The National Assembly of South Korea’s legislation and judiciary committee has passed a crucial digital currency-related bill on Thursday, legalizing crypto in the country.
Dubbed Special Financial Information Law, the legislation faced multiple delays and now brings proper guidelines to companies providing crypto-related services.
Exchanges operating in the country, from now on, have to implement the Financial Action Task Force-recommended anti-money laundering and counter-terror financing provisions.
The new law also made it mandatory for exchanges to receive approval from the Financial Services Commission and the Korea Internet & Security Agency (KISA) to offer services to Korean nationals.
The lawmakers also stress on the issue of increasing attacks on the crypto exchanges and precautionary provisions in the new law.
According to the Special Financial Information Law, digital asset exchanges must obtain an Information Security Management System (ISMS) license from KISA to continue offering their services.
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This might weed out many small exchanges that only opened businesses to ride on the bullish trend of crypto.
Notably, only six exchanges currently operating in South Korea – UpBit, Bithumb, Coinone, Korbit, Gopax, and Hanbitco – have obtained an ISMS license from KISA.
Multiple major South Korean exchanges, including UpBit were hacked in the past, resulting in the loss of millions in digital currencies.
Welcoming gesture from the industry
The representatives of the crypto industry in the country, including Kim Seong-ah, the chairperson of the Blockchain Association of South Korea and operator of Hanbitco, welcomed these new regulations as they think this will legitimize digital currency in the country.
Meanwhile, in India, the apex court of the country yesterday squashed the harsh ban of banks offering banking services to crypto businesses, throwing a much-needed lifeline to the growing market.