Cryptocurrency Now Fully Legal in South Korea

[Hydrogen]

The amendment to the Act on Reporting and Use of Specific Financial Information passed this afternoon in a full session of National Assembly. The passing of the amendment signifies the official entry of cryptocurrency trading and holding into the legal system for the South Korean government. A restructuring of the domestic blockchain industry is expected to take place as a result of this event.

One of the main caveats to the enactment of the amendment is that cryptocurrency exchanges will need to comply with reporting requirements. Although the larger exchanges mostly comply with the new rules already, small and medium-sized exchanges may have trouble obtaining the contracts to reach full compliance.

President Jaein Moon must sign the amendment into law to start the enactment process which will be one year from the date of signing followed by a 6-month grace period. This means that all entities affected by the law will need to be in full compliance by September 2021. The passing of the amendment comes after a lengthy 2-year process of deliberations and trial and error of recommended guidelines but few official laws. Exchanges and companies handling cryptocurrency up to this point have been mostly self-governing in regard to their cryptocurrency, but have run into trouble with how the cryptos are turned into fiat currency.

Exchanges, trusts, wallet companies, and ICO are now required by law to have a real-name verification partnership with an approved Korean bank. Real-name accounts prevent money laundering by assigning a verified individual to a single bank account with which they may withdraw and deposit fiat currency from and to an exchange. Also, companies must obtain an information security management system (ISMS) certification.

Some exchanges already have the real-name verification system on their platform as it was imposed via guidelines set by the FSC in early 2018. The ISMS certification system is granted by the Korea Internet Security Agency (KISA) which certifies that a company can secure key information assets for itself and its users. This certification can be very costly, but all exchanges must comply within 6 months of its enactment or risk being shut down.

The measures imposed by the law will ensure stricter AML and combating the financing of terrorism (CFT) compliance by exchanges mainly.

Up until now, anyone could launch an cryptocurrency exchange in South Korea. By September 2019, there were over 70 exchanges in the country. The saturation of the market has led to a bevy of problems for consumers in the industry. Many have suffered fraud ranging from exit scams and false trading volumes to insider trading and blatant manipulation of the value of some coins.

Local Korean cryptocurrency investors have mixed feelings about the introduction of the new law into the system. Some have applauded the measures proclaiming that a ‘New Coin Age‘ has begun in Korea. Others further noted that “[[cryptocurrency] is nationally recognized as gambling no more.]”

On the other hand, cynical investors have pointed out the futility of such measures. While the security of investors’ assets is objectively increased by these measures, one points out that despite the added security, investors will still lose their money because they will have to pay taxes on their trades. Furthermore, another investor on Coinpan begs the community to see how poorly the stock market is performing with all of its regulations these days – “[with all the new regulations to the cryptocurrency industry, a massive cooldown of the values of cryptos will ensue.]”

There is a concern that investors will suffer further damages as perhaps their preferred exchange closes, charges higher fees, or requires more documentation to continue trading on the platform. By the end of the 6-month grace period, crypto traders in Korea may actually only have 4 to 6 exchanges to choose from since only Upbit, Bithumb, Coinone, and Korbit have the real-name banking system and the previous 4 plus 2 others, GoPax and Hanbitco are utilizing ISMS.

Investors have suffered greatly by the ‘wild west’ regulatory landscape of the cryptocurrency trading industry in Korea in the past few years. Numerous accusations and some guilty verdicts of fraud have been doled out. Upbit has been in the middle of fraud accusations for years, as has Bithumb, BOSCoin, Komid, and Newbit, among others. In response to the attempt to rectify the wrongs of the past, Hanbitco CEO Sunga Kim commented, “A foundation has been created to wash away the stigma of cryptocurrency exchanges, fraud, and debauchery and establish itself as a transparent and reliable industry. It will lead the development of the industry with the inflow of new capital.”

https://thenews.asia/amendment-to-special-reporting-act-passes-cryptocurrency-trading-now-legal-in-south-korea/

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South korea's legalization of crypto isn't as good as the philippines with their relaxation on crypto taxes.

It appears every nation on earth recognizes the value of legalized crypto creating jobs, boosting tax revenues while providing consumers with greater options to protect savings from dangers associated with hyperinflation and default on deficits. EXCEPT the united states which insists on being closed minded to new innovations and developments like crypto which carry the potential to improve quality of life and standard of living for everyone.

That said this appears to be a mixed bag with some viewing it as a major stepping stone towards mass adoption. Detractors on the opposite side seem to think taxes and regulation will diminish the growth potential of crypto sectors.

What do people think about this?

[rdluffy]

It's very good to the cryptos in general, and for us
South Korea became a very prosperous country after the split with North Korea, and the technological vision proved to be essential for development.
It also shows us that cryptocurrencies are here to stay and it can become an important part of the world economy. It is quite a breakthrough, so they are putting themselves ahead of many countries

[Yaunfitda]

It's very good to the cryptos in general, and for us
South Korea became a very prosperous country after the split with North Korea, and the technological vision proved to be essential for development.
It also shows us that cryptocurrencies are here to stay and it can become an important part of the world economy. It is quite a breakthrough, so they are putting themselves ahead of many countries

Of course, crypto is here to stay no doubt about it.

But as what @Hydrogen, South Korea are going to implement stricter laws, and taxation which could burden more crypto enthusiast in the country as compare to other neighbouring South East Asia countries such as Philippines who are aiming to be a crypto hub in that region.

I guess I also have a mix feeling about this, I'm not saying it is bad, however, it looks like the South Korean government has cave in to regulatory body such as FATF to imposed a tight and very strict crypto compliance.

[fiulpro]

The government always tries to gain profit and use things according to them , when they saw that legalizing cryptocurrencies is something they will have to do sooner or later they tried and taxed it higher than ever .
The South Korean government is not the only one doing it , it's funny how the taxes are ridiculous in most of the countries where cryptocurrencies were legal.
Even before the cryptocurrencies were legal in some countries government was still earning from it .
Good news is it's legal there , bad news we need justifiable taxes and protection laws .

[tvplus006]

The legalization of cryptocurrency in various countries is very important for the cryptocurrency as a whole. It can be noted that a few days before, the Supreme court of India lifted the ban prohibiting cryptocurrency in the country. And the greater the number of countries will allow cryptocurrency, the faster will be included in everyday use.

[bearexin]

The good thing is that they are now legalizing the use of cryptocurrency, this is creating more awareness for bitcoin and other countries that have banned bitcoin will do the same thing very soon and will start allowing people to be able to buy and sell bitcoin.

Recently the federal court of India also approved the use of cryptocurrency and the news is everywhere.

All these good news will help to be creating more and more awareness for cryptocurrency and people who doubted it before will now come back to it.

[Chrystora123]

source: https://twitter.com/cz_binance/status/1236221675546566657

12 hours ago CEO Binance tweeted about this, we just have to wait until the whole country legalizes cryptocurrency..

[thisnewcoin]

source: https://twitter.com/cz_binance/status/1236221675546566657

12 hours ago CEO Binance tweeted about this, we just have to wait until the whole country legalizes cryptocurrency..

I don't think all the countries will accept cryptocurrency at this current stage, the good news is all the developed country is realizing the greatness of crypto and they are accepting it. I was really surprised by seeing India accept cryptocurrency news! But the developing country will not accept cryptocurrency right now, but I believe in this decade, we will see crypto in a great place in every country!

[Twinkledoe]

source: https://twitter.com/cz_binance/status/1236221675546566657

12 hours ago CEO Binance tweeted about this, we just have to wait until the whole country legalizes cryptocurrency..

I don't think all the countries will accept cryptocurrency at this current stage, the good news is all the developed country is realizing the greatness of crypto and they are accepting it. I was really surprised by seeing India accept cryptocurrency news! But the developing country will not accept cryptocurrency right now, but I believe in this decade, we will see crypto in a great place in every country!

Time will tell when will other countries will follow this progress in crypto. If they see that progressive countries are making it as a legal tender and they are embracing this blockchain technology wholeheartedly, then, what is so special with them that they can't accept this digital currency? Maybe for those countries who are treating bitcoin or crypto as illegal, they have to educate themselves on what is the real scenario here. More than likely, because they have no full control of its movement, the reason why they don't accept it. And the negative perspectives surrounding it. In time, they will learn what bitcoin or crypto really is.

[TopExchanger]

Legislation crypto in any possible country is very important for the community in general. It's a one more step toward the better future and maybe the cashless society.

[crwth]

You can't blame the people who are not technologically inclined to accept new things like Bitcoin. It's only a matter of time when they start to be left behind by that kind of innovation and might as well follow the path it takes. They just have to see it positively instead of the negative views on it, it's not going to be suitable for it, and there's nothing you could do but find a solution. That's the best way to do so you can innovate. Maybe they just want it all for themselves and not let the public to improve?

The detractors are just there to have that other point of view, and in the history of humanity, there are always disagreements, and it could lead to improvement as well. Investors who have lost money with this are emotionally attached to the negative, and it would be hard to change their views on it anymore.

People would still be feeling mixed emotions with this, and there could never be a consensus unless everyone is willing to accept it. It's all chaotic.

[KrisAlex18]

Well, if that is the thing then it would be better for South Korea because cryptocurrency is so valuable all over the world. There are already a lot of countries that accept cryptocurrency in their land, the reason is they have thoughts that cryptocurrency is very important and has so many benefits in terms of economy. The transactions online using cryptocurrency is much better, faster and safer compared to the real money or the fiat currency.

South Korea is an advanced country compared to others, so I was not shocked when I read an article about the cryptocurrency as fully legal in South Korea, as you can see, or as you analyze those countries that already accept cryptocurrencies in their land are those rich countries, and they are believing that cryptocurrency will give them more income.

[sheenshane]

Frankly, the government doesn't find bitcoin as an option for the users to protect their savings from dangers associate with hyperinflation and defaults. But they only see it as a disruption method and a leak from the loopholes of the government's taxation law. They just covered it by putting taxation and the cryptocurrency is almost no different than the stocks already.

The reason why the users were putting their assets on bitcoin before was the taxation. And now that it is being taxed, what will be the point then? Technically, no but just as an investment.

Just my two sats!

[criza]

This could prove the idea of Bitcoin gradually becoming a cryptocurrency that is accepted and used by the world. Even though the price of Bitcoin in the present is down, this could serve as a hope for investors or holders that it would make a comeback in the later days this month. Mass adoption would sustain the demand for Bitcoin and could in fact make the price of Bitcoin make a comeback and increase again the future especially when the halving event comes closer everyday.

For me, we should trust Bitcoin to survive the resistance and fall in the present and anticipate a bright future for it.

[Akiiiil]

It is really good but on the other hand, the regulation may restrict the freedom of crypto, KYC will be required in any situations

[maxdin]

It is really good but on the other hand, the regulation may restrict the freedom of crypto, KYC will be required in any situations

it may, but take in account that other countries will come up with their own regulations (French court admitted crypto's legality also)
anyway crypto is not living in some country it is online and will remain there - you can always get around laws of countries with it (however it not welcomed here).

[Twentyonepaylots]

This could prove the idea of Bitcoin gradually becoming a cryptocurrency that is accepted and used by the world. Even though the price of Bitcoin in the present is down, this could serve as a hope for investors or holders that it would make a comeback in the later days this month. Mass adoption would sustain the demand for Bitcoin and could in fact make the price of Bitcoin make a comeback and increase again the future especially when the halving event comes closer everyday.

For me, we should trust Bitcoin to survive the resistance and fall in the present and anticipate a bright future for it.

In other words bitcoin will be the most effective after fiat because of some negative possibilities like for virus spreading. How perfect it is that the cryptocurrency is now legal in South Korea when they are trying to burn the paper money they are going to get in local banks for safety measures against the corona virus, I mean I'm not happy for what is the virus is causing them but just think of it. lol.

[FanatMonet]

It is really good but on the other hand, the regulation may restrict the freedom of crypto, KYC will be required in any situations

If in my country they guaranteed the protection of my crypto assets from various kinds of scammers and other problems, then for me non-anonymity and various kinds of checks would not be any problem. Therefore, I envy South Korea that they did this so quickly.

[Spaffin]

It is really good but on the other hand, the regulation may restrict the freedom of crypto, KYC will be required in any situations

If in my country they guaranteed the protection of my crypto assets from various kinds of scammers and other problems, then for me non-anonymity and various kinds of checks would not be any problem. Therefore, I envy South Korea that they did this so quickly.

I am also very happy for the Koreans, because they will get much more benefit from the legalization of cryptocurrencies than the negative from state control.  In addition, the provision of passport data for cryptocurrency users is not scary for me, because it can protect me in a certain situation, as well as reduce the percentage of crime and fraud that use cryptocurrency.

[kooboat]

Good news for crypto enthusiasts in that country. Let's hope it  generate more interest for most people in the crypto sphere. I guess this is the kind of news to always generate that great vibe when it comes to the adoption of cryptocurrencies by the masses across the globe.