Kim Yong-beom – the Vice-chairman of the Financial Services Commission (FSC), has vowed to place stringent regulations on the Korean Bitcoin ecosystem but hinted at a possible reversal of ICO ban in the country. Kim Yong-beom has stated that Korean authorities are trying to curtail money laundering and tax evasion; therefore Bitcoin and other cryptocurrencies needs to be put under strict regulations.
Recently, the FSC vice President spoke at a public hearing at the Korean National Assembly. The open conference was organized to deliberate on a bill calling for the establishment of a legal framework on Cryptocurrencies, as reported by Korea Herald.
The official further stated that the authorities are closely monitoring the operations of the cryptocurrencies trading markets to know if there will be a need for the FSC to come in with more stringent rules than what is currently in place.
It is pertinent to note that like China, the Financial Supervisory Service department of the FSC has placed a total ban on ICOs since September 2017. As hinted by the official, the authorities could backtrack on the ICO ban. As excerpted by CCN, Kim Yong-beom said thus: “The government doesn’t consider cryptocurrencies as money or financial products. We will regulate Bitcoin to curtail money laundering and tax dodging.” The vice chairman further reiterated that Bitcoin is like a Ponzi scheme since bitcoiners always have the belief of reselling their Bitcoin at a higher price in the future. Kim Yong-beom is not the only one who thinks Bitcoin is a Ponzi scheme in Korea. His views are also shared by Park Sang-ki, Korea’s Minister of Justice who is also the head of a newly launched government task-force in charge of formulating a legal framework for cryptocurrency transactions.
ICO May Become Restricted To Professional Investors Only
Kim Yong-beom has revealed that the total ban on ICOs in the country might be reviewed, to give professional investors who have adequate knowledge of the ICO ecosystem, a chance to participate in ICOs. He noted that it was essential to restrict everyday retail investors from participating in ICOs since there are inherent risks in ICOs. In Kim Yong-beam’s words, as excerpted on CCN:
Bitcoin is complicated in its technology and investment method. So considering its risk and technology expertise, it is right for professional investors to do an ICO, not regular citizens who are not informed of its technology and complicity.
At present, Korean authorities are working on regulations for Bitcoin exchanges. As part of the regulation, all exchanges must conduct proper KYC operations and put in place standard consumer protection frameworks.