Experts say new South Korean crypto rules will create a monopolized market

Experts say new South Korean crypto rules will create a monopolized market

South Korea is heading into a new period for its crypto industry, with stringent new rules coming into effect on March 25 that will require all cryptocurrency businesses to comply with new crypto reporting regulations and registration rules.

As an article from the Korea Herald outlines, industry experts fear that the impact of the new measures — specifically, the incoming Specific Financial Transactions Act — will have damaging consequences for most domestic cryptocurrency firms. The act requires all virtual asset operators to seek official registration, for which they must show evidence that they are operating using real-name accounts at South Korean banks.

Our top trading bots

While this is intended to prevent financial crimes such as money laundering, the vast majority of smaller-scale crypto firms have reportedly thus far been unable to forge partnerships with local financial institutions. Koo Tae-eon, a layer specializing in tech firms, told the Herald:

“Since the promulgation of the law a year ago until now, so many crypto exchanges have tried to abide by the new law by getting real-name accounts from the local banks, but it didn‘t work. Even those that are equipped with an information security management system and have CEOs with no criminal records were not able to forge a partnership with banks.”

Koo added that the new law, which fails to differentiate between crypto firms of different types and sizes, risks pushing smaller firms "into a corner" and creating a market in which only the four largest exchanges are able to operate in a compliant manner. Out of over 100 local exchanges, this is exactly the number that have so far reportedly been able to secure the necessary bank accounts.

Kim Hyoung-joong, chair of the Korea Society of Fintech Blockchain and a professor at Korea University, has echoed other experts' concerns and urged Korean financial authorities to draft new guidelines that will take into account the fact that banks are loath to issue real-name accounts to many of these firms.

As reported, alongside the current swath of new compliance requirements for crypto firms, South Korea will also implement a new crypto tax rule in the future, due to effect in January 2022. The law will see capital gains taxes imposed on all crypto trading profits in excess of $2,300.

Read on about Cointelegraph
Ethereum price finally topped $3K, but data suggests a reversal is nowhere in sight
There is an old saying in traditional markets which is actually more like a trading rule. It goes: “when the trend is negative, one can only be neutral...
Terra's Anchor Protocol erases 'crypto winter' losses, ANC price rebounds 300% in a month
Anchor Protocol (ANC), the decentralized finance (DeFi) platform built on the Terra blockchain protocol, rebounded nearly 300% in over a month after bottoming...
Crypto community rallies with Ukraine as local NFT artists' works sell out
It appears that crypto enthusiasts worldwide are rallying in support of Ukrainians during the difficult times. According to reports, Bitcoin (BTC) donations...
Games will adopt blockchain in 2022 through esports and P2E models: Report
In the past, earning money through games was only possible by uploading gaming videos online, streaming game content and playing competitively through esports....
Exec at Composable Finance allegedly doxed as convicted fraudster Omar Zaki
Late Friday afternoon, decentralized finance, or DeFi, investigator @zachxbt published a series of tweets accusing fraudster Omar Zaki of hiding behind...
BTC price hits $38K as Bitcoin analysts focus on weekly close
Bitcoin (BTC) staged new retests of $38,000 resistance on Jan. 26 as optimism increased over a potential recovery to $40,000 and higher.BTC/USD 1-hour candle...
THORChain brings DeFi yields and swaps to DOGE
Cross-chain liquidity network THORChain has enabled support for Dogecoin (DOGE) — bringing a new suite of decentralized finance (DeFi) capabilities to the...
Regal to partner with Flexa to enable digital currency payments in theatres
On Tuesday morning, Regal, a movie operator of more than 500 locations and 7,000 screens in 42 states plus D.C., announced it would be partnering with digital...
India’s top payment firm Paytm reportedly considers Bitcoin services
Paytm, India's leading digital payments company, said Thursday that it would consider Bitcoin services if the country's regulatory framework for cryptocurrencies...
PayPal co-founder Peter Thiel says he ‘underinvested’ in Bitcoin
As Bitcoin (BTC) marked a new all-time high above $67,000, PayPal co-founder and billionaire venture capitalist Peter Thiel said he should have bought more...
How will DOJ’s new crypto enforcement team change the game for industry players, good and bad?
On Oct. 6, the United States Department of Justice, or DOJ, announced the creation of a specialized unit, the National Cryptocurrency Enforcement Team,...
SBF promotes efficiency of ‘misunderstood’ crypto derivatives
The chief executive of crypto derivatives exchange FTX, Sam Bankman-Fried (SBF), has argued that derivatives are vital for the efficiency of the digital...
Sotheby's auction sets new world record for $11.8M CryptoPunk sale
Luxury auction house Sotheby’s made waves on social media on Thursday following the sale of one rare CryptoPunk.In a tweet from Sotheby’s, the auction said...
Cointelegraph Consulting: DeFi hit by a tsunami of liquidations in May
The savage sell-off that took place in mid-May fueled volatility in markets and triggered liquidations among numerous decentralized finance protocols. Like...
Mass adoption of blockchain tech is possible, and education is the key
Blockchain technology is one of the most promising technologies of our times, and the core concept of it is really simple. Essentially, it is a public ledger...