Hyundai BS&C eyes cryptocurrency

By Kim Yoo-chul

Hyundai BS&C is eyeing the cryptocurrency business as its IT solutions division plans to sell its own digital tokens next year, sources familiar with the issue said, Monday.

Hyundai Pay, the internet of things (IoT) business set up by Hyundai BS&C CEO Chung Dae-sun, plans to establish a joint initial coin offering (ICO) with its in-house HDAC cryptocurrency technology to issue HDAC digital tokens, according to the sources.

“An open beta service, trial test of the HDAC trading is set to begin Jan. 15 next year at the earliest,” said a source from the local financial industry, adding Hyundai BS&C, creator of the HDAC tokens, is aiming to involve up to 3,000 participants in the preliminary test. Korea Digital Exchange will conduct the trial test.

Hyundai Group, its parent company, has become the second Korean conglomerate to confirm its plans to jump into the booming cryptocurrency business after Samsung SDS, an IT solutions unit of Samsung Group, began developing its pilot project that will run within the blockchain frame for non-commercial sectors.

HDAC technology was founded by Chung Dae-sun, the grandson of Hyundai Founder Chung Ju-yung. The plan is to raise as many as 6,000 bitcoins, which is equivalent to 100.8 billion won, if the campaign is successful. One bitcoin was valued at 18 million won as of last week, according to coinhill, a bitcoin price tracker.

An official at the exchange said HDAC tokens would be exchangeable with other types of digital tokens such as bitcoin. “What’s interesting is that HDAC tokens are cryptocurrencies under the brand of the Korean company,” the official said.

Hyundai’s move comes a few months after the country’s financial regulator prohibited local companies and startups from raising funds through ICOs, as token offerings, which is considered one of the ideal fundraising methods for startups due to the small amount of paperwork, are overly speculative and constitute a “violation of the capital market law,” according to the Financial Services Commission.

While Korea is the world’s third-biggest market behind Japan and the United States for purchasing and selling bitcoin, the most popular type of cryptocurrency, the number of Korea-developed cryptocurrencies is known to be five, according to data from cryptocurrency operators.

But it is uncertain whether the HDAC tokens will be included in the listings of cryptocurrency exchanges. No further details are available regarding when the HDAC tokens will be sold for public trading.

Hyundai plans to use the funds raised from the campaign to address major security issues associated with IoT devices, and apply the technology to hardware payment applications amid the world of connectivity.

It said its digital tokens are more about its own blockchain which is more IoT-friendly, adding such a feature separates it from Ethereum and bitcoin protocols.

“The Korean government is in the process of understanding the complex nature of the cryptocurrency market. The market will have high volatility in its early stages with steep ups and downs but it will go in the right direction after experiencing a trial period,” said Kim Yong-ho, head of the digital exchange.