South Korea Considers Adopting Crypto Exchange Licensing System Like NY’s BitLicense
South Korea considers adopting a system based on New York’s BitLicense where crypto exchanges would receive government licenses to operate.
BusinessKorea writes that it is unlikely any final decision will be made until after the June 2018 elections in the country. A government official spoke to them about the option as part of a virtual currency taskforce:
“We are positively considering the adoption of an exchange approval system as the additional regulation on cryptocurrencies. We are most likely [to] benchmark the model [against that] of the State of New York that gives a selective permission.”
BitLicense is a license to operate a virtual currency exchange given by the New York State Department of Financial Services, put into operation in August 2015. Japan has a similar exchange license program, where its Financial Services Agency (FSA) approves licenses for crypto exchanges that have met a stringent set of requirements on everything from customer accounts to computer systems.
The consideration of an exchange approval system in South Korea comes as the crypto markets have become less “overheated”, according to BusinessKorea. The publication reports that the South Korean government sees the more stable prices of crypto, compared to the high and low swings of December and January, as a cooling off of speculation.
A different unnamed government official said:
“Some even say that the government should impose taxes instead of putting additional regulations if the market volatility remains same at the current level. We will hold a meeting to respond to [the] national petition related to digital currencies this month but we are highly likely to make up for the defects of existing measures only at the meeting.”
The petition the official is reffering to, which calls for less regulation on cryptocurrency in the country, received over 200,000 signatures from the South Korean public in Jan. 2018, demanding a government response.
South Korea has been all over the crypto news recently, since a misinterpreted rumor of a total crypto ban in the country caused the markets to fall sharply early this year. CoinMarketCap also removed South Korean exchanges from its listing in early January due to what it saw as an “extreme divergence in prices” from rest of the world’s crypto markets.
According to a study reported on by Cointelegraph, over a third of salaried Koreans hold around $5000 in crypto, while 80 percent of South Korean investors have made profits from crypto investments.