South Korea To Make More Lenient Crypto Rules to Cooperate With G20 Directives
Just a few days, we reported on the South Korean government to be likely working on positive cryptocurrency regulations which has now turned true! Regulatory authorities in South Korea are now working towards relaxing the cryptocurrency laws in the country. This move is in accordance to introduce “unified regulations” as agreed by the member countries during the G20 summit earlier this year in March 2018. At that time, the G20 members agreed to bring these regulations with a deadline of July 2018.
As reported by the Korea Times, the country’s regulatory body Financial Services Commission (FSC), which oversees policies and directs the Financial Supervisory Service (FSS), has now revised the guidelines for local crypto exchange operators.
An official familiar with this matter said: "The FSC made revisions to its rules to apply strengthened policies in order to prevent or detect money laundering and illegal activities because the regulator isn't opposed to cryptocurrencies.”
Another official said: "Establishing unified rules is a complicated issue given the broader range of assessments between government agencies. This is why the country needs close international cooperation as it is still in the early stages of fine tuning guidelines.”
The South Korean government had earlier classified digital currencies as "non-financial products” owing to their speculative nature. The two agencies - FSC and FSS said that they will continue with the governments of still not recognizing digital currencies as “financial assets”.
The “limited regulation” in the cryptocurrency market gives it a huge exposure to market manipulation and extreme volatility. This has kept the institutional players away from participating in the cryptocurrency space.
One of the officials from the Korea’s trade ministry said: "Any major reversal in policies is unlikely, but the government seems to believe a gradual shift in attitude toward crypto-based assets is needed. What regulators should do is figure out how to regulate them properly and prudently as Korea needs to put more emphasis on blockchain technology after obtaining knowhow and understanding of the possible flipside of cryptocurrency trading.”
In addition to relaxing the crypto rules, the National Assembly of South Korea proposed a plan in May 2018 to lift the ban on ICOs taking place in the country. Last year in September 2017, the South Korean government had introduced a blanket ban on ICO operations, which still continues due to several scams taking place in the ICO market.
Now efforts are being made in the direction in order to legalize the functioning of ICOs in the country under the regulatory observation. In addition, the Ministry of Strategy and Finance is in talks with the National Tax Agency to bring a proper taxation framework for the trading of digital currencies.