Bitcoin took a hard hit as the South Korean government announced new legislation. Although, many outlets published false reports claiming that the South Korean government is closing down cryptocurrency exchanges in the country, that is not the case. However, the country is firm when it comes to banning ICOs. The South Korean government has never released such a statement.
The official document released by the South Korean government translated by CoinJournal read:
- The government will continue to evaluate the cryptocurrency trading trend and impose practical regulations in a timely manner.
- The Ministry of Justice has drafted a special cryptocurrency law and is considering the possibility of closing down exchanges involved in suspicious or illicit activities such as money laundering.
- The government will strictly handle speculative movements in the local cryptocurrency market but will facilitate the growth of cryptocurrency and blockchain technologies.
Earlier this year, the South Korean government imposed a series of rules prohibited foreigners from trading cryptocurrencies in the local market. South Korean government is planning to better regulate the market and will not stop the growth of cryptocurrency. Financial Services Commission has said that the crypto market is volatile and insecure. Earlier this month, one of the Korean cryptocurrency exchanges, Youbit, filed for bankruptcy after it was hacked a second time in eight months.
FSC & New Regulations:
South Korean Financial Services Commission said the new rules will come into effect starting January. Anonymous trading is banned, real name accounts with valid proof are necessary to participate in cryptocurrency trading. Banks are asked to stop offering virtual accounts to cryptocurrency exchanges. The government also asked to monitor the market closely and prevent any irregularities affecting the economy.
However, these uncertainties created by the government took a dip in the cryptocurrency market. The price of Bitcoin and Ethereum both fell down on Thursday. The market is gradually seeing a rise.
Local exchanges welcomed the South Korean government’s new regulations. The sole intent of these rules is to stop money laundering and investment fraud. South Korea is the 3rd largest market for the cryptocurrency. South Korea reportedly makes up about 20 percent of the global bitcoin trade. It’s being speculated that ICO (Initial Coin Offering) will see further regulation in 2018.