South Korea’s government is in the process of finalising the countries first ever pieces of cryptocurrency and blockchain legislation, recognising the emerging sectors as a legitimate industry.
The new cryptocurrency and blockchain bill will see digital asset exchanges regulated under the jurisdiction of the FSC, and receive the same legal oversight that existing financial institutions operate under. The bill will ensure tighter enforcement of Know Your Customer (KYC), Anti-Money Laundering (AML), internal management systems and transaction monitoring, all of which will create the same security and structure that customers of commercial banks and financial service providers experience.
Exchanges are currently under the regulations of communication vendors, and are therefore beyond the remit of the Financial Services Commission (FSC). Trading platforms were operated under a simple communication vendor license, which required no base capital in order to set up. Needless to say, the current framework hindered both legitimacy of the markets as well as institutional investment.
By legitimising and regulating cryptocurrency markets with new regulations, major industry capital will be available for key structural investments. The market as a whole should experience a significant upturn if this bill and others are passed before the end of 2018.
Other sovereign nations have also begun recognising the cryptocurrency and blockchain ecosystem as an independent and growing global market. With countries like Malta already welcoming cryptocurrency projects with generous legal and tax frameworks, the international community may well witness a legislative ‘race’ to become the defacto home for the growing and potentially giant market.
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