The Financial Services Commission (FSC) of South Korea Takes Steps to Regulate Cryptocurrencies
As we enter the new year, the Financial Services Commission (FSC) of South Korea has made significant decisions regarding the regulation of cryptocurrencies. In a legislative notice published on January 3, the FSC expressed concerns about money laundering and illegal financial outflows associated with South Koreans acquiring cryptocurrencies from foreign exchanges.
To address these issues, the FSC has proposed an amendment to the Enforcement Decree of the Credit-Specialized Financial Business Act. The main objective of this amendment is to prohibit the use of credit cards for purchasing cryptocurrencies, especially on international exchanges. This action is part of a broader plan to strengthen regulations in the bitcoin industry.
In addition to the proposed amendment, the FSC has recommended a modification to the Credit Finance Act, which would prevent individuals in South Korea from buying cryptocurrencies using credit cards. This move aligns with the government’s efforts to regulate the cryptocurrency business more strictly. Furthermore, the Ministry of Justice has announced the development of a “Virtual Currency Tracking System” to combat money laundering facilitated by cryptocurrencies.
The year 2023 will bring a significant transformation in South Korea’s approach to cryptocurrency regulation. The Financial Services Commission (FSC) recently passed the Act on the Protection of Virtual Asset Users. This act focuses on ensuring user safety, transaction transparency, and market discipline in the cryptocurrency industry. Additionally, South Korea plans to introduce comprehensive cryptocurrency legislation by 2024 to further institutionalize the industry.
Looking ahead, the South Korean parliament is expected to enact measures governing the digital asset market starting from April 2023. This development follows the introduction of 18 laws related to digital assets, which are currently under discussion in the Political Affairs Committee of the National Assembly of South Korea.
South Korea’s proactive steps towards cryptocurrency regulation demonstrate its commitment to addressing concerns related to money laundering and illegal financial activities. These measures aim to protect users, ensure transparency in transactions, and establish a more robust framework for the cryptocurrency industry.