Many crypto enthusiasts have been taken aback by the hostile evnironment currently permeating throughout the market, and South Korean lawmakers are already taking action on it. The chief policymaker of the People Power Party (PPP) of South Korea announced that the government would be working on new crypto laws to be be put in motion as soon as possible.
Korean banks will need to classify crypto exchange clients as ‘high risk’ . A further tightening of cryptocurrency regulation in South Korea is underway, with new rules for banks and crypto exchange operators.— William (@jiangli11295332) June 14, 2022
South Korean Authorities Seek to Regain Control
The utter collapse of Terra (LUNA) caused widespread panic in South Korea’s crypto community, for which Do Kwon now finds himself faced with several counts of money laundering, tax evasion and embezzlement within his company. However, South Korean authorities fear that this will not be the end of the matter, and are concerned that investors are bound to suffer heavier losses if a stricter policy on blockchain-related companies is not implemented soon.
The freshly elected President of South Korea Yoon Suk-Yeol had been expected to ease the intensity of crypto taxes, but in light of the recent, local crypto disaster, it now seems that his party, the PPP, has taken a firm stance on the opposite side.
Emergency Meeting Held on Monday to Discuss Virtual Assets
A meeting at the National Assembly of South Korea was held this Monday, June 13th. On the matters discussed, Lee Bok-hyun, the chairman of Financial Supervisory Advice, said: “Considering the crypto market’s complexity and unpredictable environment, setting a voluntary regulatory system through the active participation of private experts needs to be emphasized”.
With demand for better crypto regulations growing among the public and businesses in Korea alike, CEOs of the 5 most established South Korean cryptocurrency exchanges have agreed to collaborate to find a solution, having formed a consensus that a new administrative body was needed to oversee the sector. Some of the essential changes that the South Korean government is working on together with these exchanges are:
- Setting a clear standard for the listing and delisting of cryptocurrencies.
- Strict policy for conducting more frequent risk assessments.
- Disclosure of findings from such reports to the government.
55 Trillion Won in Question
The Republic of South Korea, as a notable hub of innovation, possesses a large portion of the crypto market cap. According to the Financial Services Commission, the total size of the country’s market capitalization is 55.2 trillion won (or $43 billion USD). To conclude, with over 11 million won being moved in transactions every day, it is becoming exceedingly important for policymakers to introduce a sense of clarity to the crypto game.