South Korea Crypto Stakeholders Kick Against Bill Proposing To Identify Cryptocurrency Issuers

Bill to Specify Crypto Issuers

A public hearing held by the Public Affairs Committee of the South Korean National Assembly on Tuesday (November 16, 2021), had in attendance among others, stakeholders from the crypto industry, who criticized a series of cryptocurrency-related bills.

A proposal put forward by Kim Byung-wook, a lawmaker from the Democratic Party called the “Virtual Asset Industry Development and User Protection Act” calls for a background check on crypto issuers, number of employees, business status, and business location.

However, what is interesting about the bill is that it tries to identify issuers of crypto tokens, even the ones like Bitcoin. However, while many cryptocurrencies have issuers behind them, no central issuer exists for Bitcoin, which could be difficult if the bill becomes law.

Also, Rep. Yoon Chang-hyeon of the People’s Power also proposed the “Virtual Currency Industry Framework Act” back in October. According to Chang-hyeon at the time:

“The bill is not focused on either support or regulation, but to harmonize support for the development of related industries and regulations for market soundness […] The focus was on industry promotion, establishment of trading order in cryptocurrency, and business regulation for consumer protection.”

Meanwhile, if the bill proposed by Byung-wook is enacted, cryptocurrency transactions could be suspended in South Korea. An advisor of the Blockchain Development Forum of the Financial Supervisory Service, Choi Hwa-in, opined that “If the existing financial regulations are applied, the technical applicability will be severely limited.”

Also commenting on the matter of identifying cryptocurrency issuers was Yoon Jong-su, an attorney present at the public hearing. According to Jong-su, with crypto becoming more popular and seeing growing adoption, it would be harder to get the issuer of a crypto asset.

South Korea’s Crypto Policies Pose Issues Local Ooerators

The latest development is a long list of cryptocurrency regulations in South Korea. Crypto businesses operating in the country have groaned under the government’s strict policies that make operations difficult.

In June, the country’s regulatory body, the Financial Services Commission (FSC), announced that it was planning to ban cross-trading on exchanges in South Korea, a development that could adversely affect businesses operating in the country.

Earlier, the FSC directed local crypto exchanges to utilize real-name accounts before September 24, 2021. Even foreign exchange platform who used the Korean won were not exempted from the rule.

Few days before the September 24 deadline, it was reported that only 20 out of 60 crypto exchanges in South Korea managed to fulfil a part for the FSC’s requirements, meaning that 40 operators could be affected after the deadline.

Also, investors who use these small exchanges could suffer huge losses, with the figure put at over three trillion won ($2.5 billion).

The South Korean government is preparing to impose a 20% tax on cryptocurrency gains by January 2022. However, some lawmakers of the country’s opposition party have put out a proposal to postpone the tax policy till 2023.

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