South Korea to Relax Crypto Regulations
The incoming head of South Korea’s Financial Supervisory Service is looking at easing cryptocurrency regulations. The announcement by Yoon Seuk-heun known to be a reformist brings a sigh of relief to cryptocurrency firms and investors facing intense regulatory scrutiny in recent months.
“Regarding cryptocurrencies, there are some positive aspects,” he said according to Korea Times.
Yoon says a clear regulatory framework will enable the nascent industry to grow. A more stable market will give rise to more products and services according to the new chief. The industry is however unique and its nuances must be fully understood when coming up with new regulations, he said.
The Financial Services Commission (FSC) which oversees the FSS bars cryptocurrency exchanges from offering anonymous trading to customers. Users must use real names and all accounts must bear the same names as those in the bank account. Deposits and withdrawals can only be made if this condition is met.
New Accounts Rejected by Banks
The rules saw banks reject new cryptocurrency accounts citing the high cost of operating them. Previously, a single account could contain small amounts of funds belonging to thousands of customers.
Foreigners are also locked out from participating in the market, a measure that authorities say was aimed at curbing money laundering. Daily volumes dropped significantly when the new measures were put in place.
Yoon who ascended to the position on May 8 was nominated by the FSC. The FSC sets policy and supervises the FSS. “The FSS will collaborate with the FSC when an inspection on policies and financial institutions has different configurations associated with different scopes,” Yoon said.
He, however, declined to give details about the direction the new regulations might take.
“There are a lot of issues that need to be addressed and reviewed. We can figure them out but gradually,” he said.
Despite recent crackdowns, South Korea remains a major cryptocurrency hub worldwide accounting for a sizeable part of transactions. Efforts to check the sector have been in the past met with public outcry. The frenzy for bitcoin and other cryptocurrencies was the most intense in the Asian nation with investors often getting friends and relatives to participate in the then soaring market.
The excitement is yet to die down and bitcoin still trades at a premium.
In other news, legislators are reportedly working on new regulations for the ICO sector. Under the proposals, ICOs will be allowed as long as they fulfill certain conditions. ICOs were banned in South Korea last year.