Yesterday, India’s Supreme Court quashed the Central bank’s crypto ban that was curtailing cryptocurrency trading in the country. The crypto community perceived this as a big adoption boost for bitcoin and cryptocurrencies in general.
Today, the crypto community has yet another reason to celebrate. South Korean National Assembly just passed legislation that legalizes holding and trading crypto-assets.
Exchanges In South Korea Get The Go-Ahead From Regulators
South Korea is notably a large crypto exchange market in terms of volume. However, South Korean regulators have been rather reluctant about enacting legislation for the local crypto market over the past few years.
But, this has now changed after the passing of the amendment to the Act on Reporting and Use of Specific Financial Information. The passing of this law implies that South Koreans can now hold and trade cryptocurrencies just like any other legal business in the country.
The passing of the crypto legislation, which comes after two years of deliberations, mostly targets cryptocurrency exchanges in the country. Presently, over 70 exchanges in South Korea follow self-governing rules regarding cryptocurrencies. But moving forward, these exchanges will be required to adhere to strict Anti-Money Laundering (AML) rules and other laws required to prevent terrorism financing.
Moreover, local exchanges and crypto-related companies will be required to obtain an Information Security Management System (ISMS) license from the Korea Internet Security Exchange (KISA). This will allow the companies to secure important information about the companies themselves as well as that of their users. Several exchanges in South Korea, for instance, Upbit and Bithumb, have fallen victim to malicious hacks in the past that have led to the loss of cryptocurrency worth millions of dollars. The ISMS license will help prevent the occurrence of such hacks in the future.
All exchanges have been given a six-month window to get this license from KISA. However, any exchange that will not have obtained the certification after the six months will face closure. At the moment, only six exchanges posses the license: Upbit, Bithumb, Coinone, Korbit, GoPax, and Hanbitco.
It’s worth noting that this amendment will become law once it is signed by President Moon Jae-in. The enactment process will then commence a year later after the day of signing.
Reaction From The Community
According to sources, crypto investors in South Korea are ambivalent regarding the new law. Some believe that even with the new measures to curb hacks and theft, they will still lose money via taxes on trades. Others believe that tighter legislation on crypto will hamper the prices of the digital assets, illustrating their point with the example of the stock markets that are lackluster as a result of many regulations.
However, others are optimistic about the new amendment that has just been passed. Case in point, Sunga Sophie Kim, CEO of Hanbitco exchange who believes that the new laws will ultimately bring the much-craved legitimacy to the South Korean cryptocurrency industry.
“A foundation has been created to wash away the stigma of cryptocurrency exchanges, fraud, and debauchery and establish itself as a transparent and reliable industry. It will lead the development of the industry with the inflow of new capital.”
Binance’s CZ has noted that this is another huge step towards crypto adoption.
Tron Founder Justin Sun has also seemingly reacted to the news, tweeting in Chinese:
“나는 한국 공동체를 좋아한다”
This simply translates to “I like the Korean community”.