Bithumb Pledges $8M to South Korea’s ‘Regulation-Free’ Blockchain Zone

South Korean cryptocurrency exchange Bithumb has pledged to invest roughly $8 million into the Busan blockchain zone. The region was recently declared “regulation-free” by the national government and modeled after the Switzerland town of Zug. Bithumb’s subsidiary GCX Alliance will discuss the preliminary plans with the Financial Services Commission (FSC) this month.

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Bithumb Joins South Korea’s Blockchain Coalition in the ‘Regulatory-Free’ Zone in Busan

On December 30, 2019, news.Bitcoin.com reported on the South Korean exchange Bithumb when the National Tax Service of South Korea (NTS) withheld more than 80 billion won ($69 million) from the company’s international clients. Bithumb is one of South Korea’s most profitable exchanges and the Korean won is often a top five trading pair with the most popular digital currencies. The recent tax levy was considered South Korea’s first attempt to have the NTS enforce tax commitments tied to cryptocurrencies. Following the NTS crackdown, Bithumb has reportedly partnered with the nation’s Ministry of SMEs and Startups. The high volume South Korean exchange plans to inject $8 million into South Korea’s “regulation-free” zone for blockchain development in Busan.

Bithumb is one of South Korea’s (SK) top digital currency exchanges among other competing SK-based trading platforms like Upbit, and Korbit. Bithumb’s exchange hacks in 2018 forced the company to work with KISA (Korean Internet & Security Agency) to help recover their losses.

Busan is allegedly one of seven regions that the Korean government has chosen to pilot distributed ledger tech and crypto solutions. Bithumb is also no stranger to Busan, as the exchange operates a walk-in customer service center in the zone, alongside its other branches in Busan Daejeon, Gangnam, and Gwanghwumun. Local reports highlight the Busan investment plan will be hashed out with the FSC during the latter half of January 2020 and purportedly Bithumb’s GCX Alliance will carry out the objectives. “Bithumb and the Financial Services Commission will discuss the investment in Busan blockchain special zone at the end of January,” a senior official from the Ministry SMEs and Startups detailed.

A Bithumb customer service center. Bithumb already has a branch located in the blockchain zone of Busan.

Busan’s So-Called ‘Regulation-Free Zone’ Isn’t Exactly a Place Where You Can Develop Any Kind of Cryptocurrency Project

Busan isn’t exactly an area where blockchain developers and companies can create whatever they want. Initial coin offerings (ICO) are not acceptable within the Busan special region. The area in Busan is meant to be similar to Zug’s famous crypto hub in Switzerland, but there are still restrictions. The public caught wind of the special blockchain zone when the Ministry of SMEs and Startups revealed the idea in July. One of the biggest reasons for leveraging Busan is because it’s the second most populated city with lots of tourism.

Reports say that Hyundai Pay and BNK Financial Group’s stablecoin has currently set up shop in Busan’s blockchain zone.

The government entity wants blockchain and crypto projects to focus on the public sector with ideas that bolster tourism, consumerism, and public safety. In order to call Busan a “regulation-free zone,” South Korean officials lifted 11 regulations for businesses and startups leveraging blockchain. Bithumb’s GCX Alliance contribution will add to the expected 29.9 billion won ($25 million) by the year’s end.

South Korea’s Ministry of SMEs and Startups hopes to see the Busan blockchain zone get roughly $25 million in funding by the year’s end. Bithumb’s $8 million dollar contribution will help toward the 2021 goal.

The push to galvanize Busan was started by South Korean President Moon Jae-In, who recently told the press adapting to blockchain technology was “a matter of survival.” Researchers from Amcgroup have highlighted the fact that only the local BNK Financial Group’s stablecoin is being used within Busan’s borders. No other cryptocurrencies are being worked on at the moment, the report discloses. Further, Amcgroup stressed that “lack of exceptions for cryptocurrencies has limited the appeal to blockchain startups.” Bithumb donating funds to Busan may be good for the region, but if blockchain startups won’t want to work there because public cryptos are restricted, the so-called “regulation-free blockchain zone” might be a worthless attempt.

What do you think about Bithumb planning to donate $8 million to the Busan blockchain zone? Do you think the “regulation-free” zone is truly regulation-free or do you think the government conceived concept is hogwash? Let us know what you think about this subject in the comments section below.

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Image credits: Shutterstock, Busan, Bithumb customer service centers and logos, Cruisemapper, Wiki Commons, Fair Use, and Pixabay.

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