Cryptocurrency trading in South Korea is about to get a legal framework soon if one lawmaker has his way. Representative Park Yong-jin, of the ruling Democratic Party of Korea, announced on Monday that he will be introducing three bills in July designed to regulate the rapidly expanding field.
According to the Seoul-based newspaper The Korea Herald, one proposed revision to the Electronic Financial Transactions Act would mean that traders, brokers and other business entities involved in cryptocurrency transactions will be required to get regulatory approval from the Financial Services Commission. The requirements include the retention of capital of at least 500 million Korean won (about $436,300) and data processing facilities. Additionally, revisions to the laws on income tax and corporate tax would allow financial authorities to tackle tax evasion from cryptocurrency transactions.
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In his proposal, Park listed a number of issues that he thinks require intervention to protect local investors. These include the lack of state-led guarantees of cryptocurrencies’ values, their non-exchangeability with fiat currencies and the possibility of a cryptocurrency bubble bursting and wreaking havoc on the South Korean economy, comparing it to the Dutch tulip mania in the 17th century.
After the Chinese central bank forced all the major bitcoin exchanges in China to change their way of doing business, dramatically hurting their trading volumes, other Asian markets rose up to fill the void left by the former top market.
South Korea is now at the top of the global cryptocurrency trading rankings with three local exchanges, Bithumb, Korbit and Coinone, among the top fifteen biggest venues for Bitcoin and Ethereum in the world. Given this, any major step by the Korean government regarding cryptocurrency trading , whether it is a crackdown on some business practices or an establishment of a supportive regulatory framework will have a major impact on the global marketplace.
In news from the other half of the Korean peninsula, we recently saw that Dennis Rodman’s peace mission to North Korea was sponsored by PotCoin.