South Korea Outlines Proposed Legislation for Cryptocurrency Exchanges

The South Korean Financial Services Commission is finalizing its proposals to regulate cryptocurrency exchanges. This follows an earlier “Bitcoin Regulation Act” submitted by lawmaker Park Yong-jin. Meanwhile, the prime minister is very concerned about the growth and risks of cryptocurrencies including bitcoin and has called for immediate action.

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Requirements for Crypto Exchanges

The South Korean Financial Services Commission (FSC) is finalizing proposed regulations for cryptocurrency exchanges. According to The Hankyoreh daily newspaper on Tuesday, the proposed regulations “would treat the operation of cryptocurrency exchanges (such as Bithumb, Coinone, and Korbit) as unauthorized fundraising.”

South Korea Outlines Proposed Legislation for Cryptocurrency ExchangesCurrently, cryptocurrency exchanges fall under the Act on Consumer Protection in Electronic Commerce Transactions. That means “they can be operated as an e-commerce website by anyone who registers as an online vendor,” the news outlet detailed. “While the FSC regards cryptocurrencies not as a financial instrument but as unauthorized fundraising, it recognizes that they are already being traded around the world,” the publication noted, adding that the Commission plans to allow the exchanges to operate under certain terms. An FSC official detailed:

Cryptocurrency exchanges will be required to maintain standards for consumer protection, such as having separate deposits for customers’ assets, and for increasing transparency, such as having a procedure for confirming customers’ identity. The authorities will also be empowered to prosecute exchanges that break these rules.

In August, Democratic Party lawmaker Park Yong-jin submitted a proposed revision to the Electronic Financial Transactions Act. He proposed that anyone entering into a digital currency business, including operating a cryptocurrency exchange, must obtain Read More Here