South Korea’s government released emergency measures for cryptocurrency regulation on Thursday. Bitcoinexchanges will now be regulated. Among other measures, there will be a ban on banks, minors, and foreigners tradingcryptocurrency as well as a clampdown on virtualbankaccounts needed to tradecryptocurrencies in Korea.
Regulating Crypto Exchanges
South Korea’s government held an emergency meeting to discuss cryptocurrency regulation on Thursday. Following the meeting, the regulators released “virtual currency emergency measures,” Hankyungreported. The publication explained, according to the announcement:
A virtual currencyexchange, which has more than 10 billion won in sales such as Bithumb, Coinone and Korbit, or more than 1 million visitors per day, is expected to receive the government’s ‘Information Security Management System (ISMS)’ certification next year.
The regulators have also increased the standard and penalties applicable when a security breach occurs at exchanges. “We will not allow virtual currencytransactions unless the requirements for protection of investors, transparency of transactions and other measures are met through prompt legislation in the near future,” the government was quoted by the publication.
A Ban on Banks, Minors, and Foreigners
The measures also impose a ban on foreigners and minors. “Foreigners who are not residing in Korea or minors including high schoolstudents will not be able to open an account for virtual currency transactions in Korea,” the news outlet detailed. Moreover, those who already own cryptocurrencies will not be able to make additional trades.
As for a blanket ban suggested by the Ministry of Justice, the news outlet noted that “the ban, which has been reviewed by the Ministry of Justice, has not been adopted at the meeting. It was reported that the government was worried that if all transactions were banned, there would be controversy over infringement of private property.”
Clampdown on Virtual Bank Accounts
The government’s measures include a “clampdown that called for banks to stop issuing virtual accounts for digital currency exchanges,” wrote the Investor. These accounts are issued by banks for cryptocurrency exchangecustomers. News.Bitcoin.com explained on Wednesday how a virtual account is needed for cryptocurrency trading in Korea.
According to Hankyung, the government asked banks to confirm whether the owner of the cryptocurrency account is a minor or a foreigner. However, a bank official told the publication that “banks only issue virtual accounts to the exchanges and do not know who the virtual accounts are issued to.”
Crime, Monitoring Trends, and Taxation
The government also decided to strengthen the crackdown and punishment of cryptocurrency related crimes, including the investment and recruitment of multi-level sales, fictitious coin sales, and illicit transactions. In addition, the news outlet conveyed:
The police are planning to conduct a special crackdown on ‘hacking and personal information infringement cases’ related to virtual currency, as well as investigating the actual conditions of virtual currency transaction refunds.
The Financial Services Commission (FCC), the Financial Supervisory Service (FSS), and the Korea Exchange will be monitoring cryptocurrency tradingtrends as well as “abnormal trading of virtual currency related stocks,” the publication noted.
As for taxation, the government announced that it will examine the issue by forming a task force with private experts and related organizations such as the Ministry of Strategy and Finance and the National Tax Service. News.Bitcoin.com recently reported on the government planning to taxbitcoin use as well as get user data from exchanges.
Images courtesy of Shutterstock and Hankyung.
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