South Korea Softens on Cryptocurrency Tradings “If Normal Transactions are Made”

It seems that South Korea is starting to slightly change it’s opinion on cryptocurrency trading.

The governor of the Financial Supervisory Service, Choe Heung-sik, said the government “will support cryptocurrency trading if normal transactions are made,” and added that the government will “encourage” banks to work with cryptocurrency exchanges. The remarks by Heung-sik, were seen as being in a very much of a contrast to the government’s previous stance that it could consider shutting down local virtual currency exchanges.

Just for reminder, after the news broke that South Korea might “ban or suppress” cryptocurrency trading, prices of cryptocurrencies including bitcoin dropped hard. At the end of last month they also banned anonymous bank accounts being used to buy and sell cryptocurrencies. This measures are said to be designed to prevent children and criminals from trading Bitcoin in a country that has embraced the digital currency amid its rapidly-ascending price. Investor enthusiasm in South Korea was one of the reasons prices soared so high in 2017. That concerned Prime Minister Lee Nak-yon, who warned late last year that rising interest in cryptocurrencies could “lead to some serious distorted or pathological phenomenon.”

South Korea has since revealed that they are thinking of adopting a system similar to New York’s “BitLicense” for the regulation of cryptocurrency exchanges.

Currently, local banks have been reportedly reluctant to open virtual accounts for cryptocurrency trading amid the government’s crackdown.

Despite a boom in cryptocurrency transactions, the exchanges go largely unregulated in South Korea as they are not recognized as financial products, and the country doesn’t have rules for protecting virtual currency investors.

Bitcoin prices have also surged much higher in South Korea than other parts of the world. Often, the price of bitcoin traded more than 50% higher in South Korea, phenomenon that traders called the “kimchi premium.”

After this announcement, something else happened, even though, it is not directly related to new situation. Jung Ki-joon, head of economic policy coordination at the Office for Government Policy Coordination, was found dead at his home in Seoul on Sunday. Police presumed Jung suffered a heart attack while sleeping and were awaiting details from the coroner’s office. The deceased official was in charge of integrating opinions of different ministries and offices for meetings headed by Hong Nam-ki, minister of the Office for Government Policy Coordination. He was also developing policy measures against cryptocurrency speculation .

Teuta Franjkovic

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