South Korea’s attribute with the cryptocurrency attention has ebbed and flowed over the years. There has been a blanket anathema on ICOs, set in Sep 2017, as well as clever rumours in Jan — that were eventually dismissed — that cryptocurrencies in their entirety would be banned.
However, things have warmed up in the Asian republic with speak rising that South Korea is now looking to lead the way in the fourth industrial revolution. South Korea’s organisation seems to have satisfied how much intensity there is in the blockchain and cryptocurrency space — throwing up with the citizens, who minister a vast portion of the tellurian cryptocurrency trade market; it was reported that South Korea processed over 14 percent of tellurian Bitcoin trades in Jul of last year.
The change in opinion from the government, however, has come with complicated regulations and manners in the use of cryptocurrencies.
Some particularly oppressive regulations that they have put on the crypto space in the past include:
Banning anonymous trading
Forbidding minors and organisation officials from trading
However, they have also acted definitely by:
Latest developments — sequence of crypto exchanges
The latest pierce from South Korea has seen them radically reclassify cryptocurrency exchanges as authorised entities. The new draft, which adds a lot of legitimacy to the blockchain space in the country, now classifies exchanges as “crypto item sell and brokerage.”
This is an vicious redefinition because it “recognizes crypto exchanges as regulated financial institutions,” as opposite to their prior sequence as “communication vendors.”
Of course, looking at cryptocurrency exchanges as authorised entities sounds intensely certain for the space in the country, as they are now noticed by the organisation as legitimate authorised entities that are afforded many protections and assurance. But, they are also apropos theme to many more authorised manners and regulations.
This would seem to be a certain step for the bland patron of exchanges, as they have had to humour with a number of issues that come with an ecosystem that has been tormented with problems — including hacks and fraud allegations. But, looking at the way in which the organisation has altered through the blockchain space, it is unsurprising that they have made this latest law in regards to exchanges.
Andrew Lim, the boss of South Korea Blockchain, a blockchain selling and PR company, told Cointelegraph that it was more a box of when, not if.
“Classifying all things blockchain was to be expected, generally when it comes to the exchanges and the vicious need for regulations. It wasn’t too long ago when you could open a cryptocurrency sell with a “mail sequence distributor” permit in Korea. There were frequency any regulations in place and the platforms they built the exchanges on were unbelievably insecure.”
A compulsory change
A look back at how things were before in Korea also sheds a lot of discernment into because things are streamer the instruction they are now with the latest regulations.
Lim goes on to explain just how powder things were before the organisation began stepping in to try and secure the exchanges in South Korea:
“Recently, we sent out a warning to investors about withdrawal their crypto resources in exchanges and a few hours later, Bithumb was hacked! we still remember a convention at a law bureau concerned in process making, and the orator observant that the exchanges were not probable if hacked or their information was breached.”
“It was positively violent that people were withdrawal hundreds of millions of KRW (South Korean won, which is equal to hundreds of thousands of dollars – nrd) in these exchanges. It truly was the wild, furious easterly — developed for hackings and fraud. Classifying them as authorised entities and carrying them underneath stricter organisation was inevitable, and it couldn’t have come any sooner.”
South Korea’s pierce to legitimizing cryptocurrencies
Moves such as legalizing remittance in Bitcoin and permitting fintech companies to process up to $20,000 worth of South Korean won in Bitcoin for users were rare at the time and seen as quite brazen thinking.
But the trade-off for this was that the regulators had a way in when it came to removing the exchanges to play by the rules. By permitting remittance, the exchanges in South Korea were now tied to the Financial Services Commission (FSC). They required collateral of at slightest $436,000 to be retained, and information estimate comforts for Know Your Customer (KYC) and Anti-Money Laundering (AML) in sequence to get the watchdog’s approval.
With the organisation now removing itself confirmed in the cryptocurrency marketplace of South Korea, it schooled along the way which aspects compulsory a hardline proceed and which indispensable support for the creation to grow.
A sweeping ban, in the same character as China, was imposed on ICOs in sequence to try to stop the scams that were apropos apparently prevalent in this space. It also focused in on the unknown inlet of digital currencies by banning unknown trading.
These big hits on the cryptocurrency marketplace in South Korea had many wondering if there was not a full and sum anathema on cryptocurrencies in the works. In fact, the rumors got so big that 200,000 people petitioned opposite it in January. This led to the Blue House — the plcae of the conduct of organisation in the republic — carrying to come out and dismiss the rumours.
Building the fourth industrial revolution
It has turn transparent that the South Korean opinion toward cryptocurrencies in terms of their organisation has altered substantially. It is not simply that they have left from hating it to amatory it, it’s that they have decided to get their hands unwashed and mold it into a applicable space in the republic that can assistance them be at the forefront of the fourth industrial revolution.
The change in opinion is most apparent when one looks at how they have topsy-turvy the ICO anathema recently, with Hong Eui-rak of the statute celebration of Korea observant of the legislation that put ICOs back on the marketplace in early May:
“The primary thought of the legislation is assisting mislay uncertainties confronting blockchain-related businesses.”
The South Korean special cabinet tasked with relocating brazen the fourth industrial series also gave some insight into what the thought is with the cryptocurrency law on May 29.
“We need to form a assign force including private experts in sequence to urge clarity of cryptocurrency trade and settle a healthy trade order. We will also settle a authorised basement for cryptocurrency trading, including accede of ICOs, through the National Assembly Standing Committee.”
Furthermore, there have been additional signs that point towards this change in attitude.
The country’s Ministry of Science and Information and Communication Technologies announced a vital Blockchain Technology Development Strategy on Jun 21
The country’s executive bank began exploring the thought of using cryptocurrencies and blockchain in May
Businesses, such as telecommunications user SK Telecom, announced the recover of an item management use with blockchain record on Apr 23
Samsung revealed a new blockchain-powered logistics height — dubbed Cello 3.0 — on Jun 30.
Exchanges in the headlights
Now, the latest authorised breeze from the organisation involving the blockchain space is focusing on new categories for blockchain and, especially, cryptocurrency exchanges, putting them up subsequent as the zone that needs to be dealt with.
On face value, exchanges are now famous as authorised entities, and this is vital because it is an acknowledgment from the organisation that they noticing the ecosystem as a legitimate one.
But this pierce is a double-edged sword for exchanges, who have already jumped through a number of hoops in the government’s march toward controlling blockchain and cryptocurrencies.
The Head of Operations Korea at EOS Asia, John Yoon, remarkable to Cointelegraph that the primary concentration of this reclassification seems to be directed at exchanges and the sell that they produce:
“[The new classifications] will come out maybe at the end of the month or early August, from what we hear. Cryptocurrency exchanges and sell will be the pivotal issues, as most Koreans are carrying issues on Bithumb and Upbit, when it comes to exchanging and depositing/withdrawing.”
Yoon goes on to explain that this pierce from the organisation is clearly certain for bland users of the exchanges — because of the problems already felt when depositing and withdrawing — but also points out that the exchanges will be heavily monitored now.
“[The exchanges] will be constantly monitored for their turn of confidence and to make sure all is on the up and up. For customers, it will be great, as it will open up more opportunities to invest in crypto.”
The Korean ministries have been operative since the end of last month to furnish the final breeze of a new blockchain attention sequence scheme, which is approaching by the end of July. It is, of course, approaching that the insurance and approval that comes with these new classifications will be profitable for exchanges in the long run, but they will also be hold to harsher manners and regulations.
The South Korean pierce could be compared to the way in which Japan is looking to arrange out the issues with exchanges — generally in the light of two vital hacks in Tokyo, that of Coincheck on Jan 26, 2018 and Mt.Gox on Feb 7, 2014 — with their Financial Services Authority (FSA) investigating exchanges and arising business alleviation orders.
Japan is looking for the exchanges to perform to the preferred customary of the organisation and regulators, much like the Korean government. However, in Japan, there was a recoil from these oppressive regulations — as some exchanges decided to go out of business, while the heads of Bitflyer and Bitbank quit the Japan Virtual Currency Exchange Association (JVCEA) after also receiving these orders.
However, Yoon does not think the recoil will outcome the Korean exchanges as much, he indeed expects this law to kindle the expansion of more exchanges.
“I don’t think any [exchanges] will quarrel opposite it. Actually, there might be more created. Once regulations are up, we design to see the number of exchanges double — or even triple — by the end of the year.”
Better for business
It is not only the people in assign of exchanges and the business who have been watchful for approach regulation. Yoon also explains that many businesses that work with or around cryptocurrencies have been rather in limbo, not sure which instruction the South Korean organisation would go with their regulations. But now, they have a tangible outline.
“There are many banks here that are in a wait-and-see mode. A lot of Korean companies are going to Singapore and other [places] to do their ICOs, so the Korean organisation is behaving quick to incorporate these regulations.
Companies that have blockchain businesses in South Korea seem happy to see law entrance in, as it spells a better destiny for the space.
“This is another step in the tour of legitimizing the item category by providing regulatory horizon for facilitating value sell of digital assets, in one of the most heading geographies in the space,” Agada Nameri, General Manager of iCapital, told Cointelegraph.
Additionally, Uriel Peled, co-founder at Orbs, suggested to Cointelegraph: “Korea has the intensity to turn the ‘blockchain nation.’ If these organisation initiatives go hand-in-hand with training blockchain engineers, Korea is in a singular position to turn the tellurian personality in blockchain.”
Regulation opening the doors
There looks to be a conflict every time regulators step into a new space — as is being seen in Japan and now in South Korea, with these new classifications changing things for exchanges. As crypto businesses start to come underneath more scrutiny, they are faced with the preference to possibly better themselves or simply leave the space.
But on a elemental level, it can only be seen as a good thing. The cryptocurrency space descended into a ‘wild west’ conditions because there was no control, and now that the controls have stepped in, those who want to sojourn in the space have to up their diversion and furnish a creditable service.
All the while, the act of regulating and creation authorised exchanges is simply legitimizing the blockchain and cryptocurrency space more, laying a substructure for a healthier sourroundings down the line.