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It appears that Korean regulators are planning to implement strict regulations on Bitcoin and cryptocurrencies, in a bid to ‘curtail money laundering and tax dodging’.

Speaking at a National Assembly hearing, Kim Yong-beaom, the Vice Chairman of the Financial Services Commission shared how the government is monitoring the crypto market, and ‘will enforce’ strict policies if required:

“We are closely watching the recent developments in cryptocurrency trade. If needed, we will enforce more stringent measures.”

He went on to term Bitcoin ‘a Ponzi scheme’, and reiterated the government’s stance against recognizing cryptos as alternatives to money:

“The government doesn’t consider cryptocurrencies as money or financial products. We will regulate bitcoins to curtail money laundering and tax dodging.”

In September this year, we first saw China crackdown on ICOs and crypto exchanges, and that was followed by Korea’s decision to put a stop to initial coin offerings as well – a move that was understandably not very popular with local startups. 

ICOs have raised well over $3 billion this year, and have become, for many, a chance to get rich quick. Unfortunately, it’s not all that simple, and while some ICOs have been majorly successful (such as Ethereum), there are many more which have had disappointing results or outright vanished (Confido).

Since these ICOs operate outside the ambit of traditional regulations and licensing requirements, they pose greater risks, especially as the ‘gold rush’ mentality leads to irresponsible investing practices by unsuspecting users.

The same sentiments were echoed by Kim Yong-beaom, but he also seemed more open towards ICOs when it came to ‘professional investors’:

“Bitcoin is complicated in its technology and investment method. So considering its risk and technology expertise, it is right for professional investors to do an ICO, not regular citizens who are not informed of its technology and complicity.”

It remains to be seen how the Korean regulatory authorities accommodate ICOs in the future, but their stance against Bitcoin and cryptocurrencies might raise concerns among traders.