South Korea Drafts Up Official Legislation for Cryptocurrencies

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The leading financial regulator of South Korea — the Financial Services Commission (FSC) — has just put the finishing touches on a proposed legislative package that would formally legalize, and thus regulate, cryptocurrency exchanges in the nation.

Somewhat ironically, this legalizing effect would be created by categorizing crypto exchanges as “unauthorized fundraisers.”

The FSC’s new legislative initiative seeks, then, to clarify the previously ambiguous regulatory atmosphere surrounding crypto e-commerce ventures in the Asian tech hub nation.

Accordingly, under the new laws, cryptocurrency exchanges in South Korea would be mandated to acquire a license from the FSC before being allowed to open their doors.

Exchanges will need to prove their reputability, per an anonymous FCS official:

“Cryptocurrency exchanges will be required to maintain standards for consumer protection, such as having separate deposits for customers’ assets, and for increasing transparency, such as having a procedure for confirming customers’ identity.” “The authorities will also be empowered to prosecute exchanges that break these rules.”

South Korea Outlines Proposed Legislation for Cryptocurrency Exchanges https://t.co/Sdg1xx4uHs pic.twitter.com/N3hfQ4ohLc — bitcoin news (@crypto4news) November 29, 2017

On another, albeit slightly stricter front, the FSC’s Vice Chairman also announced a new set of anti-money laundering (AML) laws that would give South Korean regulators the ability to devise ways to mitigate “crypto” laundering:

“We will improve the safety of financial transactions by establishing a discipline system corresponding to the risk of money laundering of new products.” “We will draw up thorough countermeasures that prevent cryptocurrencies, like bitcoin, from being a new channel for money laundering.”

In other words, the FSC will surely make exchanges in the nation comply with stricter Know-Your-Customer (KYC) laws so they can have a stronger purview over potential launderers should the need for an individual investigation arise.

All in all, then, crypto buying and selling will be allowed in South Korea, although it will be heavily regulated at the exchange level.

TLDR: South Korea’s Financial Services Commission (FSC) is going to officially legalize the operation of cryptocurrency exchanges, with a few caveats.

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