South Korea’s 6 Bills To Regulate Crypto Industry

Maja Mazur
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South Korea, after months of discussions and planning, finally issued 6 new bills concerning crypto assets to the National Assembly. The new law will help to protect cryptocurrency holders and increase the reliability and transparency of digital money transactions.

Plans into reality

South Korea is undoubtedly one of the biggest players in the crypto world. But surprisingly, even though the blockchain technology and cryptocurrencies are very popular there, there still haven’t been any important regulations concerning them. We’ve heard about plans to regulate crypto pretty much throughout the whole of 2018. Now, it seems like it’s finally happening.

6 bills to fix all problems

It turns out that South Korea has been working on these bills for a long time, but it has been kept a secret. Now we know that 6 bills were submitted to the National Assembly in the past months. They are basically six proposals, each one telling about a different crypto-related regulation. Even though they refer to distinctive areas, they will all help to increase the safety and protection in the crypto field. Their main collective goal is to deal with money laundering, market manipulation and other criminal acts.

What they are for?

The first bill is actually an amendment to the Electronic Financial Transactions Act introduced last year. It notices the need to create a new law for the new industry that are cryptocurrencies. It proposes a full definition of virtual currency and other crypto-related terms. The bill also includes new measures to help in protecting crypto holders.

The second bill proposes a virtual currency exchange system meant to ensure safety for cryptocurrency investors and entities. It will guarantee the freedom of business and protection of transactions. This bill concerns mostly virtual currency trading businesses and virtual currency management and assistance. It proposes the need of approval from the Financial Services Commission for starting every business of this kind.

The third bill proposes to regulate the transactions themselves. Similarly to the second one, it seeks to require solutions for protection measures. According to this bill, everyone running a crypto-related business needs to register with the FSC.

The fourth bill submitted to the National Assembly is the Act on the Reporting and Utilization of Specified Financial Transaction Information. It, among others, states the rules concerning data transfer in the crypto field.

The fifth bill proposes more amendments to the Electronic Financial Transactions Act we mentioned earlier. It requires for any crypto businesses that sell, buy, exchange, or manage cryptocurrencies to obtain approval from the FSC. It’s supposed to increase safety and transparency of all the transactions. Administrative security measures had to be taken to ensure that all cryptocurrency activities are completely legal and inspected.

The last, sixth bill is the Digital Asset Trade Promotion Act. The main purpose of it is to protect the rights of cryptocurrency holders and to expand the reliability of digital assets. It also states the need for development of the national economy and further exploration of the cryptocurrency technology.

Summary:
1st bill – definitions of cryptocurrency-related terms; protection for crypto holders

2nd bill – a virtual currency exchange system, requirement of the registration with FSC for trade-related businesses

3rd bill – transaction regulations, requirement of the registration with FSC for investors

4th bill – reporting and data transferring

5th bill – requirement of the registration with FSC for other businesses

6th bill – promotion of cryptocurrency technology

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