Over the past six months or so South Korean lawmakers have been sending mixed messages over cryptocurrency regulations. One day we read about a Bitcoin crackdown, the next day trading goes on as normal. What happens in South Korea impacts the entire market since such a high percentage of trade volume occurs on exchanges in the country.
This week the news has been positive despite the current market correction. According to local media the newly appointed Financial Supervisory Service (FSS) Governor, Yoon Suk-heun, has said the country’s top financial regulator will consider relaxing cryptocurrency regulations. Following appointment to the government agency, which was submitted by the Financial Services Commission (FSC), Yoon told reporters; “Regarding cryptocurrencies, there are some positive aspects,”
This suggests that more focus will go towards the implementation of more practical regulations to cultivate a stable crypto trading environment which in turn will benefit the economy over all. Yoon is known as an activist and reformist so subtle changes towards regulating the crypto industry are likely to be positive ones.
He went on to state that his department, the FSS, would collaborate with the FSC to inspect existing financial market regulations and current policies for cryptocurrency trading. Previously retail traders were prohibited from using anonymous accounts and had to supply real name and bank account information for greater transparency and to prevent money laundering and criminal activity.
An official from Bithumb, South Korea’s second most popular crypto exchange, said;
“Markets expected the introduction of the real-name registration system would have been helpful to revive trading, but these efforts failed as local banks were reluctant to invite more crypto traders. The daily transactions of cryptocurrencies plummeted to around 400 billion won from 4 trillion won before the financial regulators implement the new regulation,”
Officials from Upbit, the largest exchange in the country with over $1 billion in daily volume, added.
“We don’t oppose regulations. But you can’t entirely kill the markets by simply imposing regulations. What the new FSS chief should think about is how the regulators should provide remedies to help crypto trading and blockchain technology get better,”
A group of lawmakers are currently working towards a bill that will eventually rescind the existing blockade of initial coin offerings and permit ones that meet certain criteria and conditions set out in the regulatory framework. Mood in South Korea is very positive at the moment as the country is set to join Japan, Singapore and Hong Kong as an Asian crypto powerhouse.