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Investors in the cryptocurrency market are following potential spot Bitcoin ETF approval news from the US, while legal regulations, especially after the bankruptcies in 2022, continue to be a hot topic. Accordingly, South Korea’s top financial regulator proposes changing the country’s credit finance laws to ban South Korean citizens from purchasing cryptocurrencies with credit cards.
Noteworthy Step in South Korea
The Financial Services Commission of South Korea, in a legislative announcement to the public on January 3, expressed concerns about illegal capital outflows and money laundering that could arise from South Korean citizens purchasing cryptocurrencies from foreign exchanges. FSC officials shared the following statements:
“Card payments on overseas crypto asset exchanges have raised concerns about illegal outflows of domestic funds abroad due to money laundering, speculation, and the promotion of speculative activities. Accordingly, the use of crypto assets for payment has been envisaged as prohibited.”
According to the local publication Yonhap, current laws allow local cryptocurrency exchanges to conduct transactions between crypto assets only through deposit and withdrawal accounts where the user’s identity can be verified, but these rules do not apply to foreign crypto exchanges.
The financial services regulator is now seeking public opinion on the proposal, which will run until February 13. The proposal, expected to undergo a review and resolution process, aims to be implemented in the first half of the year.
Cryptocurrency Regulation
Legal regulations concerning crypto assets continue to be a hot topic, especially in developed countries. Governments are not shying away from discussing and implementing strict rules due to fears of money laundering and the bankruptcy of crypto companies. The process that started with the Terra Luna bankruptcy and led to the bankruptcy of the US-based cryptocurrency exchange FTX, causing hundreds of thousands of users to suffer, has ignited the fuse for legal regulations.
Due to legal regulations, crypto companies have had to cease operations in many countries, including the US and the United Kingdom, but following this process, crypto companies that have completed their license applications have managed to regain the trust of their investors.
