The crypto space never ceases to amaze. Chinese police discover bitcoin mining rigs in tombs in an alleged effort to steal electricity. South Korea is mauling new amendments to tax crypto-to-cash income gains. On the same token, Japan is not ready to make a tax cut in cryptocurrency income. This and more in this edition of crypto news roundup for Asia.
Japanese Exchange DeCurret Leads National Study on Digital Currency Settlement Infrastructure
Cryptocurrency exchange DeCurrt is leading a Japan study group in which three megabanks are looking into the development of a national digital settlement infrastructure.
According to a press statement published by the exchange, the goal of the study group is to build a “digital settlement infrastructure using valuable digital currencies in Japan.” The group consists of three major banks – Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation – among other non-financial companies such as East Japan Railway Company.
The study group is chaired by Hiromi Yamaoka, the former head of the Payment and Settlement Systems Department at the Bank of Japan (BoJ).
The group’s activities will be closely monitored by the Financial Services Agency (FSA), BoJ, the Ministry of Finance, the Ministry of Internal Affairs and Communications, and the Ministry of Economy, Trade, and Industry.
The group is expected to meet once or twice a month from June to September this year and will discuss “case studies of digital settlements and digital currencies in Japan and overseas’ as well as the “application of new digital technologies such as blockchain and distributed ledger technology in transactions and settlement infrastructure; potential usage areas of digital currency settlements and their impact; vision and future potentials.
At the end of the discussions, the group will publish a report summarizing the discussion points among other things.
South Korea Proposes Amendments to Tax Cryptocurrency Profits
South Korea has not given up on its failed previous attempts to tax cryptocurrency profits. In the latest development, the country’s Ministry of Economy and Finance is tabling new amendments to current tax law to extend to the cryptocurrency industry.
“We are reviewing capital gains or other income tax profits gained by domestic and foreign investors in the transfer of virtual assets,” said an official from the Ministry of Strategy and Finance quoted by Korean media.
The Finance and Economy ministry is enjoying the backing of the Ministry of Information and Technology.
The Finance Ministry is planning to propose the amendments in Parliament in September. The law will go into effect next year if it is approved. The law will apply to cryptocurrency sold for cash at a profit. Crypto-to-crypto and loss-making trades will remain tax-free.
South Korea’s ICON Introduces the BTP Interoperability Technology
South Korea’s largest blockchain project, ICON (ICX) released a technology protocol that enables interoperability between different blockchains.
Several blockchain projects are emerging since the inception of Bitcoin, all competing to be better than competing protocols. They each promise to address issues such as scalability, economic value, and performance among others. However, the whole industry is not making much progress because the blockchains are disconnected and operating in silos.
The ICON network, which aims to ‘hyperconnect the world,’ is using a feature called Blockchain Transmission Protocol (BTP) to make blockchain interoperable.
“To realize blockchain’s full potential, we want distinct protocols to have compatible ways to interact and communicate with each other, and the ability to interoperate at the protocol level. We have not deviated from this goal, and today we present BTP” said ICON in a blog post.
Japan Not Yet Ready to Reduce Crypto Tax Rate
Japan is not letting go of its grip on high cryptocurrency tax rates, at least for now. The island’s Minister of Finance, Taro Aso is adamant not to reduce the crypto tax rate from 55% to a flat rate of 20%, which the country taxes on stocks.
The Finance Minister was responding to Shun Otokita, a member of the Japan Restoration Association who posed the question at a meeting of the House of Councillors Committee on Financial Affairs held recently.
Japanese households hold around 1900 trillion Yen ($17.6 billion) financial assets and around 900 trillion Yen (($8.4 billion) is held in cash deposits. And the financial authorities consider this to be abnormal.
Japan is one of the leading markets of crypto but the tax rate is still more than double that of stocks. This does not sit well with crypto enthusiasts. Crypto-leaning legislators have requested the government to treat crypto-income tax the same way as stocks.
Chinese Bitcoin Miners Turn to Tombs to Conceal Operations
The cryptocurrency is notorious for crazy heists, scams, and other nefarious activities. But miners have also come up with creative and somewhat illegal ways of mining digital assets.
Chines police in the city of Daqing found two mysterious tombs that turned out to be mining rigs. The police went to investigate the scene after a local oil field company sent a tip due to suspicious power losses.
When the police arrived to investigate, they found an entrance and made their way to the tomb where they discovered the mining rig. The miner was stealing electricity.
This is not the only case of mining rigs stealing electricity in China. In the same week, police in Heilongjiang province discovered a bitcoin miner who hid 54 mining rigs under a dog kennel.
Cryptocurrency mining is legal in China although trading the digital assets is illegal. China has become a leading player in bitcoin mining due to the availability of cheap electricity. At the same time, the country is home to some of the world’s largest bitcoin mining equipment manufacturing companies.
Coincheck’s Investigates Data Breach on its Platform
Coincheck, one of the oldest cryptocurrency exchanges in the world, has suffered another security breach. In January 2018, the exchange lost nearly $530 million in NEM currency in what is widely believed to be the biggest heist in the crypto industry.
The exchange, which was later sold as a result of the 2018 hack, has suffered another breach. But this time, it is data at stake and not money or cryptocurrencies.
The Japanese cryptocurrency exchange halted remittance services to investigate the breach and assured its clients that their funds are safe.
In an announcement, the exchange said: “Although there is no impact on your assets at this time, we will stop the remittance of crypto assets in our service again, considering the progress of the investigation by the domain registration service operator. Services such as depositing/withdrawing Japanese Yen and receiving/purchasing/selling crypto-assets can be used as usual.”
The apparent breach could compromise users’ personal data and emails. There is a growing trend of data being sold – normally in bitcoins – on the dark web. A Chinese media outlet reported in early March that hackers were selling account information of 172 million Weibo users for 0.177 BTC.