Finance Minister Kim Doong-yong said the government has no plans to close exchanges, refuting controversial comments from government officials in South Korea, the flagship cryptocurrency market, and reassuring investors.
“We have no intention of banning or suppressing the cryptocurrency market,” Mr. Kim said, adding that the government’s immediate task is only to regulate such trade.
Reaffirming Seoul’s intention to tighten control in a market that international policymakers consider opaque and risky, the country’s customs service previously announced that it had discovered about $600 million worth of illegal cryptocurrency trading.
“As part of the government’s mission, the service is closely examining foreign exchange trading using South Korea is seeking to regulate the market as many locals, including students and housewives, entered the market despite warnings of a bubble from governments around the world.
Seoul previously said it was considering shutting down local cryptocurrency exchanges that are causing market turmoil and affecting the price of bitcoin. Officials later clarified that an outright ban was just one step under consideration and a final decision had not yet been made.
As part of the regulation, South Korean customs discovered financial irregularities amounting to 637.5 billion won (US$596.02 million).
The official statement said that 472.3 billion worth of illegal trade accounted for the bulk of cryptocurrency crimes, but did not indicate what actions authorities were taking against violations.
In one case, an illegal currency exchange collected a total of 1.7 billion won (US$1.59 million) from local residents in the form of “electronic wallet” coins to transfer to an agent partner overseas. According to the statement, the partner agent then cashed it and distributed it to clients in the country.
In South Korea, only licensed banks and brokers can offer foreign exchange sales services. Local companies and residents who transfer more than $3,000 out of the country at one time must submit documents to the tax authorities explaining the reasons for the transfers. Annual transfers abroad of more than $50,000 must also be accompanied by similar documents.
Starting January 30, authorities introduced rules allowing only identifiable bank accounts to be used for cryptocurrency trading to prevent the use of virtual coins for money laundering and other crimes.
Among other violations, customs also found cases of investors in Japan sending 53.7 billion won worth of yen to their partners in South Korea for illegal currency trading.
Customs authorities say that will monitor for any violations of currency regulations or money laundering.
According to https://www.cnbc.com
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