South Korea’s relationship with cryptocurrency has been a bittersweet one. At one point, South Korea was a powerhouse when it comes to crypto trade. In July, the country accounts for about 14 percent of the global trade of bitcoin. As such, many believe that Korea was the new frontier for the mass adoption of cryptocurrencies
Then out of the blues came a blanket ban by the Korean government on Initial coin offerings (ICOs) in September 2017. This was a major blow to the burgeoning Korean crypto community. Further, the government went ahead to introduce stringent regulations on crypto trading activities.
Some of the rules on crypto trading include:
- A ban on anonymous trading on crypto exchanges
- Restrictions on the trading of cryptocurrencies by government officials and minors
- An introduction of harsh tax bills for crypto exchanges.
Consequently, the introduction of these rules cost South Korea its dominance in the crypto market. Additionally with a 20% share in the global bitcoin market.
South Korea Reviews Its Stance on Cryptocurrency and Blockchain
In May, a report revealed that South Korea will now consider Initial Coin Offerings and crypto exchanges as legal entities. Therefore, regulatory authorities will henceforth scrutinize the operations of crypto exchanges in the country.
This can be likely to the situation in Japan, where regulators are working extensively to set up standards for crypto exchanges. As such, Korean regulators might require crypto exchanges comply with strict security and anti-money laundering policies. This will ensure that crypto exchanges provide quality services to their users.
Cryptocurrency and Blockchain Booming in South Korea
The new classification ignites a chain reaction in South Korea’s crypto space. Now, crypto exchanges know that it is either they up their game or get tossed aside. As such, firms that show interest in doing business with crypto exchanges and blockchain start-ups assures their involvement with a regulated market.
It would seem that South Korea’s new approach to crypto-related policies was spurred by the realization that cryptocurrencies and blockchain will play vital roles in the economic growth of nations. Therefore, this development shows that South Korea is planning to be at the forefront of the next industrial revolution.
Consequently, this development has made the country an attractive location for major crypto firms like Binance. In addition, a report reveals that South Korea is receptive to the concept of a blockchain system for trading stocks. As such, it is only a matter of time before South Korea regains its dominance in the crypto space.
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