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.
Whereas some industry experts are concerned that some of the crypto exchanges might move out of the country owing to strict regulations and some exchanges might charge higher trading fees.