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Korean Regulatory Body suggests Cryptocurrency "Normalization"

Feb 22, 2018 Posted /  3538 Views

Korean Regulatory Body suggests Cryptocurrency "Normalization"

South Korea has found a way to remain in the global news- keep shifting your stance on cryptocurrencies and the media will report no matter what. But unlike the late December and early 2018, the recent reports claim that South Korea is changing its perception to a more favourable crypto ground. This week investors in the Republic of Korea (ROK) found a directional shift in government's attitude towards virtual currencies. The Reuters report claim that Choe Heung-sik, the governor of South Korea’s Financial Supervisory Service (FSS), told the local media,

“The whole world is now framing the outline (for cryptocurrency) and therefore (the government) should rather work more on normalization than increasing regulation.”

The head of the FSS has already faced a lot of dilemma over the matter and has been struggling with the lack of legislation in the industry. He even stated in November 2017 that “supervision [of cryptocurrency exchanges] will come only after the legal recognition of digital tokens as legitimate currency.”

Interestingly, Choe had warned in December 2017 that cryptocurrencies are risky investments and had also compared it to the bubble. At that point of time, he had remarked

“All we can do is to warn people as we don’t see virtual currencies as actual types of currency, meaning that we cannot step up regulation for now.”

Changing Stances

FSS had not only been facing a lot of perplexities from the cryptocurrency industry's volatile and uncertain characteristics, but also from the Korean officials' public statements on the matter. The variable attitudes have been a major cause of concern for the regulatory agency who has been assigned the mammoth job of formulating regulations of cryptocurrency trading as part of a larger task force. While the FSS-led taskforce set the nation’s first official rules around cryptocurrency trading on December 13, 2017, ambiguity around subjects of taxation and regulation of the exchanges persisted.

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On January 10, 2018, South Korea's biggest cryptocurrency exchange was raided by police and tax agencies. This mostly led to criticism by cryptocurrency community around the world and from thereon kicked off a week full of disagreements by top Korean officials that accelerated a market-wide meltdown known as “Red Tuesday” on January 16, 2018.

As a result, Choe had to declare at a parliamentary hearing on January 19, 2018, that one FSS employee was being examined “on suspicion that he or she traded a digital currency” precedent to government’s announcement of tightening its position on cryptocurrency trading. During the same hearing, the Office for Government Policy Coordination also confessed an inquiry of two officials for allegedly profiteering on government's official information after the events of Red Tuesday.

Korean officials finished the month of January by proclaiming on January 23, 2018, that anonymous accounts would from thereon will be banned and the real-name system will be implemented for the trading of cryptocurrencies as of January 30, 2018.

It has been only three weeks since the anonymous accounts were banned and Choe is suggesting better regulatory probabilities for the cryptocurrency industry. It is noteworthy that the statements of normalization had appeared subsequent to the sudden death of Jung Ki-joon on February 18, 2018. Jung, a 52-year-old man who led economic policy for the Office for Government Policy Coordination and was instrumental in leading the January clampdown. He died of “unexplained” causes in his home, though the reports that came out first hinted that he’d had a heart attack.

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Tags: Regulatory korea Normalization cryptocurrency

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