Cryptocurrency fraud and crime is rife in South Korea. This year alone with have seen countless reports of fraud and hacks taking place within the country in instances that could have otherwise been stopped with adequate regulation. Now we know that South Korean authorities are working towards establishing regulations but honestly, they are taking their time.
If they wish to minimise any further damage to the name of the industry then the authorities need to act fast and get some regulations established in order to clean up crypto.
According to reports, the Financial Services Commission (FSC), the authority in Korea fighting for regulation, have spoken out against the government’s law makers in order to speed up the process establishing these regulations. According to Cryptovest, Hong Seong-ki, an official at the FSC has said:
“While crypto markets have seen rapid growth, such trading platforms don’t seem to be well-enough prepared in terms of security. We’re trying to legislate the most urgent and important things first, aiming for money-laundering prevention and investor protection. The bill should be passed as soon as possible.”
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Why is regulation important?
Now, some regulation could damage the industry, think prohibition for example. However, if we use Japan as an example, we are seeing tight regulations placed on exchanges that mean in turn, investors and traders are left in a safer position. South Korea don’t want to ruin the industry, nor do they want to ban cryptocurrencies so therefore, in order to reduce crime (crime that is obviously costing the authorities money) then they too need to focus on exchanges and wallets and ensure that they are handling data and assets in the safest and most secure way possible.
By ensuring the climate is safe, investors can trade with confidence which in turn will encourage the growth of the markets (due to enhanced trading volumes), so actually, not only will crypto regulations in South Korea benefit South Koreans, they will also benefit the wider crypto community.
With crime rife and many assets in danger, the authorities need to move quick to ensure that exchanges are doing the best they can to improve the industry. Tight regulations can in turn make crypto a more liberal space. Of course, investment is also risky, but the threat of hacks and scams is one less risk that we should all have to deal with.