This Week in Crypto: $1.5 Billion Crypto War Chest, Blockchain Startup Failures, and Tether Airdrop

April 10, 2020

Another week has come and gone. The crypto industry is growing despite the global unrest caused by the Covid-19 pandemic. South Korea’s central bank launched a pilot program to test the feasibility of issuing a central bank digital currency. Singapore’s Bybit derivatives exchange is planning to airdrop 1,000 Tether tokens to its active users. 

South Korea pilots central bank digital currency (CBDC) to play catch up with other nations

South Korea’s central bank, the Bank of Korea (BOK), launched a pilot program for a central bank digital currency (CBDC) after observing that a number of developed nations such as Japan and the US are forging ahead with plans to issue national CBDCs.

The Korean bank has ditched its wait-and-see attitude to push for a 22-month long pilot project starting this month and ending in December 2021. The project will assess the technical and legal feasibility of replacing cash with a digital version.

An official quoted by The Korea Times said, “The U.S. and Japan had had no plans to issue a CBDC in the near future, but they changed their stance recently to enhance research in the emerging area. 

“The BOK also decided to remain proactive in the rapid shift in payment environments here and abroad, so we are going to set up the CBDC pilot system and check technical and legal issues surrounding its introduction here,” added the official.

The central bank said it does not see an immediate need to release a CBDC but is only doing so to be prepared if such a currency becomes a necessity. The BOK has been skeptical about CBDC. However, the bank pledged to share its research findings with other major central banks.

Crypto lender bags institutional investor for Asia markets expansion

Crypto lending and borrowing platform BlockFi announced on April 9 that it has landed Singaporean hedge fund and cryptocurrency investor Three Arrows Capital as a strategic partner. The crypto lending platform did not reveal the size of the investment made by Three Arrows Capital.

Three Arrows Capital, an institutional client of BlockFi, focuses on emerging markets and has shown tremendous growth in Asia and global markets.

“In being an institutional client of BlockFi, we quickly recognized that the company’s mission of helping to expand the cryptocurrency ecosystem aligned with our own philosophy for the space,” said Three Arrows Capital co-founder and CEO Su Zhu. “We have had a great relationship with BlockFi and when presented an opportunity to become more involved on the investor level, the answer was evident. BlockFi has grown at an impressive rate and we are looking forward to helping propel the company forward in global markets.”

Singaporean crypto derivatives exchange Bybit airdrops stablecoin Tether

Based in Singapore, crypto derivatives platform Bybit is set to airdrop Tether (USDT) tokens after unveiling perpetual contracts for the stablecoin, the market leader in its segment. Tether is the fourth largest cryptocurrency with a market capitalization of $6.3 billion at the time of writing.

Bybit has made this move to capitalize on the derivatives market. Experts are predicting more institutional flow into the market. Authorities in countries such as Japan are tightening their regulations due to an increase in the popularity of crypto derivatives trading. On the other side of the coin, the UK has shown its willingness to outlaw crypto derivatives due to the risk it poses to retail investors.

According to a press statement shared with Blocknomi, active traders on Bybit could receive a maximum of 1,000 USDT, depending on their wallet and trading volume size.

“The launch of the USDT perpetual contracts on Bybit is a cause for celebration, and this airdrop will incentivize traders to hold the most liquid and trusted stablecoin on the market,” said Bybit CEO Ben Zhou. “Small traders, as well as big players, will be rewarded according to their activity, giving all Bybit users an incentive to get involved.”

North Korea’s $1.5 billion cryptocurrency war chest funds the nation’s illicit activities

Experts puzzled by how North Korea, despite sanctions imposed on it, still manages export and import goods, think that the country has a cryptocurrency war chest valued at $1.5 billion. This crypto stash is believed to be funding the country’s illicit trade.

Blockchain intelligence and analytics firm Chainanalysis said in a recent webinar that it is ‘comfortable’ with the projected $1.5 billion figure. Previous estimates have pegged the country’s crypto stash to range between $200 million and $500 million. 

“When it comes to trade-based money laundering, the issue, especially for sanctioned actors, is cross-border money movements,” Chainanalysis global head of policy and regulatory affairs Jesse Spiro told Coindesk. “When you talk about how North Korea could actually execute this in relation to finances, I believe crypto is used to facilitate it.”

Report: Majority of Chinese blockchain firms that failed in 2019 were scams or poorly planned

Most of the Chinese blockchain startups that went under in 2019 were either cryptocurrency scams or poorly planned, says a research report sent to Cointelegraph by Chinese research firm EqualOcean.

The research analyzed 70 blockchain firms that shut down in 2019 and found that 70 percent failed to make it through the first year and 30 percent did not make it past six months.

“A considerable number of which were crypto exchanges that involved scams, digital wallets and decentralized applications that used multiple-level marketing, and public blockchains that did not have a defined business model,” reads part of the report.

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