Barely three months of announcing they would end anonymous crypto trading, South Korea now has new rules on cryptocurrency trading. They took effect yesterday according to a Financial Services Commission official speaking to CNBC.
However, Bithumb said the new regulations did not affect trading. An official told CNBC that “nothing has changed regarding coin transaction” following the rules. The new rules could help to settle markets after a series of confusion about the future of cryptocurrency markets in the country. The difficulty was by various announcements by different officials from the government to the extent some saying cryptocurrency would be ban. They are also positive on a long-term basis according to Julian Hosp, co-founder, and president of the cryptocurrency start-up TenX.
“If afterward, investors and companies have more legal security working in the ecosystem. It’s going to have some short-term downsides, but long term, it’s going to have a big boost”.
The regulator said the intention was to prevent the use of cryptocurrencies in illegal activities, such as crimes, money laundering, and tax evasion.
For instance, South Korea markets have experienced some hacking claims blamed on North Korea. An example is Youbit, which had to close down in December after two incidences of hacking that wiped 17 percent of its total assets. In December, police unearthed a Ponzi scheme involving MiningMax and the bitcoin exchange BitKRX valued for US$200 million.
FSC said on January 23 that they would start allowing only real-name bank accounts to trade in cryptocurrency starting yesterday. The new regulations require banks to use KYC AML which are know your customer and anti-money laundering obligations.
Although Korean market does not dominate total Bitcoin or cryptocurrency markets. Since commotion in the market before the new rules caused it to lose its 20 percent Bitcoin market share. It is yet to be seen if the new reorganization will restore that.