The government of South Korea said that it will impose new measures to regulate the cryptocurrency market. The intention is to stop the speculation in cryptocurrency market due to its consequences in the population. The objective of these measures is to protect investors and merchants that use cryptocurrencies.
More Cryptocurrency Regulations in South Korea
According to Reuters, new regulations will be implemented in order to fight Money Laundering and other criminal activities.
“The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility,” the government said in a statement.
The report says that cryptocurrency exchanges have higher prices for the virtual coins offered. For example, Ripple and Monero can be traded for up to 12 and 16 percent more than in other exchanges. This lack of regulation creates several benefits to crypto-exchanges and produces loses in the investors.
At CoinStaker we have written how South Korea is increasing the regulations around cryptocurrencies. Some weeks ago, South Korea has prepared a law that would ban exchanges that do not follow strict rules.
“The objective of this law is to protect good merchants and establish a strong financial order regulating similar reception behaviour,” reads the Act on the Regulation of Similar Reception.
Following the report, the ban would be to these exchanges that would allow to open anonymous accounts. Besides that, the legislation would allow regulators to increase the measures if they believe it is needed.
Not Spreading FUD
It is important to understand that the bank system in South Korea is different than the American or the European. It is possible for some businesses to open virtual accounts in order to purchase different items online. But the cryptocurrency exchanges are already covered and taking different measures in order to avoid problems with the government.
According to a Reddit user that explain the situation, virtual accounts are registered in the exchanges with the user’s name. In perspective, it is easier to open an account in Coinbase than in Bithumb, because of the different requests. These exchanges will not close because of these new regulations and for sure will bring more legitimacy to the markets.
South Korean Cryptocurrency Market
South Korea is one of the most important cryptocurrency hubs. Individuals have been investing in this volatile market during the last years. It has also an important volume of the virtual currency market. After Japan and the United States, and sometimes the Eurozone, South Korea manages an important bitcoin volume.
The famous cryptocurrency has been growing this year more than never before. This situation created different regulations all over the world. Governments started to control this currency in different ways. Some of them, like China, could ban cryptocurrency exchanges and Initial Coin Offerings. South Korea has taken various moderate regulations in order to fight Anti Money Laundering (AML) and criminal activities.
These who do not follow the regulations would face important penalties that arrive up to 10 years of imprisonment and $500 million won (South Korean currency). According to an AFP report, all anonymous traders accounts will be closed in January.
“We will… resolutely respond to such crimes by slapping maximum sentences possible on offenders. Leave all policy options open, including closure of a cryptocurrency exchange when deemed necessary,” reads the report.
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Tags:Asiabitcoinbitcoin priceBithumbBTCCryptocurrenciesCryptocurrency ExchangesFUDGovernmentInvestmentsMarketPriceRedditRegulationsSouth Korea