South Korean Bitcoin Exchanges Might Soon Be Regulated By Its Financial Authorities
There have been large spread rumors about the government of South Korea imposing a complete ban on crypto trading. Such rumors were mostly circulated over the past few days amongst the online Bitcoin communities who brainstorm over the future prospects of this crypto token. But the real story portrays a complete different scenario with the government being highly optimistic about the growth of local Bitcoin industry. It has even announced to come ahead with a regulatory framework for Cryptocurrencies which will take up Bitcoin brokerages and exchanges under its purview.
It was reported earlier that Kim Dong-yeon, the Minister of Strategy and Finance and Deputy Prime Minister of South Korea had declared that active investigation was carried out by the government for protecting customer assets, implementing stricter Anti-Money Laundering (AML) and Know your Customer ( KYC) policies and ensuring consumer protection amongst investors of Bitcoin and local Cryptocurrencies.
The South Korean government understands very well that enforcing impractical policies can cause investors to migrate their funds into over-the-counter (OTC) markets which although are not subject to stringent regulations are more challenging for the government to look after. Thus they surely are not dwindling over cracking down any of the aspects of Bitcoin market.
Given such a scenario, the rumors doing rounds amongst crypto enthusiasts do not seem to hold much truth. It was revealed last week by the ministry of finance and strategy of South Korea that it has already initiated the regulations drafting process in regards to cryptocurrency exchanges. The government might however implement the prevention of trading volume centralization within just a certain cluster. Coinone, Korbit and Bithumb account for more than 90% of the market share in South Korea. Bithumb leads the rally with a gigantic volume of daily trade which surpasses KOSDAQ, the largest stock exchange of South Korea. Kim Dong-yeon, the South Korean Deputy Prime Minister pointed out that, “the South Korean ministry of finance and strategy have drafted taxation policies on Bitcoin trading. But, regulatory frameworks around Bitcoin taxation will not be implemented in the 2018 amendment of the tax law.”
Some of the biggest financial institutions forming a part of the traditional finance market of South Korea have already started walking in the path of Bitcoin adoption and integration. The country’s second largest commercial bank Shinhan, has developed and tested a vault and wallet service of maintaining Bitcoin holding. A spokesperson of Shinhan had explained that the bank wishes to bring forth an insured and secured platform for the customers of South Korean Bitcoin exchanges to store their funds. This was done especially in the backdrop of Bithumb, the largest crypto exchange of South Korea being hacked twice this fiscal. CryptoCompare, the cryptocurrency market data provider has revealed that South Korean Bitcoin exchange market consists of approximately 7% of global Bitcoin market share. With more and more financial institutions joining the Bitcoin bandwagon, it is expected that the long-term investment of general investors and consumers will also keep on growing in days to come.
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Tarunima Ghosh Laha
Tarunima Ghosh Laha is a Finance Post Grad from St. Xaviers who believes Finance is more than just Balance Sheets and Ledger creation. This filmy bookworm who believes she was a sloth in past life also nourishes a penchant of owning a private zoo someday. Equipped with a laptop and online Lexicon she is all set to give finance a glamorous makeover in the form of exciting writeups with bang on info and flashy new words.