South Korea on the Road to Regulated Mainstream Crypto
The days of “Korea FUD” in the cryptoverse may finally be coming to a close. In light of recent reports South Korea has been moving towards a more welcoming and regulated approach to crypto, local Korean news outlet BChain (English) has released detailed information on the government’s upcoming plans for the industry.
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Certainty Is Nigh
According to the report, progress has been made on how precisely the South Korean government plans to compartmentalize and regulate the industry. Last month, the Ministries of Strategy and Finance, Science and Technology, and Information and Communication came together to discuss how to properly classify the various sectors of the cryptocurrency and blockchain industries. Their reported plan is to break down the industry into three categories, with ten total subcategories.
A rough translation, courtesy of Google, is as follows:
KIST Detailed Industry Classification System
Software Development and Suppliers
- Wired Online Gaming Software
- Mobile Gaming Software
- Systems Software
- Applications Software
System Integration and Management Industry
- Computer Programming Services
- Computer Systems Integration
- Consulting and Construction
- Hosting Services
- Encrypted Assets
- Other Information Services
Officials plan to roll out more precise details and plans of action before the end of July.
A Large, Sweeping Effort
The government agencies involved in this regulatory overhaul reportedly consulted with 43 government ministries and over 160 institutions to make the most optimal decisions for Korea’s economy. This is in stark contrast to how regulatory action unfolded with the Reserve Bank of India, whom admittedly did no research when deciding to outlaw all bank dealings with cryptocurrency exchanges
Recent hacks of major South Korean exchanges reportedly sped up the process of implementing guidelines and regulations for the industry. Coinrail and Bithumb were both hacked for upwards of $70 million USD last June. Korea’s largest exchange, Upbit, was raided in May among allegations of fraud, though the investigation concluded no wrongdoing occurred. This development also comes in the wake of news reported on June 21st that Korea’s Ministry of Science and ICT invested 230 billion Won, or 206 million USD, into blockchain technology. Their plans are far-reaching and could impact the operations of several national industries in the years to come:
“The Ministry is currently pushing ahead with six blockchain pilot projects: ‘management of livestock records,’ ‘personal customs clearance,’ ‘easy real estate,’ ‘online voting,’ ‘electronic document distributions between countries,’ and ‘marine logistics.'”
South Korea has not yet officially stated they recognize cryptocurrency as money, but nevertheless exchanges will become regulated in the same manner as banks, with Know Your Customer (KYC) laws being strictly enforced.
South Korea’s position on crypto appears to have come full circle from earlier this year. It was first reported in January 2018 they were considering a total ban on virtual currencies. Though that news was reported to be false, the industry was facing resistance from the Financial Services Commission (FSC), originally preferring to keep cryptocurrency out of the public sector. Legal efforts to address the regulation of cryptocurrency have been in the works since July 2017, and South Korea now appears ready to more wholly embrace crypto and blockchain technology.
What’s your take? Should other nations follow South Korea’s lead in tackling crypto regulations head on? Let us know what you think in the comments below.
Image via BChain, Pixabay