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South Korea moves forward with providing legal basis for cryptocurrencies

By Yana Berman

National Assembly’s national policy committee passes crypto bill

South Korean National Assembly’s national policy committee has passed a bill that will legalise the use of cryptocurrencies within the country and provide regulatory clarity to the local markets.

According to local newspaper JoongAng Daily, the bill awaits the approval from the National Assembly’s judiciary committee. If it passes, it will be effective starting 2020.

The bill classifies cryptocurrencies as digital assets and obliges all crypto businesses to apply for registration via the Financial Services Commission’s (FSC) Financial Intelligence Unit. If a company complies with the necessary requirements, it will be granted an Information Security Management System certificate from the state Korea Internet and Security Agency.

Moreover, crypto companies operating in South Korea will have to monitor their transactions to comply with the strict anti-money laundering policies to prevent illicit activities. The bill includes fines for the exchanges and other firms that will not be able to trace crypto transfers.

The FSC hopes that the move will make crypto markets in the country more transparent and attractive for investors.

South Korea is home to major crypto exchanges, such as Upbeat, Bithumb, Coinone, Korbit, and others. Anonymous trading is prohibited in South Korea since 2018.

In an attempt to regulate crypto transfers in the country, the FSC had previously published AML guidelines for virtual currencies.

FURTHER READING: EU rethinks its approach to regulating stablecoins

FURTHER READING: South Korea's third-quarter growth slips

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