Under pressure from the G20, South Korea is forced to soften its strict policy regarding the cryptocurrency market in general and ICOs in particular.
The Directive of the participating countries G20 called for Global regulation of the cryptocurrency market and the creation of uniform “unified rules” by July of this year.
Following these recommendations, South Korea plans to allow crypto exchanges to receive status of “digital asset brokers” and regulate their activities similar to traditional financial institutions. Such regulation is entrusted to the Korea Financial Intelligence Unit (KFIU) in cooperation with other local regulators. Thanks to this development of events and the application of KYC procedures, the cryptocurrency industry has a chance to gain legal status as a legal form of investment.
Regulators did not stop there, and the Financial Services Commission (FSC) of South Korea will begin to review the general principles of crypto regulation in the country. The Financial Supervisory Service (FSS) subordinate to it also confirmed that it does not interfere with the development of the crypto industry in the country. In addition, the department is confident that the country should pay more attention to the development and implementation of blockchain technologies.
In support of the chosen course for the recognition of cryptocurrency in the country, the National Assembly of South Korea has already developed a plan that includes a number of measures to legalize ICOs. It is possible that the previously introduced complete ban will be lifted in the near future.
In addition, presumably, the South Korean crypto market will be highlighted as a separate sector of the economy, and cryptocurrency market participants will be considered as financial institutions.
Despite such positive changes, the FSC and FSS regulators noted that their position in no way runs counter to the official opinion of the government. Both departments do not classify crypto-assets as traditional financial products and note their increased speculative nature. Therefore, the process of regulating the cryptocurrency industry in the country requires both coordination of national departmental positions and international cooperation.
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