South Korean Government Will Regulate Bitcoin Exchanges, Refutes Ban Rumors
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The South Korean government has officially refuted various reports on the possibility of a cryptocurrency trading ban within the country.
On Wednesday, December 13th, the South Korean government, central bank, and financial authorities had held an emergency meeting to discuss the legality of cryptocurrencies and the current state of the bitcoin and cryptocurrency exchange markets.
The meeting was held after South Korean prime minister Lee Nak-Yeon publicly expressed his concerns over the rapid growth of the local cryptocurrency market and the involvement of younger investors. He stated that students have started to trade cryptocurrency full time and the entrance of unaccredited traders into the market has become an issue for the government.
On December 14th, the South Korean government released four main policies and regulatory frameworks it intends to introduce by the end of this year. The new rules aim to disallow underaged investors and foreigners from investing in cryptocurrencies, temporarily suspend institutional investors from investing in cryptocurrencies, ensuring that trading platforms conform with (KYC) and Anti-Money Laundering (AML) rules, and limiting one cryptocurrency exchange account per individual.
The South Korean local cryptocurrency market’s three leading exchanges Bithumb, Korbit, and Coinone, which are all backed by multi-billion dollar conglomerates and investment firms in the country, stated that they welcome strict regulations from the South Korean government because it would further validate and legitimize the local market.
Bithumb, the country’s largest cryptocurrency exchange which has a daily trading volume larger than that of South Korea’s main stock exchange KOSDAQ, noted that the regulation of the cryptocurrency sector will boost the market.
”A right set of regulations will rather nurture the (virtual currency) market, and we would welcome that,” Bithumb told Reuters.
In the short-term, the South Korean government is planning to implement strict regulations to ensure that the market conforms with existing regulatory frameworks. Over time, the South Korean government intends to follow the regulatory roadmap of other leading bitcoin markets such as Japan.
In the coming months, a cryptocurrency-related task force formed by the South Korean Ministry of Strategy and Finance, Financial Services Commission, Ministry of Justice, Fair Trade Commission, and Financial Supervisory Commission will continue to draft new regulations to protect investors and better facilitate the growth of the local cryptocurrency industry.
As a spokesperson for the task force told Chosun, the country’s leading finance-focused mainstream media outlet:
“The South Korean government has no other choice but to follow the regulatory frameworks and trends established by other leading governments. While there certainly exists a negative reputation attached to the cryptocurrencies, the government’s stance is to allow what has to be allowed, for the benefit of the South Korean market.