May 28, 2023

South Korea fully legalizes cryptocurrency trading

South Korean Parliament Passes Legislative Amendments That Fully Include Trade cryptocurrencies in the legal field. This will lead to a restructuring of the country's blockchain industry, The News Asia warns.

After the amendments are signed by the president of the country, a one-year period of their implementation will begin. At its end, a six-month grace period will come into force.

Presumably, blockchain companies will have to fully bring their activities in line with the new rules by September 2021.

According to the accepted standards, bitcoin exchanges, ICO issuers and other industry participants are required to:

  • comply with all financial reporting requirements;
  • use only bank accounts with real names and provide
    compliance with KYC procedures in conjunction with a partner bank;
  • certify information security management systems (ISMS).

The South Korean Financial Services Commission (FSC) last year called on the National Assembly to urgently adopt cryptocurrency regulations.

In early 2018, the FSC established guidelinesprinciples for cryptocurrency exchanges. They demanded the availability of KYC systems on the platforms and the refusal to use virtual anonymous accounts, the publication recalls.

However, today only four Korean exchanges - Upbit, Bithumb, Coinone and Korbit have a banking system with real names. They, as well as GoPax and Hanbitco, use ISMS.

In September 2019, there were more than70 platforms for trading cryptocurrencies. Most of them have failed to establish partnerships with banks, and ISMS certification, which is produced by the Korea Internet Security Agency (KISA), may be too financially unbearable. New regulation rules may lead to 4-6 cryptocurrency exchanges remaining in the country by 2021, The News Asia believes.

Earlier media reported that 97% of cryptocurrency exchanges in South Korea are on the verge of bankruptcy.