South Korean Financial Regulator and the Government Pledge to Support Cryptocurrency Transactions
The period of uncertainty in the South Korean cryptocurrency ecosystem has become much more clear, as authorities have pledged they will henceforth support the growth of the sector.
Victory for Crypto Investors
Cryptocurrency investors now have peace of mind as the head of South Korea’s financial regulator, and watchdog has said that authorities will support cryptocurrency trading. On top of the trading clause, the government will encourage banks to carry out virtual currency-related transactions.
On February 20, 2018, the chief of South Korea’s Financial Supervisory Services (FSS), Choe Heung-sik, noted that Korea’s cryptocurrency space now has the support of the government. Heung went on to say that authorities will have no issues with virtual currencies transactions that follow the latest guidelines created by the government and regulatory authorities.
In a meeting with major Korean cryptocurrency exchanges, Choe reiterated that the government “will support [cryptocurrency trading] if normal transactions are made.”
“Normal transactions” are those that meet the Know Your Customer (KYC) and Anti-Money Laundering (AML) standards. The official also hinted that the government would only continue to uplift the growth of the industry provided that it keeps within the boundaries laid out by regulators.
Since the preceding laws took effect, anonymous trading by cryptocurrency traders has been halted, and traders are required to use their real names associated with their digital currency exchange accounts, cryptocurrency wallets, and bank accounts.
For now, anonymous traders can continue trading virtual currency using their cryptocurrency holdings on virtual accounts. However, all cryptocurrency-to-fiat transactions (buying, selling, and withdrawals) must meet the new KYC standards.
Some Banks are still Reluctant
In line with the latest development, quite a number of prominent banks have started facilitating cryptocurrency transactions and issuing new bank accounts that conform with the KYC rules to traders.
However, several other banks have yet to resume offering crypto-related services. To mitigate this challenge, Choe stated that the government will soon step into the matter and “encourage” such banks to renew transactions with cryptocurrency exchanges and traders.
Despite this positive news, the death of Jung Ki-Joon, a notable cryptocurrency regulator in the country, on February 18, 2018, has cast a suspicious light on South Korea’s more cooperative stance. While no connection has been firmly established, speculation has already begun as to any possible correlation.