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South Korea Govt Will Support Cryptocurrency Transactions: Financial Regulator

Last Updated March 4, 2021 5:04 PM
Samburaj Das
Last Updated March 4, 2021 5:04 PM

The head of South Korea’s financial regulator and watchdog has now confirmed the government will support cryptocurrency trading while encouraging banks to facilitate transactions with exchanges, effectively killing any fears of a rumored ban.

In noteworthy remarks made today, South Korea’s Financial Supervisory Service (FSS) chief Choe Heung-sik said the government will back the cryptocurrency industry to develop in the country. Specifically, the official said the government will support “normal transactions” of cryptocurrencies, three weeks to the day after the government moved to curtail anonymous accounts trading in crypto markets in late January.

As reported by Korean publication Yonhap , Choe told representatives from cryptocurrency exchanges in a recent meeting that the government “will support [cryptocurrency trading] if normal transactions are made”, suggesting the government will encourage the growth of the industry under know-your-customer (KYC) transparency.

Korean regulators mandated the use of a real-name trading system from January 30 wherein cryptocurrency traders and investors are required to use their real names with their cryptocurrency exchange accounts or wallets and bank accounts, a move to put an end to the anonymous trading of cryptocurrencies. While anonymous account holders can continue to buy or sell cryptocurrencies using their holdings via virtual accounts, any new cryptocurrency purchases or withdrawals in fiat will require compliance with the new KYC rules.

Although a number of major banks began issuing new virtual bank accounts to cryptocurrency traders as a part of the real-name trading system, several local banks have reportedly been reluctant to follow suit with the government’s intervention trading last month.

To remedy the situation, Choe revealed the government will “encourage” banks to establish ties and engage in transactions with cryptocurrency exchanges.

Choe’s remarks today further cements a striking turnaround from a ban on cryptocurrency trading first proposed by Korea’s Justice Ministry. Instead, South Korea is reportedly considering its own approval system in granting licenses to cryptocurrency exchanges who play by regulatory rules and guidelines.

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