Korea’s top financial watchdog, the FSC (Financial Services Commission) Chairman Choi Jong-ku noted that the ministries are in discussion over the extent of trade regulation. the South Korean government is intensifying its moves against the country’s bitcoin exchanges.
As of now, several government groups involved in the virtual currency task force are of divided opinion on the matter and some in fear of stifling crypto and fintech innovation. But Choi confirmed that any decision to prohibit transactions must have legal basis. That news is a major development for the cryptocurrency space, as South Korea is one of the biggest markets for major coins like bitcoin and ethereum.
South Korea currently bans financial institutions from dealing with virtual currencies and the news is South Korean news service SBS has reported that the South Korean Justice Department is moving to prepare legislation that would pave the way for exchanges in the country to be shut down entirely.A seed investor in blockchain project ALIS social media, Douglas Crets believes regulation is good,
“In the long term chess game of bitcoinization, regulation helps the government ‘process’ what’s happening and it makes it more legitimate for bigger institutional players to put funds into crypto currencies.”
According to industry website CryptoCompare, more than 10 percent of ethereum is traded against the South Korean won and for which the second largest concentration in terms of fiat currencies behind the dollar.
While, 5 percent of all bitcoin are traded against the won.Bitcoin tumbled more than 12 percent following Park’s remarks, according to CoinDesk’s bitcoin price index that tracks prices from four exchanges. At 1:26 p.m. HK/SIN, the cryptocurrency price retraced some of its losses to trade at $13,547.7.
the ban on initial coin offering (ICO) remains. And six safeguards are being pushed forth for operating exchanges.
Those conditions include confirming the user’s real name, and must submitting proof of income, face-to-face interviews to meet strict Know Your Customer (KYC) policies, and providing cryptographic keys to establish anti-money laundering systems, as well as separating fiat accounts, supply sufficient investment warnings, etc.