New Rules Introduced for Crypto Regulation in South Korea

South Korea is getting closer to cryptocurrency regulations, at least according to the Korea Times. 

The outlet reported on Wednesday (July 11), that lawmakers in the country are working to issue rules related to cryptocurrencies, initial coin offerings (ICOs) and blockchain.

According to the Korea Times, bills will be submitted during an “extraordinary session” that will take place from July 13 through to July 26.

Various members will submit their bills as it relates to the legal status of digital currencies as well as requirements needed for cryptocurrency exchanges. Participants include Rep. Park Yong-jin of the ruling Democratic Party of Korea, Chung Tae-ok of the main opposition Liberty Party Korea (LPK), and Rep. Choung Byoung-gug of the minor opposition Barun Mirae Party.

A policy debate on the security of cryptocurrency exchanges in South Korea will be hosted by Rep. Song Hee-kyung of the LPK on July 19, the Korea Times states, together with co-host the Korea Internet and Security Agency (KISA).

The upcoming debate is a likely result from the various cryptocurrency exchange hacks the country has faced in 2018. In mid-June, South Korean-based Coinrail announced it had been hacked with roughly 30 percent of its altcoins compromised, totaling a US$40 million loss.

In that same month, the country’s second-largest cryptocurrency exchange Bithumb was also hacked, which resulted in a US$31 million loss in digital currencies.

Overall, 2018 has been bustling year in South Korea in terms of where its government stands on cryptocurrencies and blockchain as a whole. In May, Business Korea reported the National Assembly made a proposal to bring back domestic initial coin offerings following an eight month ban.

Meanwhile on July 5 July it was reported by Yonhap that the Bank of Korea (BOK) indicated investments in cryptocurrencies does not pose a significant threat to the country’s financial market.

“The amount of crypto-asset investment is not really big, compared with other equity markets, and local financial institutions’ exposure to possible risks of digital assets is insignificant,” the BOK report was quoted as saying. “Against this backdrop, we expect crypto-assets to have a limited impact on the South Korean financial market.”

In terms of blockchain, another local news outlet also reported on July 5 that the country’s government is drafting new industry classification standards “that breaks down the blockchain related industry into 10 categories” that includes blockchain, Dapp development and password currency transaction.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.