After months of confusion regarding the status of cryptocurrencies in South Korea, the Financial Supervisory Service (FSS) governor, Choe Heung-sik, has finally announced that the country will not be turning away from cryptocurrencies.
Choe reportedly reassured cryptocurrency exchanges that South Korea would allow cryptocurrency transactions. However, the only condition that stands between the buyer and the seller is a ‘normal transaction’. It means that users must use their real names in future purchases, a rule that was passed this year in January. It is meant to prohibit illegal cryptocurrency activities and requires a user to connect their exchange platform to their personal bank, in order to verify their information.
South Korean banks have previously shown less flexibility in collaborating with cryptocurrency exchanges. One such exchange, Coinpia, even suspended trading because it couldn’t find a bank to partner up with. Choe clarified that the government will “encourage banks to make transactions with cryptocurrency exchanges”.
Cryptocurrency Regulations in South Korea
Until the first half of 2017, South Korea was known for supporting the crypto community. It became the largest exchange market for Ethereum and joined the ranks of successful exchange markets for trading Bitcoin in May 2017. But four months later, the Financial Services Commission of Seoul, South Korea’s capital, banned ICOs as well as ‘margin trading’ in cryptocurrencies. In January 2018, it was rumored that the Ministry of Justice was planning to put an end to cryptocurrencies by banning them completely. Although no such thing was confirmed, South Korea did ban anonymous trading by introducing the real-name cryptocurrency trading system.
The Wall Street Journal reported yesterday that one of South Korea’s government officials, Jung Ki-joon, who was responsible for coordinating activities related to cryptocurrency regulations, had passed away this Sunday. According to a spokesperson, “He died from some unknown cause. He passed away while he was sleeping and [his] heart [had] already stopped beating when he was found dead.” Fellow employees revealed that his death might have been related to his job, which had become stressful in the last few months.