South Korean regulators have banned Bitcoin future trading and other derivatives related to Bitcoin according to The Korea Herald.
The South Korean Financial Services Commission sent the order through the Korea Financial Investment Association (KOFIA) this week. It prompted eBest Investment & Securities and Shinhan Financial to cancel their seminars previously scheduled for December 14 and 15. The seminars were meant for Bitcoin futures investors.
According to Business Korea report, the Korean regulators will not recognize Bitcoin as a underlying asset of derivatives products’. Besides, restricts being listing for future trading.
The representative of Korea’s securities industry said authorities worried the situation could get out of control. Thus for not taking a position on cryptocurrencies yet.
“It is the first time for the South Korean authorities to ban trading a specific item. It seems that they made such [a] decision worrying about it if it gets out of control as they haven’t taken a position on cryptocurrency.”
South Korea banned ICOs on September and said they wanted to bring cryptocurrency trading under regulation including taxation.
An NTS official was quoted as saying,
“The basic principle is to tax the income. It is important to collect detailed history data like who made transactions and how in a bid to impose taxes. To this end, we are considering the improvement in systems”.
Indeed, the official said the government needed to specifically set up a detailed tax standard and an exchange registration system and identification system to prevent tax evasion.
Korea’s immediate neighbor in Japan already has a law that recognizes Bitcoin as legal mode of payment. Also futures contracts are a welcome product. Tokyo Financial Exchange that considers JPMorgan Chase as one of the trading participants now is heading towards listing Bitcoin futures contracts in 2018 once Financial Instruments and Exchange Act recognizes them as legal products .