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South Korea Officially Bans Anonymous Cryptocurrency Accounts

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After much speculation, the government of South Korea has officially banned the use of anonymous bank accounts in cryptocurrency trades, Seoul’s financial regulator announced Tuesday.

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The End of Anonymous Trading

As of Jan. 30, the use of anonymous bank accounts to fund cryptocurrency trades will be outlawed in South Korea. Under the new law, residents will not be allowed to make deposits into their cryptocurrency accounts unless the name on their bank account matches the name in the digital exchange.

Practically speaking, this means traders must link their virtual currency wallets with their bank accounts using their real name. This is similar to the KYC standard used in the United States to verify clients and fight money laundering.

By banning anonymous trading, regulators hope to put a cap on speculation in a market that has ballooned significantly in just over a year. South Korea is considered to be the world’s third-largest cryptocurrency market, behind Japan and the United States.

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On Monday, local news agencies reported that the government has levied heavy taxes on domestic cryptocurrency exchanges, including a 24.2% tax on income generated on these platforms.

Bithumb, one of the nation’s largest exchanges, is expected to fork over 60 billion won in taxes.

Regulatory Clarity?

Earlier this month, South Korean Justice Minister Park San-ki sparked a global selloff in cryptocurrencies after he implied that a comprehensive ban on digital assets was imminent. However, the president’s office later clarified that a ban was just one measure being considered and that a decision had not yet been finalized. That didn’t stop the selloff from intensifying, culminating in a more than $300 billion drop between Jan. 13-17.

At its lowest this month, the global cryptocurrency market was valued at $417 billion, roughly half of the record high. Bitcoin and most major altcoins recovered over the weekend before facing renewed pressures on Monday.

The market was down again on Tuesday, although weakness was observed long before news broke of new regulations.

It remains to be seen whether South Korea will implement additional measures to limit the amount of speculation in the market. However, an all-out ban appears unlikely at this point. Even if it were implemented, there’s very little stopping local traders from shifting their accounts offshore to a more favorable jurisdiction.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 404 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Parity Wallet’s ICO Passport Services Are Shutting Down

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Parity Wallet has succumbed to EU regulatory pressure and is shutting down it’s PICOPS services on May 24th, 2018.

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EU Crackdown

PICOPS, a service which allowed customers to associated a single Ethereum address with their identity to simplify KYC requirements, allegedly due to the more stringent requirements of the EU’s new GDPR legal framework.

The Parity Wallet team itself posted a statement saying, “We are looking at ways of resolving the uncertainty and making PICOPS compliant with GDPR while keeping it useful. However, as things stand the solutions we have identified restrict the service to a very limited set of features.

Because of this, the significant resources required to make PICOPS GDPR-compliant, and the fact that PICOPS is not part of our core technology stack, we have decided to discontinue the service despite overwhelming market needs and demand.”

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The team remained open to restarting the service in the future however, stating, “These challenges make running a service like PICOPS more difficult. We are looking at ways of resolving the uncertainty and making PICOPS compliant with GDPR while keeping it useful. However, as things stand the solutions we have identified restrict the service to a very limited set of features.

Because of this, the significant resources required to make PICOPS GDPR-compliant, and the fact that PICOPS is not part of our core technology stack, we have decided to discontinue the service despite overwhelming market needs and demand. PICOPS’s deprecation does not mean that we are going to wait and see what happens to blockchains under regulation.”

Ethereum founder Vitalik Buterin tweeted his disappointment with decision on Friday, but didn’t go into specifics about the state of EU regulation.

Based on the company’s statements, it seems likely that Parity Wallet will continue to be an active voice in trying to steer more crypto-friendly regulations into law. But the shuttering of an incredibly useful tool could be interpreted as a byproduct of international government’s growing hostility to all things blockchain.

Governments around the world are still in the very early stages of understanding, defining and adequately regulating cryptocurrencies. The state of crypto regulation varies wildly across the board, with some nations recognizing cryptocurrency as money and others banning them outright.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Regulation

Asia Sees a Mass Exodus of Cryptocurrency Exchanges

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As Japan rolls out tougher cryptocurrency regulations, exchanges are thinking twice about expanding their services in the world’s third-largest economy. In fact, the Asian region as a whole is experiencing a mass exodus of exchanges. Their destination: Europe.

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Japan Introduces New Crypto Rules

Japan’s financial regulator has announced stricter guidelines for cryptocurrency exchanges in the wake of a large-scale cyber attack earlier this year, according to the Nikkei Asian Review. The new framework, which will be implemented this summer, will govern the operations of cryptocurrency exchanges currently registered with the Financial Services Agency (FSA) as well as any new service providers seeking to enter the market.

Exchanges that fail to meet the new guidelines set forth by the Financial Services Agency (FSA) will be advised to discontinue operations.

The FSA has been developing new regulatory guidelines in the wake of the Coincheck cyber attack, which resulted in the loss of $530 million worth of NEM tokens. It was the largest crypto heist of the year and second biggest of all time.

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Exchanges Step Away from Asia

Japan and the rest of Asia are becoming less attractive for cryptocurrency exchange operators. Last month, digital currency exchange Kraken announced it is stepping away from the Japanese market amid regulatory uncertainty.

Binance is also fleeing the region. The world’s largest crypto exchange has announced plans to relocate to blockchain friendly Malta from Hong Kong. The tiny Mediterranean country has positioned itself as a trailblazer for the blockchain industry, mirroring a highly successful shift in neighboring Cyprus, which has emerged as a global center for forex exchanges.

Meanwhile, Bitfinex announced in March that it was planning to relocate out of Hong Kong, which is one of China’s Special Administrative Regions. The exchange, already the fourth largest by trade volumes, is eyeing Switzerland as its next base.

Binance CEO Jean-Louis van der Velde told Handelszeitung, “We are looking for a new home for Bitfinex and the parent company iFinex, where we want to merge the operations previously spread over several locations.”

Though London was on Bitfinex’s short list, the company seems to favor Switzerland above all.

The country is the home to “Crypto Valley,” a mass effort to bring blockchain businesses to the picturesque European nation. Favorable regulations, a budding startup community and the recognition of blockchain as a future business driver have made Crypto Valley highly attractive.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 404 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Regulation

South Korean Lawmakers are Drafting a Bill to Legalize ICOs

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South Korea cryptocurrency

South Korean lawmakers are drafting new legislation to reverse the government’s ban on initial coin offerings (ICOs), a sign that one of the world’s hottest cryptocurrency markets would ease restrictions on the controversial crowdfunding model.

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Lawmakers Drafting Bill

According to The Korea Times, a group of lawmakers is planning to introduce new legislation that would permit citizens to participate in ICOs. The efforts are being led by Rep. Hong Eui-rak, who currently serves as a member of the ruling Democratic Party of Korea. Reports indicate that Hong is working with at least ten other representatives from the Korean government to draft a final bill before the end of 2018.

Though the details of the proposed legislation are not known, Hong said the bill is being developed in close collaboration with the Korea International Trade Association (KITA).

“The bill is aimed at legalizing ICOs under the government’s supervision,” Hong said at a blockchain forum at the National Assembly on Wednesday. “The primary goal (of the legislation) is helping remove uncertainties facing blockchain-related businesses.”

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National Assembly Speaker Chung Sye-kyun, who was present at the forum, reiterated the government’s role in removing political uncertainties standing in the way of cryptocurrency adoption.

“Blockchain and cryptos can be used in various public sectors for good causes,” Chung said. “Given their potential, we need to work to help reduce political uncertainties they face.”

Support for Cryptocurrency Grows

The South Korean government issued a blanket ban on ICOs last September and has since introduced new legislation to curb speculation in the cryptocurrency market. Policymakers have indicated they have no intent to ban domestic cryptocurrency exchanges but will instead work within existing frameworks to promote transparency and investor safety. The announcement, which came in late January, ended months of speculation and conflicting reports about South Korea’s intent to supress digital currency trading.

South Korea isn’t the only country adopting more favorable crypto regulations. A host of other nations led by Japan, Switzerland and Malta are positioning themselves as the future center for blockchain and cryptocurrency.

However, the future of international cryptocurrency regulation could depend on how U.S. agencies approach the subject. U.S. regulators have deemed all ICOs to be securities with the SEC broadening its investigation into the market. According to various reports, the SEC is quietly investigating whether cryptocurrencies like Ethereum and Ripple should be classified as securities. In the eyes of former CFTC chairman Gary Gensler, one or both of XRP and ether are “non-compliant securities.”

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 404 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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