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Korean firm Uprise Shorts LUNC; Loses $20 Million

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Uprise, a South Korean company platform for cryptocurrency investments, purportedly lost nearly 99 percent of its assets, or $20 million, when it was forced to liquidate shorting the Luna Classic (LUNC) coin.

The trading desk of Uprise Heybit employs a trading system using artificial intelligence (AI) that was created to lessen the risks involved with leveraged trading.

Seoul Economic Daily, a local news source, stated on Wednesday that Uprise’s AI, which it refers to as a “robo-advisor,” made a terrible error in May on LUNC as it plummeted sharply from $60 to pennies.

The system shorted LUNC but was liquidated along the road because of the token’s strange price spikes, resulting in $20 million in losses for the customers and $3 million for the system itself. Nearly all of Uprise’s assets were lost altogether.

High-net-worth people and businesses who stake their cryptocurrency for the return produced by AI trading on futures markets make up the majority of customers of the firm’s Heybit service. The Hashed cryptocurrency investment group, Kakao Ventures, as well as several banks and venture capital organizations, have all funded the company.

Uprise has not made a formal announcement about the losses

Despite suspending services, the company has not formally informed its clients of the losses. That was confirmed by an Uprise representative to Seoul Economic Daily.

“Due to great unexpected volatility in the market, there has been damage to customer assets. We plan to finalize the report on our virtual asset business soon.”

Uprise authorities are apparently working on a compensation scheme for its clients, in addition, to publicly informing its consumers so that it may continue to run.

The Terra issue and its following infection have caused large losses, according to Uprise, the most recent centralized crypto service provider to disclose them. It joins the list of companies that have had to take dramatic measures to attempt to stay viable, which also includes BlockFi, Celsius, and Voyager Digital. 

Korea’s Crypto Exchanges Are Planning to Form a New Emergency System

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Korea’s major crypto exchanges have agreed to develop a new emergency system that will activate within 24 hours if another Terra-style crash threatens to occur.

Exchanges will gather under the new method to respond to sudden unfavorable market consequences, such as what happened with Terra in May.

According to a source from local news outlet Daily Sports, the agreement came after five of the country’s top crypto exchanges, Upbit, Bithumb, Coinone, Korbit, and Gopax, attended a session at the National Assembly, South Korea’s legislature, on Monday to discuss market fairness.

Korea’s new system to tackle a Terra-style fall

Exchange officials, members of the National Assembly, and Chairman Lee Bok-Hyeon of the Financial Supervisory Services (FSS) addressed components of a new code of conduct that exchanges will voluntarily follow to protect investors.

In September, the new code will also see the launch of a warning system to alert investors of especially high-risk virtual assets due to extraordinary price changes or other unusual activities.

Listing standards will be revisited in October, and a regular evaluation system for all listed tokens will be implemented.

The collapse of the Terra ecosystem in May resulted in tens of billions of dollars in losses and a flurry of legal issues for Do Kwon, the company’s creator, who was confirmed to have cheated the government out of roughly $40 million in taxes.

Do Kwon, the South Korean founder and CEO of Terraform Labs, has been the center of attention for Korea’s exchanges. The notorious Financial and Securities Crime Investigation Team, often known as the Grim Reapers of Yeoui-do, has been investigating Kwon for alleged wrongdoing and tax evasion.

According to The JoongAng news outlet, the Grim Reapers unearthed records from the Seoul tax office on Wednesday, claiming and confirming that Kwon and Terraform Labs dodged roughly $40 million in corporation and income taxes in 2021.

Terraform labs employee investigated by S.Korean police for alleged BTC fraud

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According to a Korean news site, the Seoul Metropolitan Police Agency is reportedly initiating an investigation against a Terraform labs employee who allegedly embezzled Bitcoin, LUNA and Terra company cash, following the disappointing utter collapse of original Terra.

According to the report, the police received information in the preceding period that a person suspected of being a Terraform Labs employee was embezzling business assets, so they sought that the funds be frozen using a virtual currency exchange and then launched an investigation.

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However, it has been stated that the link between Terraform Labs CEO Kwon Do-hyeong and embezzlement has yet to be established. A police official said,

“It was intelligence about an employee’s personal embezzlement.”

Furthermore, separately, the Joint Financial and Securities Crime Investigation Team of the Seoul Southern District Prosecutors’ Office had also received and is interpreting evidence of possible violations of the Act on the Regulation of Fraud and Similar Receipts under the Act on the Aggravated Punishment of Specific Economic Crimes, including allegations against CEO Kwon.

Terra’s biosphere crumbled after the Terra UST depegging in May. After a sharp price drop, the original LUNA lost all of its value, causing billions of dollars in losses. Changpeng Zhao, Binance’s CEO, said that the company lost $1.6 billion on its LUNA investment.

New Terra blockchain under-performs

The new Terra blockchain, which has only been operational for a week, is already falling short of expectations. Terra 2.0 went live on May 28 as part of Terra co-founder Do Kwon’s community-approved “Terra resurrection” strategy. The original Terra blockchain was abandoned after its collapse and rebranded as Terra Classic.

LUNA 2.0 got off to a shaky start, losing about 70% of its value in the first 24 hours, as many had predicted. Since then, the price of the LUNA 2.0 coin has remained unchanged. LUNA was trading at $4.49 at the time of publication, down 15.55 percent in the last 24 hours, according to CoinMarketCap statistics. The previous LUNA was trading for around $86 when the TerraUSD (UST) stablecoin lost its dollar parity on May 6.

Litecoin’s Confidential Transactions Lead to Warnings by Korean Exchanges

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The latest privacy-focused MimbleWimble upgrade to the Litecoin (LTC) blockchain has prompted two of Korea’s leading crypto exchanges to issue investment warnings about the fifth-largest cryptocurrency.

On Monday, Bithumb and Upbit, which together account for the majority of South Korean trading volume, released statements cautioning investors about the risks of the privacy-enhancing upgrade.

Litecoin’s adoption of the privacy-focused technology Mimblewimble, according to Bithumb, allows users to do “secret transactions,” which allow them to send tokens while masking transaction data. Upbit also made a similar statement.

Korea’s Act on the Reporting and Use of Specific Financial Transaction Information, which requires cryptocurrency exchanges to undertake to Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, was mentioned by the two exchanges.

Exchanges issue warning against Litecoin investors

Korean exchanges have a history of delisting cryptocurrencies after providing similar warnings. The other two major South Korean exchanges, Korbit and Coinone, have yet to make any announcements.

The MimbleWimble update concept was first proposed nearly two and a half years ago. The new upgrade was released earlier this year after a majority of nodes authorized the MimbleWimble (MWEB) version. It will be able to interface with new MWEB privacy features. It was completed at Litecoin’s 2 million block height.

The MimbleWimble Litecoin upgrade has been the most eagerly anticipated in the history of cryptocurrencies. MWEB provides LTC users with not only additional privacy features, but also significant blockchain performance improvements. On the Litecoin blockchain, MWEB removes superfluous transaction data from blocks, allowing for more discrete transactions.

In 2011, Litecoin was launched as one of the first Bitcoin competitors (BTC). According to CoinMarketCap, it has a market cap of more than $5 billion, making it the 18th most valuable cryptocurrency.

Crypto Remained the Most Important Aspect of Korea’s Presidential Election

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In Korea’s presidential election, contenders fought tooth and nail to gain the support of uncertain young voters. Both candidates went to great pains to make their campaigns nasty.

According to statistics, over 40% of Koreans aged 20 to 30 possess crypto assets, and overall crypto trading volume exceeds the KOSPI stock exchange.

The prohibition on initial coin offerings (ICOs), which was enacted in 2017, was the first focus of both candidates. Both candidates were aware of the dangers and provided potential remedies.

Candidate Lee Jae-Myung stated that ICOs would be allowed if sufficient safety precautions were implemented but did not specify what those safeguards were.

On the other hand, now-president Yoon Suk-yeol proposed using bank-backed crypto exchanges to convert ICOs to IEOs.

Candidates showered crypto support to lure Korea’s youth

Yoon issued his own NFTs a week before the elections after obtaining an advantage by detailing how he’d manage ICOs. Yoon said that he would release a total of 22,329 NFTs at a price of around $40 each.

His opponent, taken off guard, proclaimed right away that he’d be raising airdropped NFTs as well, but he couldn’t match Yoon’s impact.

Yoon Suk-yeol won by less than 1% on March 9th, bringing the campaign to a close. Both candidates used crypto ideologies to appeal to the younger generation, assuming that the old guard had already settled on a candidate and would not alter their minds.

However, a week before the elections, the research found that adults in their 40s and 50s in South Korea had a significant quantity of cryptocurrency assets.

Upbit and Bithumb, the region’s two largest crypto exchanges, provided the figures. According to average data, the 40-50 age bracket accounted for approximately 52 percent of total users on both platforms.

The data shows the 2018 crypto boom among 20 and 30-year-olds, while the present main participants are 40 and 50-year-olds with significant financial power and stock exchange expertise.

Both candidates’ doctrines may have appealed to a considerably more significant number than they thought, making the election’s outcome even more important.

Korean Won [KRW] trading pairs are the latest to lose a spot on Binance

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Binance has bid adieu to an array of things over the last couple of months and Korean Won [KRW] trading pairs happened to be the latest to leave the platform.

One of the world’s most popular crypto exchanges, Binance had fallen under the purview of regulators from across the globe. The exchange had to deal with extreme scrutiny from these financial watchdogs. While the pressure persists and as the exchange continues to tackle them, it was seen discontinuing several services or support for certain assets.

Regulators from Japan, UK, Singapore, and the Cayman Islands were seen calling out Binance for operating in their respective regions without a proper license. Following this, the exchange lost prominent banks like Barclays in the UK and had also temporarily seized GBP withdrawals.

Now, in an effort to comply with the South Korean financial regulators, the exchange revealed that it would no longer support Korean Won trading pairs.

Korean Won shown the door

In a recent blog post the cryptocurrency exchange pointed out that would discontinue an array of offerings in Korea. This list included, the Korean Won trading pairs, KRW payment options, P2P merchant applications as well as Korean Language website support. KRW trading pairs would lose prominence in the Binance P2P section starting from 13 August 2021 post 11:00 UTC.

The exchange further noted that it was pulling the plug on the aforementioned services in order to comply with the regulations put forth by the South Korean government.

The blog post read,

“Our aim is to create a sustainable ecosystem around blockchain technology and digital assets. Binance welcomes developments to our industry’s regulatory framework as they pose opportunities for the market players to have greater collaboration with the regulators. We are committed to working constructively in policy-making that seeks to benefit every user.”

This big Binance takedown has caused the exchange great loss. While the monetary loss is on one side, the exchange has been losing out on major partnerships and this could cost the platform in the long run.

Binance Preps To Latch The Doors Of Its Korean Branch

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2020 is probably the worst year in history. Yet, some crypto platforms like Binance managed to thrive despite the setbacks caused by the COVID-19 pandemic. The exchange was seen diving into several new markets this year while keeping up with the developments pertaining to the platform. Bitcoin’s price movement has got every crypto platform busy at the moment, however, some platforms seem to be going out of business despite the ongoing bull run. One of Binance’s branch was seen undergoing the same.

Binance Korea To Close Shop Following Low Trading Volume

Binance makes sure to maintain its name in the headlines. The exchange is touted as the world’s largest crypto platform and hasn’t slipped down from its post. However, this time the exchange has made the headlines announcing the closure of a branch. In a recent blog post, the exchange alerted its users that it was going to pull the plug on Binance Korea.

The blog post revealed that BKRW charge up as well new registrations at the Korean wing of the exchange was put on hold on 24 December 2020. The trading services is scheduled to stop on 10 January 2021 post 1:00 PM KST. On 29 January 2021, a hard shutdown along with the delisting of BKRW/BUSD Liquid Swap and BKRW trading pairs would take place. Following this, the accounts of Binance KR users would be inaccessible.

The blog post read,

“Binance KR will terminate the local exchange operations due to low usage and volume with limited trading pairs of BKRW, resulting in limited liquidity for its users. Following the closure of the exchange, the Binance KR team will reassess its market strategy based on the resources and experience gained from operating a local exchange.”

It seems like the interest of South Koreans in crypto isn’t very high. The crypto platform’s decision to pull the plug on its branches during the bull run due to low trading volume stands as substantial proof of the aforementioned statement. As the world was recovering from the pandemic, South Koreans seem to be highly affected by the virus right now.

Report: North Korea Hacking Group Targeting Government COVID-19 Stimulus Checks

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Popular North Korea hacking group, Lazarus Group, is preparing to launch a massive cyberattack this weekend. According to a report by the Internet security company Cyfirma, the infamous North Korean hacking group, the attack will take place after the government distributes the COVID-19 stimulus checks.

The notorious hacking syndicate may target Americans who are recipients of government stimulus checks, and all the recipients of stimulus checks worldwide. The group has planned a phishing strategy according to the report, targeting some specific 5 million individuals and companies, bridging across the United States, UK, Japan , India, Singapore and South Korea.

North Korea hacking group plans to impersonate government officials

The internet security firm anticipates the group to launch the attack this weekend for two days, impacting small, medium, and large businesses, on top of individual people. The plan is to lure these individuals by mimicking a government official, or the governing body in the victim’s country.

According to Cryfirma, if the individuals fall for the trap, they may then disclose information that the North Korea hacking group can use to access vital accounts. The report reads: 

“The hacking campaign involved using phishing emails under the guise of local authorities in charge of dispensing government-funded Covid-19 support initiatives. These phishing emails are designed to drive recipients to fake websites where they will be deceived into divulging personal and financial information.”

Massive phishing strategy

Every nation included in the report is undertaking some stimulus, either for businesses, its citizens, or even both of them. All the strategies outlined by Cryfirma in the report involve luring the victims by extra payouts, to squeeze out more private information, maybe to sell on the dark web.

Furthermore, the internet security firm has highlighted some emails that are likely to be used in the phishing plan. Cryfirma has identified the following emails as impersonator accounts:

covid19notice@usda.gov;

ccff-applications@bankofengland.co.uk;

covid-support@mom.gov.sg; 

covid-support@mof.go.jp; 

ncov2019@gov.in; 

fppr@korea.kr.

Korean Firm Believes Ripple is the Key to Unlocking a Whole New World for Migrants

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South Korea has emerged as one of the most exciting countries in the world of cryptocurrencies, with multiple updates and developments happening within its borders. Cryptocurrency organizations in the country have also taken on the responsibility of improving the social standards and financial structure of their citizens.

Sentbe was one such cryptocurrency company that planned to transform the financial landscape by partnering with SBI Ripple Asia. The project will work in tandem with Ripple and SBI Holdings to improve processes related to traditional banks and services.

The Brad Garlinghouse led Ripple has been a stalwart in the cross border transaction department with multiple partnerships across the board. The company has partnered with several startups across the world to provide a better infrastructure to payment corridors untapped by the financial market.

According to Sentbe, traditional financial methods have remained ineffective since its inception. J Young Lee, the co-founder and Chief Strategy Officer of Sentbe stated that there was a large group of people who were left in the lurch due to outdated banking methods. He said:

“Cross-border payments are typically expensive and time-consuming.but with RippleNet’s help we’ve made them faster, cheaper, more convenient. Now we want every hard-working migrant in Korea to know about and have the ability to access this better way of sending money home to their families.We are interested in expanding to any area where RippleNet can take us as the ease of integration makes any new corridor instantly valuable”

RippleNet has enabled organizations with their cross border transaction needs since 2018. Ripple‘s latest partnership with MoneyTap was another example of this growing demand for faster transfers in payment borders. For Sentbe, improving remittances meant overcoming four major challenges faced by migrant workers. These included factors like transparency, speed, convenience and cost of individual transactions.

Lee stated that many times, low-income workers did not know about hidden costs and transaction charges. On top of this, remittances were slow and usually took about 2-3 days to settle. Families of these workers usually find it very difficult to receive payments due to outages and a lack of transparency, stated Lee. The lower financial strata have usually flocked to digital assets in times of need, a test case being Venezuela.

Sentbe Archives has shown that they first planned to use Ripple’s XRP back in 2017, but that it was stopped because of Korea’s regulatory authority. The initial plan was to use XRP as a liquidity settlement solution. After that, the company turned to use Ripple‘s technology, such as the RippleNet, for its speed and convenience. This straightforward approach resulted in users saving more than $25 million in transaction fees.

With the RippleNet partnership, Sentbe becomes part of a wide network of banks and financial institutions. At the moment, Korean customers have the option of sending money to 25 payment corridors across the regions. Sources close to the company said that there were also plans to set up partnerships in the Latin American corridor. The need of the hour was financial inclusion and migrants also needed to be a part of this, remarked Lee.

 

Can Monero Save North Korea from Sanctions?

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According to a new report published by Recorded Future, North Korea is intensifying its efforts to mine Monero (XMR); a privacy-focused digital currency. Moreover, the report claims that the Asian country is expanding its Monero operations to help escape international sanctions.

The current North Korea regime has been making the headlines recently on cryptocurrency-related matters; ranging from scam and digital currency theft accusations. The country has been hit with several sanctions by the United States and other European nations for refusing to suspend the nuclear and missiles program. In particular, North Korea president Kim Jung Un has faced accusations of stealing and using cryptocurrencies illegally to fund the nuclear weapon program.

Moreover, the report by the cyber-security threat analysis company claims that internet usage in North Korea has risen significantly over the last three years. The report goes on to say that a significant part of this activity involves Monero mining. Monero is an open-source privacy-oriented digital coin that was launched back in 2014. The coin is unique due to its decentralized and anonymous nature.

However, in the current North Korea regime, the use of the internet is restricted to only the elite class and political officials. The reports of increased network usage and cryptocurrency mining are quite fascinating. The report only focuses on the global network accessible to such parties. The report highlights:

“For the North Korean political and military elite, the 2019 data show that the internet is not simply a fascination or leisure activity, but is a critical tool for revenue generation, gaining access to prohibited technologies and knowledge, and operational coordination.”

Why the Sudden Interest in Monero by North Korea?

Could the privacy features be the catalyst behind the increase in Monero interest in North Korea? Well, reports have been circulating that North Korea hacking groups have been targeting Western corporations and cryptocurrency investors. The malicious groups have especially targeted South Korean exchange firms.

Well, the country was initially involved in both Bitcoin and Monero mining. However, as of  May 2019, the Asian country forged a plan to rapidly intensify its Monero mining operations. Fair enough, this is linked to the anonymity of Monero as the currency has aided North Korea in evading financial scrutiny and control. Unlike Bitcoin, Monero transactions are well encrypted. The details of both the sender and receiver are well protected. As of Bitcoin, anyone can access transactions. The report reads:

“We have observed an at least tenfold increase in Monero mining activity from North Korean IP ranges since May 2019. We believe that Monero’s anonymity and lower processing power requirements likely make Monero more attractive than Bitcoin to North Korean users.’’

Is North Korea Investing in Monero to Avoid Sanctions?

Moving forward, the latest report published by Recorded Future, accuses the current regime of several engagements in cryptocurrency-related cyber crimes. As per the report, this has empowered North Korea to collect stolen digital assets; and be in a position to provide the necessary infrastructure for cryptocurrency mining.

According to reports, the focus on Monero by North Korea is all due to its privacy features. The country is investing hard to ensure transactions and other related information will stay anonymous; particularly to the United States and the United Nations Security Council that had imposed the sanctions.

In conclusion, North Korea even considered developing its own cryptocurrency to potentially evade U.S. sanctions. Former Ethereum developer, Virgil Griffith was indicted by the United States for conspiring with North Korea to avoid sanctions.