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Bitcoin Buyer Protection Takes Priority in Korea for Digital Currency Bill

Last Updated March 4, 2021 4:58 PM
Samburaj Das
Last Updated March 4, 2021 4:58 PM

Discussions toward a new set of bills pushing to regulate and legalize cryptocurrencies like Bitcoin and Ethereum are underway in South Korea.

At a public hearing today, South Korean officials and lawmakers convened at the National Assembly Library in Seoul to collect and discuss opinions ahead of the proposed revision of the Electronic Financial Transactions Act that will include digital currencies under its purview.

As CCN.com reported two weeks ago, Korean politician Park Yong-jin, a member of the country’s ruling Democratic Party, proposed three revisions to the law to mandate regulatory oversight over cryptocurrency transactions. Park presided over today’s meeting – consisting of lawmakers, a regulator from the Financial Services Commission, academics and more as a part of seven panelists.

Korea is among the world’s largest bitcoin trading markets, a fact not lost among authorities.  As quoted by the Korea Herald , Park stated:

Without a legal framework, we can neither regulate, nurture, nor support the cryptocurrency-related industries. Also, the legal vacuum prevents those who committed virtual currency-related crimes from being punished.

The lack of a legal basis or framework, Park added, hampers efforts toward protection for investors and traders. The discussion toward buyer protection comes at a time when a number of users of South Korea’s biggest bitcoin exchange Bithumb suffered losses due to a data breach earlier this year.

The public meeting, which courted opinions openly, also raised talk of bitcoin and digital currencies as legal and recognized methods of payment, similar to Japan’s embrace of digital currencies.

Jung Sun-seop, a professor of law at Seoul National University opined that any revision of laws should reflect digital currencies as a legal method of payment. As quoted by regional news outlet News1 Korea, the professor, who is also the director at the Center for Financial Law, added:

Virtual currency is a positive technology in terms of innovative technology and creation of new business opportunities. This has also led to the emergence of a new method of payment, via virtual currency.

The report further reveals that the seven panelists had ‘mixed reactions’ about deeming digital currencies as currencies or assets, the latter which would bring tax impositions.

Lee Dae-ki, a researcher at the Korea Institute of Finance opined that the government should collect tax from adopters, stating they “rarely obtain bitcoins or ethereums to use them for payment.”

Notably, today’s public hearing has also revealed that the Electronic Financial Transactions Law is the only law to be revised. Income and corporate tax laws will remain untouched, hinting toward the lack of any priority to tax digital currency adopters.

Park also confirmed plans to incorporate opinions during the public hearing before the amended bill of the law is presented later this month.

Featured image from Park Yong-jin  via Korea Herald.