1 Introduction 3. Main Service and Technology 3.1 Crypto Bank 1. Introduction 1.1 Cryptocurrency transaction system and current state of cryptocurrency exchanges 3.2 Index QR system 4. Rhea Token 1.2 Upcoming issues of cryptocurrency industry 4.1 Token Economy 1.3 Current state of Simple Payment market 4.2 Benefits for the stores 1.4 Problems of the simple payment market 4.3 Cryptocurrency Exchange 1.5 Structural limitations of cryptocurrency 4.4 Token Distribution 1.6 Lack of user convenience in cryptocurrency payment 5. Business Schedule of Rhea Protocol 2. Rhea Protocol 5.1 Roadmap of Rhea Protocol (SWEPT Network System) 2.1 Service of Rhea Protocol 6. Partners 2.2 System concept of SWEPT Network 6.1 Partners of Rhea Protocol 2.3 Rhea Protocol’s Expanded Service 7. Disclaimer 2 Introduction The popularization of credit cards and the growth of the FinTech market and the mobile device market have created a new payment process called mobile simple payment. The mobile simple payment has reduced the need for wallets offline. And as technology develops, its convenience and speed improved. Virtual asset, which was created at the point when people are getting more used to digital transactions, became the key to easily expand the payment market from the limited domestic market to the global market. Many companies that have identified these opportunities in advance have continued striving to connect the virtual asset with the real economy. However, there are some limitations to apply virtual asset to the payment and settlement system due to the delay in the transaction processing of the Blockchain network, price volatility of virtual assets, and absence of an actual cryptocurrency payment platform. Even if these limitations are resolved, the lack of user experience for cryptocurrency payment and complicated exchange process does not correspond to the users who are already getting used to the simple payment system. In order to apply cryptocurrency to the existing payment platform, the new process should be developed without changing too much from the current simple payment process. In this state, the online payment market will grow more than any other payment market when it is connected with the cryptocurrency payment market. Thus, Rhea Protocol is the cryptocurrency payment protocol created to accentuate the expected effect that could occur when cryptocurrency is applied in the on/offline payment market. Rhea Protocol supports immediate cryptocurrency payment based on the SWEPT network of the cryptocurrency exchange. And it provides convenience, versatility, and security to customers using the QR code payment technology, which is familiar to everyone. The QR code payment technology has obtained a patent from the Korean Intellectual Property Office (KIPO). The technology supports Index QR payment by applying the cryptocurrency payment to the POS system faster than any other technologies through the cooperation with Doobitnaraesoft, Daewon POS, and ChanYul. The issued Rhea token can be used to pay fees and prepaid tickets that use the Index QR payment system. As the demands of the QR payment system increases, the demands of the token increase as well. This has led to an increase in the Rhea token value and designed the token economy. 3 1. Introduction For the past decade, the virtual asset market has shown remarkable growth. There some voices concerning this could be just a ‘Bubble.’ But, virtual asset, which is safe, transparent, and globally available in terms of Cryptology, is ready to change every industry’s foundation. The Korean government is also preparing legal and regulatory measures to keep pace with the trend of virtual asset. Starting from this or the next year, the government is planning to introduce practical measures, such as the Act on Specified Financial Transaction and Support (hereunder SFTS Act). Some countries, like Japan, and some large corporations, like Starbucks, are already providing payment services using cryptocurrency. For example, Facebook has launched Libra, their own cryptocurrency token. <Korean Cryptocurrency-related Policy and Response> Date Key content 2017. 9. ㆍ Government has announced cryptocurrency is not a legal tender nor a currency ㆍ Banned all forms of ICO including issuance of securities ㆍ Banned credit exposures, such as lending money or trading coin margin and blocked related financial company business and business cooperation 2017. 12. ㆍ Korea Blockchain Association announced ‘Self-regulation’ (Regulation on protecting virtual asset users, etc.) ㆍ Announced ‘Special measures to eradicate cyrptocurrency speculation’ (Real-name cryptocurrency transaction system, joint investigation on illegal acts, etc.) 2018. 1. ㆍ Enacted and launched ‘Cryptocurrency-related money laundering prevention guidelines’ 2018. 4. ㆍ Recommended correction of unfair terms and conditions of Fair Trade Commission’s cryptocurrency service providers (12 service providers) 2018. 6. ㆍ Announced the revised version (1st) of ‘Cryptocurrency-related money laundering prevention guidelines’ 2018. 8. ㆍ Launched the ‘New Cyber Package Insurance’ (including cryptocurrency theft cover, etc.), developed by Korea Blockchain Association ㆍ Hanwha General Insurance 2019. 1. ㆍ Financial Supervisory Service announced the result of the Korean ICO research (September ~ November, 2018) 2019. 3. ㆍ Supreme Prosecutors' Office founded the ‘People’s Multiple Damage Crime Response Task Force’ (to investigate cryptocurrency fraud, etc.) 2019. 6. ㆍ Announced to extend the enforcement of the revised ‘Cryptocurrency-related money laundering prevention guidelines’ 2019. 10. ㆍ The Presidential Committee on the 4th industrial revolution announced the ‘Governmental recommendation on the 4th industrial revolution’ (mentioned the necessity of institutionalizing cyrptoasset) 2019. 11. ㆍ The National Policy Committee of the National Assembly passed the revised version of the ‘Act on Reporting and Using Specified Financial Transaction Information’, related to virtual assets 2019. 12. ㆍ The Ministry of Economy and Finance stated the plan about the revised tax law related to the taxation of domestic residents and nonresidents’ cryptocurrency transaction profit Reference: March 2020 issue of KCMI Capital Market Focus 4 All these data show us that it won’t be long before we witness the advent of virtual asset, which can be seen as a new tool or a game-changer. It will become the core of the next industrial revolution and an irreversible trend. In that respect, it is possible to say that virtual assets have limitless potential. But, are we ready to join that trend? Do we know the detailed structure of the trend? Or do we understand what we should prepare? This Whitepaper not only is the overview of our project but also one of the proposals about every company in this era that handles virtual assets. It is becoming clearer by the day that you cannot survive in the market if you don’t realize the changes in the emerging virtual banking market. <Key Details of the revised SFTS Act> Definition & Range Obligation to Report Electronic token with values that can be electronically traded or transferred (includes all related rights) Virtual Asset Exceptions: Non-convertible electronic token, game items, prepaid electronic payment methods, or electronic money, etc. Enhanced Due Diligence of VASP (CDD, EDD): Service provider performs the obligation to report - Separately deposits assets of VASPs and their customers - Certification of Information Security Management System (ISMS) Virtual Asset Service Included in financial companies - Open a real name-verified checking account Providers (VASP) If unable to check customers’ identification due to their refusal of providing information, decline/end transaction EDD: Obligation to directly report currency transaction (more than 10 million won) and suspicious transaction (with reasonable evidence) 5 Include cryptocurrency transaction to ‘financial Required information when arranging a wire transfer of trade’ cryptocurrency: When a financial company or remitter remits more than a million won domestically / more - Trade virtual assets than USD1,000 overseas through wire transfer - Exchange with virtual assets (transferring money or virtual currency to other - Transfer of virtual assets domestic/overseas financial companies), the information Cryptocurrency - Storage/Management of virtual assets about the remitter and the recipient should be provided transaction - Mediate, recommend, substitute trade and to the receiving financial company exchange - Any other actions that have a high probability of being used as money laundering or terrorist financing, or actions that are designated in the presidential decree concerning virtual assets Reference: February 2020 issue of Hexlant ISSUE REPORT 1.1 Cryptocurrency transaction system and current state of cryptocurrency exchanges In order to use the cryptocurrency transaction, one should follow the cumbersome system that each cryptocurrency exchange requires to purchase and remit virtual assets. Although exchange platforms have changed to a more user-friendly format compared to the past, there are still huge hurdles for the users who are newly introduced to the exchange. Putting aside those facts, the current remittance system between exchanges shows a very insufficient level compared to the existing system of the conventional financial market. This is not just because it is inconvenient. If we look at it on a deeper level, we could see that a precarious situation continues. However,