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South Korea: “FSC is just maintaining its very negative stance on cryptocurrency”

27 July 2018 14:58, UTC
South Korea: “FSC is just maintaining its very negative stance on cryptocurrency”
By Ann Sotnikova

South Korea’s cryptocurrency exchanges are among the biggest in the world. They drew higher attention after two of them had been hacked last month. FSC urged the lawmakers to pass the country’s first cryptocurrency bill as soon as possible. South Korea’s Financial Services Commission also added that local cryptocurrency exchanges suffer from money-laundering risks.

“While crypto markets have shown rapid growth, such trading platforms don’t seem to be well-enough prepared in terms of security,” Hong Seong-ki, head of the virtual currency response team at South Korea’s Financial Services Commission, said. “We’re trying to legislate the most urgent and important things first, aiming for money-laundering prevention and investor protection. The bill should be passed as soon as possible.”

According to Vice Chairman at Korea Blockchain Association & Head of Crypto Exchange Committee Jay Jeehan Kim, “there has been a couple of hacking incidents. But FSC is just maintaining its very negative stance on cryptocurrency”.

“I want to know the reason of why FSC has a negative attitude to the crypto industry as well. Maybe too much volatility. Or because of losing control of foreign exchange. Among probable reasons there are also a tax issue, investor’s protection and lack of understanding on blockchain industry”, Jay Jeehan Kim assumes.

In MarchSouth Korea’s ruling party proposed a bill to control digital money turnover but it hasn’t yet been approved by the National Assembly. In case of the document adoption, crypto exchanges will be regulated by the South Korea’s Financial Services Commission. Hong Seong-ki said he hopes the National Assembly will act by the end of the year but added that the timing is hard to predict. He stressed that the control by the FSC will not mean the official approval of the crypto trade. And if the laws are adopted, the government will focus on controlling exchanges, not increasing the value of crypto money. In addition, Gong Songki personally recommended not to invest in cryptocurrencies.

Speaking about the legislative control of cryptocurrency in the country, Jay Jihan Kim says: “I personally welcome any kind of law on crypto space. Since it might cause the start of communication between industry and regulators. And in some sense, it means at least that government recognizes cryptocurrency as an industry.”

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