South Korea’s finance minister Kim Dong-yeon said on Thursday that the government has no plans to shut down cryptocurrency trading, according to the report from Reuters.
In response to a question from a lawmaker on the government’s plans for regulation of the cryptocurrency industry, Kim Dong-yeon said: “There is no intention to ban or suppress cryptocurrency [market].” He added the government’s immediate task is to regulate exchanges.
The country’s customs earlier on Wednesday announced it had uncovered illegal cryptocurrency foreign exchange trading worth nearly $600 million. “Customs service has been closely looking at illegal foreign exchange trading using cryptocurrency as part of the government’s task force,” it said.
The Korea Customs Service did not give out any particular companies that had been caught on cryptocurrency fraud. However, the methods in general were discussed. About 74% of all the crimes are based on illegal foreign currency trading. The customs did not reveal its plans on stabilizing the situation, but it is evident that the attitude of South Korea’s government to cryptocurrencies is undergoing a process of serious transformation.
At the moment the foreign exchange regulation in South Korea is rather clear. To offer this kind of service a bank or a broker has to get a special license. Tax authorities require the additional documents for single transfers over $3,000. Companies and residents have to submit the same documents in case the annual sum of transfers exceeds $50,000.
The country is now considering a range of methods to calm down the overheated market. Cryptocurrencies are very popular among criminals and that is a big concern for South Korea. The recent decision on the mandatory usage of real-name accounts for cryptocurrency trading is aimed at preventing crimes. However, many of exchange rules violations are committed by exchange agencies and brokers.
The South Korea’s exchanges had to get through a difficult period. Even though CoinMarketCap reinstated them without any prior announcement, the changes in the country’s policy on cryptocurrency trading make things harder for them. Representatives of one of the major exchanges – Korbit – commented on the situation:
“Non-Korean nationals, both resident and non-resident, will not be allowed to deposit KRW at any domestic cryptocurrency exchanges when the new KRW deposit method is implemented. In order to comply with the identification and anti-money laundering regulations being enforced by the government, the current KRW deposit method will be terminated by the end of January 2018.”
Lots of investors expected South Korea to follow the example of China. There were lots of signs that the whole Asian market will make some tough decisions. The formidable news about the South Korea’s regulatory ban on anonymous crypto trading caused a lot of discussions and led to a significant decline in Bitcoin price.
At the press time Bitcoin price is down more than 7% for the last 24 hours and currently trading above $10,200, according to the data from CoinMarketCap. The total market capitalization of all cryptocurrencies is $511 billion.