South Korean Lawmakers Put Cryptocurrency Regulations on the Fast Track
Lawmakers in South Korea are building on previous efforts to fast-track cryptocurrency regulations in one of the world’s largest blockchain markets, a move that could make the Asian country more desirable for proponents of the burgeoning sector. Notably, the proposed plan leaves the door wide open to regulating initial coin offerings (ICOs), a funding mechanism that was banned in 2017.
Fast-Tracking Crypto Regulations
According to the Korea Times, lawmakers from across the political spectrum have joined forces to draft new cryptocurrency bills that could be proposed to the National Assembly as early as this week. The National Assembly will convene for an extended session between July 13 and 26.
Although it is unclear if any of the bills will be signed into law during the session, the submissions will serve as a “catalyst” for further debate within the Assembly, the Korean Times reports.
Representative Park Yong-jin of the ruling Democratic Party of Korea is leading the push to regulate cryptocurrencies along with opposition members Chung Tae-ok (Liberty Party Korea) and Choung Byoung-gug (Bareun Mirae Party).
Park has been championing crypto regulations since at least July 2017 when he proposed three new bills to regulate the emerging market.
AML/KYC in Focus
Hacked reported last month that South Korea’s financial watchdog was looking to expedite new cryptocurrency regulations in the wake of multiple cyber attacks on domestic exchanges. To that effect, the Financial Services Commission (FSC) announced measures to beef up anti-money laundering (AML) and know-your-customer (KYC) guidelines for online exchanges. The new measures include guidelines for Customer Due Diligence (CDD) and enhanced background checks.
The guidelines set forth by the FSC mark a significant department from how crypto exchanges are presently regulated in South Korea. Previously, online exchanges were considered merely “communication vendors,” which significantly lowered the entry requirements for businesses seeking to establish an online exchange.
Financial regulators expedited their adoption of new guidelines in the wake of a $37 million theft of Coinrail and $30 million heist of Bithumb. Both attacks occurred within the span of a week.
South Korean exchanges are among the largest in the world when measured by average daily trade volumes. On Wednesday, Bithumb was ranked eighth in the world by volumes, according to CoinMarketCap.
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.
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