So, just a bit of a followup from last week’s news that a National Assembly subcommittee had finally passed proposed revisions to the Financial Transactions Reporting Act (FTRA) that would bring cryptocurrency into the institutional fold.
South Korea’s big four exchanges — Bithumb, Upbit, Corbit, and Coinone — are welcoming the development, calling it the first gate to institutionalizing the cryptocurrency industry. They also expressed hope that the move is a first step to improve the transparency of the cryptocurrency industry and protect users.
According to the Korean-language blockchain news site The Block Post, however, the Korean crypto space also believes the new regulations have endangered the survival of exchanges that have less thoroughly prepared.
In order for VASPs to get registered with the regulatory authorities, exchanges will need real-name bank accounts and ISMS certification. For exchanges barely scraping by, this will be difficult to do. And since the FATF guidelines call for neither real-name bank accounts nor ISMS certification, those exchanges have cause to feel aggrieved.
It’s for this reason, reports the Block Post, that attention is focusing on the executive ordinance, which will include the conditions for obtaining real-name bank accounts. The National Assembly and Financial Service Commission agreed to craft those conditions when the subcommittee passed the revisions last week. A recently assembled task force composed of lawmakers, associations and professors are reportedly working out the details of the ordinance.
There is concern, though, that if the ordinance sets lax conditions for getting real-name bank accounts, you might see a rush of conventional industries into the cryptocurrency exchange market.
An official from one major Korean exchange told the Block Post that if the issuance of real-name accounts — or refusal on the part of banks to issue said accounts, anyway — served to block new players from getting into the exchange market in the past, the soon-to-be-crafted ordinance would likely trigger an invasion of the exchange industry by major companies such as Naver and Kakao and even traditional financial companies, depending on how wide the ordinance opens the door. This, in turn, could lead to an exodus from the Korean market by smaller exchanges.
Some in the blockchain space are also calling for the crafting of a cryptocurrency industry promotion law that would help turn Korea into a leading country in the blockchain and cryptocurrency industries.
Also in the Korean blockchain space
(By Tim Alper, Cryptonews, Nov. 22)
The Ministry of Science and ICT will pump USD 383 into blockchain research projects over the next six years. The goal is to create a trustless blockchain-powered ecosystem that would enable a “data-driven economy.”
(By Lim Jeong-yeo, Korea Herald, Nov. 21)
LG CNS — the IT affiliate of Korea’s massive LG conglomerate — is partnering with Kakao’s blockchain subsidiary to build mutually compatible infrastructure. LG CNS launched the enterprise blockchain platform Monachain earlier this year.
(By Brian Newar, TheNews.asia, Nov. 18)
BOK Governor Lee Joo-yeol told bank officials recently that Korea’s central bank could lose public confidence if it ignores change. He also said monetary policy faces challenges in the face of economic changes brought about by AI, big data and blockchain, and that a failure to proactively respond to those changes could hurt the competitiveness of the BOK.
(By Heo Jun, The Block Post, Nov. 22)
Major Korean cryptocurrency exchange Bithumb has decided to delist three currencies: DACC, ROM and PST. Trading support will end on Dec. 6 while withdrawal support will end on Jan. 3. Other major exchanges are reportedly weeding their currency listings, too, before the government begins screening the boarses for registration.
