Virtual asset rules to be clarified later this year
“The authorities are mulling over whether to incorporate virtual assets or cryptocurrency into the existing system or to gradually expand the scope or incorporation,” said Oh Hwa-se, planning & corporation director at the Korea Financial Intelligence Unit of Financial Services Commission during a seminar hosted by Join:D on July 10. Details are likely to be outlined after negotiations with the authorities at the Ministry of Justice, Ministry of Economy and Finance and Ministry of Science and ICT. Feedback will be offered once legislation to enforce the revision of the act on reporting and using specified financial transaction information is finalized after the summer. #Keeping the separation of cryptocurrency and blockchain The revision is more focused on regulations instead of fostering the growth of the industry. As for small and mid-sized companies, their survival is at risk due to the excessive regulatory threshold. Lee Jung-yup, Uijeongbu District Court Presiding Judge, said, “There’s a doubt over whether to make it easier for small and mid-sized companies to enter the [cryptocurrency business] by making exceptional clause for the revision.” But the authorities’ stance to separate virtual assets and blockchain remains unchanged. After banning initial coin offerings (ICO) in 2017, the government has been prohibiting cryptocurrency while fostering the blockchain industry. “There’s a strict standard for virtual assets,” said Oh. “The authorities are approaching it carefully. But as for blockchain technology, all sorts of support measures are being introduced as was done by the Presidential Committee on the Fourth Industrial Revolution last month.” #Will ICO business operators be able to receive operation permits? If the government’s key message remains the same, there’s a question over whether ICO business operators will be able to receive operation permits following the revision. “We can’t conclude that business licenses will be limited just because ICOs have been banned,” said Oh. “[The act on reporting and using specified financial transaction information] can’t be seen as an extension of the diverse authorities’ stance since 2017.” #Trust is essential Cryptocurrency industry are projected to see major and rapid changes after the revision on the act on reporting and using specified financial transaction information goes into effect. Cryptocurrency operators will be able to survive only if they meet the legal conditions. Some businesses that are deemed hopeless could plan to go bankrupt after securing as much money from clients as possible. “Activation of the market is based on trust,” said Oh. “Businesses at this point have to seriously ask themselves how much effort they can put into complying with the requirements, like the authentication of information security management system.