Korean IT news website Digital Daily reported Friday that confusion is expected regarding the Korean Federation of Banks (KFB)’s recently released “VASP Money Laundering Risk Evaluation Plan,” a set of non-binding guidelines sent to commercial banks for issuing real name accounts to cryptocurrency exchanges.
In particular, the system for assigning credit ratings for listed cryptocurrencies may prove something of a mess.
Initially, the KFB initially advised banks to reference Korean crypto disclosure platform Xangle’s credibility ratings.
According to Digital Daily, however, banks have no plan to evaluate coins based on Xangle’s ratings due to recent controversy surrounding the platform’s consulting services for projects hoping to list their coins on exchanges. Even the KFB has told banks to be aware of the controversy, though it appears the organization will not amend its guidelines as they are only that — guidelines.
However, no real alternatives to Xangle’s ratings exist, which means exchanges and banks will have to use them or scramble to create an alternate set of rankings.
(For what it’s worth, among Korean exchanges, the controversy has reportedly met with split opinion, and most exchanges continue to use Xangle’s rankings)
Risky ICX? Not exactly.
Anyway, using Xangle’s ratings, the KFB has essentially created a “coin whitelist,” wrote Digital Daily.
BTC topped the list with Xangle’s highest “AA++” rating and a score of 0.8, followed by ETH with a “AA” and 1.5.
On the other hand, ICX received a “BBB” ranking and a score of 3.9. According to Digital Daily, this indicates a relatively high degree of risk, though Xangle also calls ICON “a good blockchain project with above-average reliability and capability to accomplish its goals.”
You can read the details of the ICX ranking here. ICON received very high marks for its company and team and high marks for its IR and disclosure practices as well as for its business performance.
However it received low marks for financial sustainability, token governance and “technical audit and legal memo.”
It should be noted that the report dates from Sept. 29, 2020, which is almost an eternity in crypto-time.
Anyway, while the headline of the Digital Daily story — “Bitcoin Safe, ICON Risky? Banks Likely to Amend Their ‘Coin Whitelist, Too” — probably did ICON no favors, and the piece describes ICX’s BBB rating as indicating “fairly high risk,” Xangle actually calls its BBB ranking “Solid.”
And both its English and Korean rating overviews of ICON are quite positive — we reiterate, Xangle called ICON a “good blockchain project.”
Frankly, we here at The Iconist are not quite sure that Digital Daily gave Xangle’s ratings an accurate spin, and even then, the article predicts changes in the cryptocurrency ratings when banks create their own alternative rankings. Which means ICON — which the article calls a “well-known coin in Korea” — could eventually receive an even higher rating from the banks.