this new talk-of-the-investment-town. The reason can be anything; thepurpose is that you want to kick-start your journey in this world. But, beforeyou do so, it is important to spare time and understand how to go about it.People who are making money on this platform didnt just wake up one finemorning and started getting results. That is not how it works.

The first step isto reckon that you arent financially mature enough, and there is a lot of workinvolved behind the scenes to make a difference. Otherwise, if not at once, atsome point in the way ahead you are sure to lose money. It is simple, seecryptocurrency as an asset and just like before investing money in an asset,you try to learn about its returns, the production process, and other factors.Why not do that with crypto as well?

Below, I havecompiled a list that works for the same purpose: to establish your standing fora head-start in the world of crypto. Keep reading.

Dont jump into crypto without a clearunderstanding

Just because yourfriend from work made a fortune from cryptocurrency doesnt mean you will jumpinto it without any knowledge about its basic functioning and conditions. Of course,you can also earn the numbers you desire but rushing and hurrying is definitelynot the way ahead.

Thus, if you arehere for the long run, you must first understand its course of action. Forinstance, how many of you know the central bank does not regulatecryptocurrency? It is instead built on a peer-to-peer network. What are thefactors that cause their rates to multiply and divide? What led to the cryptoboom in the year 2018? Is this approach to earning secure enough? If there waseven one question in this set that went unanswered, then get back to the groundand start researching!

The employedprinciples of cryptocurrency ensure that everything is secure and safe from theviewpoint of third parties. Crypto operates on a similar mechanism like foreignexchange. It works through transactions, which is the transfer of funds betweenwallets. When the transactions are confirmed they are referred to mining andare stored in the public ledger. Of course, all of this is a lot more complex.So before you dump in your first investment in the crypto game, make sure yourresearch is on-point and you are well-aware of the basics of cryptocurrency.

Note: Browselatest updates and news in the crypto niche here https://top10bitcoinrobots.com .

Expects Ups and Downs

If the primaryreason you are beginning to invest in crypto is because you think the graphonly rises, DONT!

In fact, cryptois a very volatile market and expect-the-unexpected kind of genre ofinvestment. Just because it has been going up for a while, does not mean itwill always go up. There are more chances than not that the bubble will burstvery soon.

Like I mentionedearlier, the policies of the central bank dont apply to cryptocurrency, whichmeans politics will not play a role. But, on the other hand, there are a lot ofother factors that majorly affect its value, that requires individual attentionand learning

Heres a quickexample for you to explain the volatility of the crypto market: Back in the year2017, there was an unprecedented boom of Bitcoins. But a few weeks into 2018,and Bitcoinplunged nearly by 60%. You read thatright!

If I had to putit in a sentence, it would be Cryptocurrency isnt for the faint-hearted.

Move ahead with a Strategy

All your researchwork on crypto will be useless if you havent used it to carve out a plan ofaction or strategy of your own. If you are business, accepting payments in theform of crypto can prove to be a legitimate approach and a threat to otherbusinesses. However, you must be aware of all the businesses/industries thataccept payments in crypto.

Even though therehas been a lot of discussion on this topic: I think, initially, you mustconsider cryptocurrency as speculating rather than investing. You can alsoinvest conservatively considering the volatility, despite all the mainstreamattention. Whatever it may be, work on a strategy, because if you go with theflow, you might just be drowned in losses.

Research! Its common sense

The numerousbenefits of this point make me emphasize it EVERYTIME. When it comes to buyingcryptocurrency, a go-to strategy will be to buy when the price is considerablylow. That is what most people do. However, if its value is on a constant slideand is expected to fall more in the near future, its wise not to invest in it.

The more youresearch the more you will observe charts and other analysis tools on trendsand price movements. Thats the thing, the more you research the more you willbe able to predict appropriate future movements.

Although, you canreach out to a cryptocurrency broker who will do all the research work for you.However, remember no one can replace self-research.

Practice Investing

It is when youhave performed the above 4 things with efficiency, I believe you are nowactually ready to invest and practice on the markets.

This is when youhave got a better understanding of cryptocurrency and you can kick-start thereal game. Before you invest, as I said, crypto and forex hold similarities;you can try your newly-learned skills on demo foreign exchange accounts. Thiswill actually advance your senses on how crypto actually works. You will getreal-time experience on how to spot opportunities, trends, risks and learn howto make transactions.

Securing Cryptocurrency

Back in 2017, Bitcoinsrelation to fraud tripled. So, securing your crypto is a must. Try to use a highly securewallet or only use the ones that have positive reviews, reputable names and aredependable. Although nothing comes with a guarantee, this is relatively moreauthentic. Also, remember to use strong passwords and two-factorauthentications. Try to be as rigorous as you can.

Wrapping up!

Investing incryptocurrency is a process and not a regular If I can do this, I can do cryptoalso. There is a lot of groundwork that must be invested to actually make afortune or even living from the same. Especially for a newbie, try not to makerookie mistakes. After all, it is your real hard-earned money on the stakes.

Related

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Are you ready to invest in cryptocurrency? - Modern Diplomacy

KEY POINTS

With the Fed making an emergency rate cut on Tuesday in response to the growing coronavirus fears which now poses a risk of the U.S. and other countries going into recession, many believe that the virus could be a "black swan" event that would impose negative effects to the global economy.

The stock market, although surging higher yesterday thanks to coordinated responses to the virus and a strong performance from Joe Biden, it did suffer its worst week last week since the 2008 financial crisis. The Dow dropped 12.4%, the S&P500 fell 11.5%, and Nasdaq shed off 10.5%. And, surprisingly, despite the rate cut, the market responded with massive selloffs before the uptick on Wednesday.

Over at the crypto-verse, there is also the same concern of a black swan event triggered by COVID-19 trickling to the nascent market that imperils Bitcoin and other cryptocurrencies. "Black swan" is a term coined by Lebanese-American scholar, statistician, and former trader, Nassim Nicholas Taleb, and it refers to sporadic events that no one could have foreseen coming and have a severe impact to society and the economy.

Bitcoin (BTC) is still considered a risky asset despite plenty in the crypto space asserting correlations of the leading crypto to macro events, which appear to have been coincidental after all. Indeed, BTC traded higher in January amid the U.S. and Iran conflict, and during the reopening of trading in the Chinese market in February, but investors didn't seek safety in the top crypto last week as its decline was sharper than the three major stock indexes.

A black swan, according to Matthew Hougan, the vice president of Bitwise, could accentuate more of BTC's pitfalls like the lack of regulation and clampdowns on crypto trading on certain exchanges could seriously dampen prices.

And even if it's designed to be "recession-proof," some believe that it's still too early for BTC to survive such a drastic event. Still, there are some positive aspects to look at a black swan due to the coronavirus that Heather Morgan, founder of SalesFolk, highlighted, including a wakeup call for the healthcare system in the U.S., for people to be more prepared for such instances, and most importantly, a correction that the stock market badly needed.

Bitcoin Photo: Bitcoin

View original post here:
Coronavirus Could Be 'Black Swan' That Kills Bitcoin, Cryptocurrency: Here's Why - International Business Times

There are a number of ways people can obtain cryptocurrencies and one of them is through airdrops, a type of distribution where creators send free coins to numerous crypto wallet addresses in order to drive adoption. Airdrops have been leveraged for years and token distributors believe that its a great way to disburse coins fairly and to raise awareness. New airdrops are announced nearly every month that allow people to obtain free digital tokens.

Also read: $65M Investment Fuels Natural Gas Providers Behind-the-Meter Bitcoin Mining Operation

In the world of cryptocurrency, airdrop defines a type of crypto distribution where free coins are sent to multiple digital wallets. Sometimes people have to engage in community building efforts like retweeting a project or completing a survey in order to gain the tokens. The idea is to distribute airdropped assets so people become aware of the tokens as they are dispersed far and wide. Some airdrops that have been released over the years have gone from zero to gathering real-world value when measured in other digital currencies like BTC, BCH, or ETH.

One of the oldest and most popular airdrops in history was auroracoin (AUR) which was meant to be a cryptocurrency designated for Icelands citizens. The term airdrop started floating around the crypto scene when the creators of auroracoin announced the issuance period that started March 25, 2014. Icelandic residents with a permanent resident ID could register on the website to receive 31.8 AUR which at the time was worth $385. Today each AUR is only worth $0.07 per coin and that initial airdrop dubbed the cryptocurrency for Iceland would only be worth $2.17.

After AUR, many other famous airdrops followed the distribution scheme, giving away cryptos for free. Furthermore, projects that launched and established themselves years prior have airdropped coins as well. Decred airdropped 258,000 DCR in 2016 and in 2017 Stellar (XLM) gave away 19% of their total token supply to people who owned BTC. A number of airdrop projects use the concept of attempting to leverage an existing and established network effect of users from other blockchains.

More recently, initial coin offering (ICO) projects and token application creators have leveraged airdrops in order to establish themselves within the cryptoconomy. Airdrops have been fueled by established projects with token standards operating on networks like Ethereum and Bitcoin Cash. Since the inception of the Simple Ledger Protocol (SLP) token standard, airdrops have become part of the BCH community. Now people can randomly airdrop SLP tokens to numerous public BCH addresses any time they want.

For instance, individuals and organizations can leverage Bitcoin.coms SLP Dividend Calculator to airdrop SLP tokens to a valid token ID. In order to use the platform, simply visit the tools webpage and enter the token ID of the SLP coin you wish to airdrop. After that, you will need to enter the receivers SLP token ID, the total number of SLP tokens to airdrop (dividend payment), and then build the transaction. After the transaction is built, a QR-based payment invoice will be made available to complete the airdrop.

If you are not into making your own tokens and distributing an airdrop yourself, you can always search the net for any upcoming airdrops. For example, the website airdrops.io is an online resource that discloses which airdrops are coming out next.

The site shows the hottest airdrops, latest airdrops, exclusive airdrops, Telegram channels with airdrops, Twitter airdrops, and basically every coin giveaway under the sun. Airdrops.io verifies and aggregates airdrops and bounties daily to bring you the most recent and profitable earning opportunities. Choose an airdrop and follow the instructions provided to claim free crypto tokens, the website notes.

A few airdrops advertised on the website include coin giveaways from Bitcoin Rhodium, Pointpay, Simbcoin, Escher, Daps, and Binance Jex. For each airdrop, the website explains the giveaway details and how to get involved. Theres a bunch of other airdrop-guide and review websites as well like airdropter.com, coinairdrops.com, and airdropalert.com.

Usually, there are two ways airdrops are distributed by their creators, which is selecting recipients at random or letting people know on social media, forums, and websites like airdrops.io. In the crypto world, some users could care less about airdrops and think they are garbage with negligible value.

However, other crypto enthusiasts comb the internet daily in search of these free coin giveaways with hopes of catching some free money. It is worth noting, though, that government tax agencies have taken notice of airdropped coins and you could get taxed for receiving them. Entities like the IRS have issued guidance in regard to airdropped cryptocurrencies. The U.S. tax agencys airdrop guidance, however, is confusing and organizations including lawmakers want better clarification. As long as cryptocurrency exists, airdrops will likely continue and distributors will take advantage of the crypto communitys powerful network effects.

What do you think about airdrops and the numerous amounts of cryptocurrency giveaways in the cryptoconomy? Do you search for airdrops or do you think they are a waste of time? Let us know what you think about this topic in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. None of the aforementioned airdrops or airdrop recommendation/review sites are endorsed by our website. The data is strictly for informational purposes and research, as all readers should use due diligence with any crypto project within this ecosystem. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Image credits: Shutterstock, airdropter.com, coinairdrops.com, airdropalert.com, airdrops.io, auroracoin (AUR), Blockchain.com, Stellar (XLM), Fair Use, Wiki Commons, and Pixabay.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.

Originally posted here:
Cryptocurrency Airdrops and Giveaways: What They Are and What's Next - Bitcoin News

Mar 05, 2020 at 17:10 // News

As the Special Money Act passed the South Korean National Assembly's plenary session, the Enforcement Decree is in full force.

This raises a keen interest among blockchain and cryptocurrency industry and investors about what will change as a result of passing the special law. On March 5, the Act on Reporting and Use of Specific Financial Transactions (Special Fund Act) passed the plenary session.

As the bill passed through the Judicial Committee was expected to pass without difficulty, the law was passed without much disagreement at the plenary session. It is expected that there will be many changes in the industry as the special law, the first regulation law in the cryptocurrency industry, is passed.

The cryptocurrency industry has been pursuing the 'real name verification virtual account' since 2018. Since January 2018, except for four domestic exchanges (Cobit, Bithumb, Coinone, Upbit), exchanges have not been issued a real name verification virtual account. Even the upbeat is that the real name verification virtual account is limited to existing members, so new members cannot trade through the won.

In addition, all exchanges without a real name proof virtual account have been operated through the so-called 'honeycomb account'. If you operate an exchange through a honeycomb account on the borderline between legal and illegal, there is a possibility that it will be used for facilitating illegal activities especially money laundering because it is difficult to track a clear flow of funds. It is also vulnerable to voice phishing and is vulnerable to hacking. There are no special guidelines, and the exchanges are in trouble. It is not unrelated to the fact that there are a lot of bad exchanges and investors suffered.

The Special Act includes the introduction of a 'report system' for cryptocurrency exchanges. The Special Money Act states that those who may be denied reporting are those who have not obtained the Information Security Management System Certification (ISMS), or those who do not conduct financial transactions through deposit and withdrawal accounts that can verify their real name. Upbeat will allow Upbeat to extend its real name verification account to new members, but all exchanges except the four major exchanges will be denied reporting and will be closed.

However, as a result of the agreement, the amendment to the Special Allowance Law was decided to loosen the requirement through the enforcement decree in the case of the real name proof virtual account with a six-month suspension for ISMS. The death penalty has been imposed on badly traded exchanges that operate without the minimum security device, ISMS, and do not meet the requirements for issuing real name virtual accounts.

This seems to be because the law has a big purpose in protecting investors. In fact, the damage to investors through bad trading and fraudulent exchanges is enormous.

The industry is looking forward to the next enactment. As virtual accounts are included in the tax amendment, issuance should mitigate the requirements for healthy exchanges to operate normally.

The special law is essential to the implementation of the FATF's recommendations issued in June last year. In order to evaluate the implementation of the recommendation this June, it was necessary to pass as soon as possible. In addition, the passage of the special allowance law will provide a basis for taxation of cryptocurrencies.

Recently, the government was reported to be reviewing the taxation policy on cryptocurrencies. In fact, a policy symposium for establishing a cryptocurrency taxation policy has been actively held, and the Ministry of Strategy and Finance's Income Tax Concession has been designated as the main department to oversee cryptocurrency taxation.

No tax on cryptocurrency has been charged. In the case of corporations, they were paying corporate taxes, but no tax was set when they made profits from cryptocurrency transactions. It may be because the tax policy was not set, but it was difficult to track the flow of funds because the cryptocurrency exchange and the operation are different.

The Special Money Act includes a proposal to implement the FATF's recommendations and provide accurate transaction details to prevent money laundering. As a result, it is possible to charge the exact tax generated by the transaction.

If the tax issue is resolved through the special tax law, it will also provide a framework for institutional financial assets to enter the cryptocurrency industry. It is necessary to establish a legal taxation system to be recognized as a financial asset.

Most of all, the industry expects that various blockchain and cryptocurrency laws will be created through exceptional bonus laws. It is expected that more laws will be created in the related industries as the cryptocurrency industry is incorporated into the system through the special law.

The blockchain and distributed ledger technology (DLT) industry has continually asked the government to not just release regulations, but create regulations to do business.'' In the absence of clear regulations, business uncertainty has only grown. The hardest thing about doing blockchain related business is that there are no regulations.

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Korea Passes Special Law on Cryptocurrency, What Will Change in the Future? - Coin Idol