Korean Authorities Admit to Postponing Cryptocurrency Regulation Because it Legitimizes Market
According to the authorities of South Korea, the government had taken the decision to postpone the cryptocurrency regulation due to the government’s fear of making the consumers believe that the crypto market is legitimized by the government.
What exactly does the Government feel about the Regulation?
About a week back, CCN had reported that the South Korean government along with its financial agencies like the KFIU (Korea Financial Intelligence Unit) have decided to regulate the cryptocurrency exchanges such as banks, with stricter policies.
On the 8th of June this report was further supported by the confirmation from Kim Geun-ik, who is the director of KFIU. This confirmation was announced at the Policy Advisory Council Meeting, wherein the government had agreed on the regulation in order to prevent hacking and other criminal activities of the crypto world.
“Under current regulations, there are clear limitations in preventing money laundering on crypto exchanges because the only way authorities can spot suspicious transactions is through banks. If the bill of lawmaker Jae Yoon-kyung from the Democratic Party of Korea passes, local authorities will be able to impose identical regulations on crypto exchanges that are implemented on commercial banks.” – KFIU spokesperson
Last year, in the month of September, National Assembly Committee’s member said that financial authorities had requested the South Korean Government for the regulation of crypto markets in order to protect the investors and avoid criminal activities.
“We are frustrated as well. We fully understand that the government is reluctant towards regulating the cryptocurrency market because it will inevitably lead investors to consider it as the government’s way of legitimizing the market. But, if the government leaves the cryptocurrency market unregulated, it is simply leaving it vulnerable to various issues.” – Park yong-jin (National Assembly Committee member)
What was the Cause behind this Regulation proposed by the South Korean Government?
Hani, which is one of the major mainstream media outlet in the whole of South Korea, had claimed in a report, saying that the Coinrail hack played a main role in convincing the South Korean government about the necessity of regulations.
Further investigates suspected about the fact that Coinrail initially was created with a budget of just $10,000 whereas in reality, it had a valuation of $24 million through another company called Tobesoft. Thus, it clearly deceived the investors.
Hence, due to all these suspicious acts with not just Coinrail but also with other hacks, gave way for the regulation of crypto exchanges by the government as legitimate financial institutes. Yet, the investors would perceive the crypto market as the legitimate financial market.