South Korea Targets Crypto Purchase Ban for Credit Cards

• South Korea is ramping up its crypto regulation.
• The South Korean SEC is focusing on regulating how its citizens purchase crypto. 
• Over the next few months, citizens, lawmakers, and regulators will determine if the proposal passes. 

South Korea has joined global efforts in regulating the crypto sector as the industry exponentially grows its user numbers. As part of its aspiration to emerge as a global hub for digital assets, the country has introduced a series of crypto-forward legislation throughout 2023. Its latest proposal now looks to address how its citizens buy cryptocurrencies.

South Korea Bans Crypto Purchases 

South Korea’s Financial Services Commission, equivalent to the US SEC, has proposed an amendment to its Credit Finance Act. To curb the “illegal outflow of domestic funds overseas,” the regulator looks to effectively ban South Korean citizens from buying crypto using credit cards. 

The South Korean SEC argued in its legislative notice that it aims to restrict crypto traders from buying assets on foreign crypto exchanges, especially amid mounting concerns about money laundering and promoting speculative behavior. 

Although the amendment is pending approval, it is anticipated to undergo review and a voting process, with plans for implementation in the first half of 2024. South Korean citizens have until February 13 to provide feedback on the proposal. 

On the Flipside

• South Korea’s FSC recently introduced a proposal mandating exchanges operating in the country to store at least 80% of users’ deposits in cold wallets.
• The US, South Korea, and Japan recently collaboratively stepped up their efforts to counter North Korea’s growing threat to the region, specifically targeting threats such as crypto money laundering. 

Why This Matters

South Korea is intensifying its commitment to protecting its citizens while ensuring crypto innovation does not halt. As digital assets increasingly attract illicit activities, it becomes crucial for the financial regulator to establish robust frameworks and strategies that not only safeguard investors but also foster industry growth.

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