South Korea Positive Blockchain And Crypto Legislation
The government of South Korea is hurrying the finalization of the country’s first crypto and blockchain legislation. So South korea recognize the cryptocurrency and blockchain sector as legitimate industries.
What it Means For Crypto
Local financial authorities initially disclosed their intent to regulate the cryptocurrency market stricter but is appearing more comprehensive regulatory frameworks.
Due to this framework, in June, appeared subsequent two security breaches, experienced by Bithumb and Coinrail. Formerly the second and fourth largest cryptocurrency exchanges in South Korea. The government acknowledged the necessity of strict regulatory frameworks to oversee the local cryptocurrency market.
Previously, cryptocurrency exchanges were governed as communication vendors. This exchanges outside of the scope of the Financial Services Commission (FSC), where the main financial watchdog of South Korea. Companies were permitted to run trading platforms with a simple communication vendor license. (It costs less than $40 with no base capital and requirements).
Passing of the new cryptocurrency and blockchain bill, digital asset exchanges will be considered as regulated financial institutions. They will be under the control of the FSC. Strict security measure, internal management system, Know Your Customer (KYC), Anti-Money Laundering (AML), and transaction monitoring requirements will be demanded by the government. This ensure crypto exchanges providing the same level of service as commercial banks and major financial service providers.
“Under current regulations, there are clear limitations in preventing money laundering on crypto exchanges because the only way authorities can spot suspicious transactions is through banks. If the bill of lawmaker Jae Yoon-kyung from the Democratic Party of Korea passes, local authorities will be able to impose identical regulations on crypto exchanges that are implemented on commercial banks,” a KFIU spokesperson said.
The vast majority of analysts are predicting the price of major digital assets to surge drastically. If this strong momentum keeps over the next 12 months. If the next rally of cryptocurrencies can be supported by positive legislation the movement of the market will be significantly intensified.
How Far Away is it?
Already, cities like Busan, have disclosed their plans to create vibrant environments for cryptocurrency startups and blockchain development teams. Assuming the bill will be passed in the next several months, possibly in the fourth quarter of 2018.