The South Korean Ministry of Justice is reportedly planning to outlaw trading of all cryptocurrencies including bitcoin.
Citing an official from Korea’s Ministry of Justice, the Nikkei published a report with quotes from the ministry official suggesting a complete ban on all cryptocurrency trading in Korea, now firmly established as one of the world’s largest cryptocurrency trading markets. The draconic move, which is certain to meet opposition from other legislators including Korea’s finance ministry, is being considered in order to protect retail investors from potential scams, according to the official.
In clear statements on Monday, the report cites Choi Jin-seok – a prosecutor at the Justice Ministry in charge of cryptocurrency-related crimes, as stating:
We do not rule out an option that bans trading of [all] cryptocurrencies. We acknowledge many problems stemming from the trade and are studying how to control them.
The hardline ban, if enforced, will take after China’s precedent in carrying out crippling measures to effectively shutter its local bitcoin industry. Korea has already followed China’s cue in enforcing a complete ban on initial coin offering (ICO) fundraising, although regulators have since hinted at a softer regulatory approach that would reverse the ban.
The Justice Ministry’s plan “will almost certainly face opposition inside the government”, the report further added, pointing to multiple endeavors by Korean government ministries to regulate – in effect legalize – the tremendously popular cryptocurrency industry.
For instance, Korea’s National Tax Service – operating under the purview of the Ministry of Strategy and Finance – is drawing up a framework to enforce income taxes on cryptocurrencies. Earlier in July, Korean politician Park Yong-jin, a lawmaker and member of the ruling Democratic Party set out to draft multiple revisions to existing legislation to mandate regulations for cryptocurrencies, an effort that is firmly taking shape in the country.
The move to regulate the local bitcoin industry began with a promise to introduce regulations by the chief of Korea’s Financial Services Commission (FSC) – the country’s primary financial regulator – last year.
As reported by CCN, FSC chairman Yim Jong-yong said at the time:
The government will push for the systemization of digital currency on a full scale in tandem with a global trend in the U.S., Japan and other countries.
As to how the supposed ban on cryptocurrency trading could take place, the Nikkei report cites sources within Korea’s Justice Ministry claiming that “many prosecutors are leaning towards considering cryptocurrencies themselves a scam” as they aren’t backed by a monetary authority or a government. Such a classification would give the Justice Ministry the legal go-ahead to apply Korea’s criminal code and effectively ban cryptocurrency trading.
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