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South Korean Financial Regulator Nominee Not On Board With Crypto

South Korean Financial Regulator Nominee Not On Board With Crypto

Financial Services Commission (FSC) nominee Koh Seung-beom has openly expressed his reservations against cryptocurrency while reiterating his commitment to curbing household debt. 

FSC Nominee Could Be New Hurdle In Crypto Boom

Koh Seung-beom, a Bank of Korea monetary policy board member, was named the chairman of the Financial Services Commission (FSC) earlier this month. In a meeting with journalists on Wednesday, he mentioned that it is challenging to recognize cryptocurrency as a financial asset in light of international trends. 

He said,

"I understand that the Group of 20, the International Monetary Fund, other international agencies, and a considerable number of experts find it difficult to see virtual currencies as a financial asset and think they could not function as a currency.”

With young South Korean investors banking heavily on crypto investments to build an impressive portfolio, Koh’s comments cement his commitment to controlling the country’s rising household debt. 

Ultimatum Deadline To Register Exchanges Approaches

The FSC has been tightening regulations on the crypto industry for a fair while now. The nomination of Koh Seung-beom as a board member further emphasizes the agency’s priority to assert more control over the industry. 

In April, the commission issued an ultimatum for all Korean crypto exchanges to register with the regulatory body to avoid being shut down. Later in July, the FSC expanded its regulatory purview by sending warnings to 27 foreign virtual-asset service providers. The statement went on to say that if crypto exchanges keep operating without registration, by a September deadline, operators could face prison sentences or severe fines.

S.Korea’s Turbulent Path With Crypto

Further reports rose, revealing that certain crypto exchanges in South Korea were at risk of being denied access to personal bank accounts on charges of having “too many coins” on their trading platforms. A risk assessment guideline drawn up by the Korea Federation of Banks classified certain exchanges that offer too many altcoins on their platform as high risk. 

Furthermore, the Act on Reporting and Using Specified Financial Transaction Information decreed that exchanges must associate with partner banks to issue crypto trading accounts. This amendment entrusts the responsibility of evaluating the risk and transparency quotient of these exchanges on the bank. 

Despite being a strong player in the 2017 crypto boom, South Korea’s recent relationship with cryptocurrency has been rife with regulatory hurdles. The financial watchdog put a stricter regulatory framework into place to curb the growth of money laundering and crypto fraud prevention. However, the tight regulations have made it harder for crypto exchanges to keep up to date with all the regulatory requirements. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.