South Korean Officials Consider Revising Cryptocurrency Regulations

The South Korean government is considering to revise the current regulatory framework for cryptocurrencies.

In September 2017, South Korea’s Financial Services Commission (FSC) imposed a ban on all initial coin offering (ICO) related activities in the country, citing concerns about fraud as a means to ultimately protect investors. In January of this year, the FSC decided to continue the ICO ban after a survey found that firms conducting ICOs were following illegal practices to raise money from South Korean investors.

During the recent Deconomy conference in Seoul, the topic of crypto regulation has been discussed once again by top government officials. They reportedly called for the government to review its policies in order to facilitate the growth and maturity of the local crypto market.

Byung Bong Min, chairman of the National Assembly, said that its time to move on to the next phase of regulation which encourages growth and innovation since South Korean investors are now fairly informed on the dangers that come with investing in cryptocurrencies and blockchain.

“The government has strongly regulated cryptocurrencies and after a year, I think the public is now well protected against their dangers and I think it’s time to review the regulatory policy,” said Byung.

Song Hee-kyong, co-president of the 4th Industry Forum of the National Assembly, called for a more aggressive implementation of the regulatory sandbox policy.

“The government has misunderstood the virtual currency and tried to meet the real currency standards, so there are various problems,” said Byung. “The industry does not stand still while waiting for the regulatory sandbox authorization, so it is just like keeping it in the box.”

Jung Byung-kook, chairman of the Special Committee of the 4th Industry Forum of the National Assembly, said that the government was cautious in imposing new policies around cryptocurrencies as they feared that the policies would have a negative impact on the crypto market. However, he expects to see some changes occur in the near-term.

Ethereum co-founder Vitalik Buterin, who was also present at the conference, urged the South Korean government to deregulate the blockchain industry, claiming that the current laws are overly restrictive and inhibits innovation.

“Blockchain is a technology that can be run without cryptocurrencies, but there is no crypto without blockchain,” Buterin said. “Public blockchains rely heavily on cryptography. Therefore, cryptocurrencies are absolutely necessary.”

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