South Korea Passes Law to legitimize Crypto trading


The Assembly of South Korea has unanimously
passed an amended bill that will legalize the crypto operations in the country.
The bill was presented on March 5 that has devised the regulatory framework for
the crypto industry and will be enacted within a year.
The Bill has introduced the permit system
for crypto exchanges. It also mentions reporting and the use of special
financial transaction information of the crypto assets.
During the special session in the
legislature, the proposed bill had been approved and passed with the support of
the majority votes. The Bill is an amendment to the country’s financial
services laws that would authorize Korea’s financial regulators to keep
surveillance over the newly flourishing industry and will help to thwart
anti-money laundering and other notorious activities.
Amendments in the bill
The amended bill will be implemented till
March, next year, which instructs the cryptocurrency exchanges to register
themselves with the Financial Intelligence Unit (FIU) under Financial Services
Commission (FSC), with authentic accounts and ISMS authentication verified by
the banks.
After the implementation of the bill, the
exchanges will have to furnish detailed information about their operations
within 6 months.Delay or failure to the enactment may lead to prison for 5
years or a fine of 50 million Won (Approx. $42,000).
How the Bill will regulate the Crypto
industry?
The Financial Supervisory Service and the
FIU will follow the Global Financial regulator- Financial Action Task Force
(FATF’s) directives to strengthen the Anti-money laundering rules for the
crypto assets. The bill will accelerate the process of registration of the
firms with the FIU and will speed up the sub-law regulations.
The crypto-related businesses including the
crypto exchanges, wallets, custodial companies, tokenization platforms, etc.
will have to comply under the regulations.
Why the Bill is significant for South
Korea?
South Korea has been a front runner in terms
of adoption of cryptocurrencies and the blockchain technology. A survey in 2017
revealed the inclusion of one-third of the country’s population in the
investment of crypto assets and crypto products.
Country capital Seoul has even
launched its cryptocurrency S-coin in August 2019, to encourage citizens to
participate in ‘governance and get rewarded for using public services and
citizenship obligations and duties.
The Bill will be helpful to fetch more
investments from the institutions as well as from the individuals in the
industry and will ultimately boost the South Korean economy. Under the
regulatory surveillance, more mass adoption will take place, owing to lesser
risks.
Mixed Sentiments among the industry on
the Bill
The crypto community has expressed a
mixed reaction over the passing of the bill. Some have called it the beginning
of the New Coin age. Some have expressed that it will wash out the dubious
image of the industry and will help it to grow more healthily and
transparently.

Jayashree Ingle
CBW - External Analyst
INDIA