S.Korea to Recognize Crypto as Digital Assets

Law will enter into force in a year after approval; crypto companies will required to comply with the FATF's AML requirements and register with FSC
27 November 2019   410

The National Policy Committee of the National Assembly of the Republic of Korea passed a bill on the regulation of virtual currencies. This is reported by local media.

According to the document, virtual assets are classified as digital assets.

Cryptocurrency companies will be required to comply with the FATF's requirements for preventing money laundering, as well as register with the financial intelligence unit of the Financial Services Commission (FSC).

Certification will not pass those who refuse to notify authorities of suspicious activity, do not receive a certificate of the Information Security Management System, and will also manage bank accounts that have not been identified.

For such companies, a fine of up to 50 million won (about $ 42,500), or imprisonment for up to five years is provided.

According to representatives of the FSC, the bill will contribute to the transparency of the cryptocurrency market, as well as legitimize investment in this type of asset.

It is expected that one year after approval, the bill will enter into force.

Potentional Vulnerabilities Found in ETH 2.0

Least Authority have found potentional security issues in the network P2P interaction and block proposal system
26 March 2020   974

Technology security firm Least Authority, at the request of the Ethereum Foundation, conducted an audit of the Ethereum 2.0 specifications and identified several potential vulnerabilities at once.

Least Authority said that developers need to solve problems with vulnerabilities in the network layer of peer-to-peer (P2P) interaction, as well as in the block proposal system. At the same time, the auditor noted that the specifications are "very well thought out and competent."

However, at the moment there is no large ecosystem based on PoS and using sharding in the world, so it is impossible to accurately assess the prospects for system stability.
Also, information security experts emphasized that the specifications did not pay enough attention to the description of the P2P network level and the system of records about Ethereum nodes. Vulnerability risks are also observed in the block proposal system and the messaging system between nodes.

Experts said that in the blockchains running on PoS, the choice of a new block is simple and no one can predict who will get the new block. In PoS systems, it is the block proposal system that decides whose block will fall into the blockchain, and this leads to the risk of data leakage. To solve the problem, auditors suggested using the mechanism of "Single Secret Leader Election" (SSLE).

As for the peer-to-peer exchange system, there is a danger of spam. There is no centralized node in the system that would evaluate the actions of other nodes, so a “malicious" node can spam the entire network with various messages without any special punishment. The solution to this problem may be to use special protocols for exchanging messages between nodes.