South Korea’s financial regulator is reportedly softening its stance on cryptocurrency trading, weeks after mulling a ban.
Choe Heung-sik, governor of the Financial Supervisory Service, said the government will support ‘normal transactions’ of cryptocurrencies according to Yonhap News.
At a meeting with representatives from cryptocurrency exchanges, Choe also said the government will ‘encourage’ banks to work with cryptocurrency exchanges, the report states. Currently, local banks have been reportedly reluctant to open virtual accounts for cryptocurrency trading amid the government’s crackdown.
A spokesperson for the Financial Supervisory Service did not immediately respond to a request for comment.
The statements are expected to be welcomed by South Korea’s crypto community, as well as world markets, with an outright ban on cryptocurrency exchanges mulled by regulators to clamp down on exchanges and money-laundering.
Following the news that South Korea might ban cryptocurrency trading, prices of cryptocurrencies including bitcoin dropped sharply last month.
The end of January saw the country’s financial watchdog implement a new rule for cryptocurrency investors, meaning they have to use real-name bank accounts in order to continue trading.
The move was part of the financial regulator’s push through a strengthened ‘know-your-customer’ (KYC) compliance to curb cryptocurrency speculation. The FSC said that the new rule is resulted from an inspection of domestic anonymous crypto trading accounts – assisted by six domestic banks, as well as the Financial Intelligence Unit. In addition, it also established an anti-money laundering guideline for cryptocurrency exchanges, which outlines situations where exchanges should stay alert to potential illegal activity.
The comments from Choe Heung-sik come days after a South Korean government official who helped regulatory efforts to limit cryptocurrency speculation died, according to multiple reports. Jung Ki-joon, head of economic policy coordination at the Office for Government Policy Coordination, was reportedly found dead at his home on Sunday, a South Korean news agency reported.
Cryptocurrencies like bitcoin and ethereum have rapidly gained popularity among global investors hoping to make quick money. However, the regulatory stand point of the market still remains unclear.
According to recent news, Japan’s cryptocurrency industry is reportedly preparing to establish a self-regulatory body. A group of Japanese cryptocurrency exchanges are rumoured to be uniting to create a self-regulating body following the Coincheck hack earlier this year.
Last week, Seven cryptocurrency companies in the UK recently formed a cryptocurrency trade body, bringing the first self-regulation to the industry. With the sector growing in popularity and calls on the government to introduce appropriate regulation to protect consumers and business certainty, CryptoUK will look to promote the development and recognition of digital currency technologies in the UK.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
