Crypto regulations in South Korea tying the noose on decentralization
Investors fear that upcoming regulations might be an unprecedented blow to blockchain projects in South Korea
The South Korean Parliamentary Advisory Body has uttered interests in creating a department to regulate the crypto industry. Plans to establish the institution came after the conclusion of the Financial Services Commission, that cryptocurrencies shall not be treated as currencies. Since April, virtual asset service providers have been obliged to register with financial authorities and comply with anti-money laundering laws.
These regulations have already caused great concerns among South Korean crypto investors, since the strict regulations collide with the interests of providers to be entirely decentralised. Additionally, real name registration is discouraging users from further transactions, while providers are suffering from time consuming and expensive information security system management certification. Especially start-up providers will face immense difficulties in the peninsular democracy from now on. Already established players are favoured by the government’s plans in that sense.
In the process, conflicting statements of the Korean authorities have caused confusion. The central Bank of Korea classifies crypto as form of commodity, while judges of the Supreme Court have declared in some cases that cryptos have properties of currencies after all, cryptonews.com reported.
Ultimately, steps to stricter crypto regulation in South Korea seem well on their way, continuing a trend in Asia. Fraudulent use of coins will possibly be diminished, however the speculative nature of major players like Bithumb will also suffer. With regulations in place in Singapore and India as well as Hong Kong taking steps as well, the crypto world is progressing towards a new era.
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