South Korean government authorities have admitted to knowingly postponing crypto regulation in the country. The officials feared that doing so, would be interpreted by consumers as legitimizing the crypto markets. The South Korean authorities can be excused for having such fears. Cryptocurrencies and blockchain technology are uncharted territories in terms of regulation by governments. Giving guidelines instantly would have caused a frenzy of excitement in the crypto-markets that could have been unhealthy for everyone concerned.
Less than a week ago, South Korean authorities announced that the country will be regulating cryptocurrency exchanges in the same manner they regulate commercial banks in the country. The Korea Financial Intelligence Unit (KFIU) will be spearheading the efforts together with local financial regulators.
The South Korean authorities have been waiting for a bill to pass that will give the said local authorities the jurisdictional powers needed to regulate cryptocurrency exchanges. The bill was as a result of financial authorities requesting the government back in September, to regulate the crypto markets to protect all investors and increase the security in the space. One needs only to refer to the the hacking of the Coincheck exchange back in March and most recently, Coinrail,to understand their concerns in terms of cyber security.
Similar regulation is expected in different countries such as Russia and the United States. With respect to the latter, the Director of The SEC’s Division of Corporate Finance, William Hinman, has clearly stated that Ethereum is not a security. Mr. Hinman is quoted as referring to Ethereum as follows:
When we think about how Ether today is operating, at least, we see a highly decentralized network, not the type of centralized actor that characterizes securities offerings. In its current state, we don’t see value regulating it.
His direction with respect to Ethereum is some welcome progress for the Crypto-verse. This means that in the next few months, the SEC will formally state its stand on the other numerous cryptocurrencies such as Ripple (XRP), Tron (TRX), IOTA (MIOTA) et al.
The SEC progress is evidently slow, but as has been seen with South Korean authorities, no government agency wants to make a rush decision with respect to cryptocurrency regulation guidelines.