Attorney considers regulatory future of blockchain technology in Korea

“The amendment of the Act On Reporting And Using Specified Financial Transaction Information will reduce the regulatory risks entangled with cryptocurrency, which will lead to the expansion of the digital asset market and new businesses like Decentralized Finance (DeFi),” said Han Suh-hee, an attorney from Barun Law, on July 20 at a forum. Han discussed the laws on blockchain and business cases at the event held at the headquarters of the Korea Development Bank in Yeouido, western Seoul. “In 2019, IDC projected that the market size for blockchain will grow to $16 billion by 2023,” Han said, offering a positive outlook for the technology. Korea still doesn’t have formal regulation for blockchain. Still, blockchain-based services could be put to test with the so-called regulatory sandbox policy. The Financial Services Commission’s conditional approval for the operation of Kasa, a blockchain-based real estate investment platform, is one of the examples. The Ministry of SMEs and Startups has also designated Busan as a special district for blockchain where service is centered around marine logistics, tourism and public safety. The attorney shared her view on the prospects of cryptocurrency regulation. “In the past, the financial authorities took a heavy-handed approach toward cryptocurrency businesses,” she said, “But a change in the stance is inevitable.” “With reduced regulatory risks, major conglomerates and financial companies will be more active in entering blockchain businesses,” Han continued. “It appears that new areas of blockchain-related businesses will spring up, including in the real estate or artwork sectors and adoption of DeFi concept in the established financial institutes.” The event also acted as an avenue to demonstrate blockchain projects in Korea. Somesing, a blockchain-based music service startup, vowed to focus on the essence of the service instead of prioritizing tokens. “When people think of blockchain services, they come up with a service based on digital tokens,” said Kim Hee-bae, head of Somesing. “Somesing work towards advancing sound quality, which is the basic part of our service,” he said, adding that a recent contract with entertainment agency JYP has nothing to do with tokens. Asked whether the service could make a profit, Kim said it generates monthly revenue of 30 million won from its token and application, and its monthly activated users keep on increasing. Uppsala Security, a blockchain security start-up that came into the limelight following the so-called ‘Nth Room’ case, joined the pitching session. Patrick Kim, head of the security firm, said that the company will likely enjoy higher demand because of the increasing number of scams. The blockchain security market size sees an annual growth of 40 percent. “Uppsala Security incorporated existing cloud-based intelligence with blockchain to develop our own data analytics function. We can provide this to financial institutions.”

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