South Korea’s Financial Services Commission (FSC) is planning to introduce regulations for Bitcoin and other digital currencies, as well as to lift the blanket ban on initial coin offerings (ICO) in the country. The plans were revealed by a senior agency official on Dec. 6, 2017.
In his statement at a public hearing of the National Assembly to tackle a proposed legislation for the creation of a legal framework on cryptocurrencies, FSC vice-chairman Kim Yong-beom confirmed the commission’s plan to regulate the local digital currency market in order to prevent illegal activities like money laundering and tax evasion.
He also claimed that the agency is closely monitoring the developments in the virtual currency trading markets and is prepared to impose tougher measures if required.
“The government doesn’t consider cryptocurrencies as money or financial products. We will regulate Bitcoins to curtail money laundering and tax dodging.”
ICO policy to allow professional investors only?
In his statement, Yong-beom claimed that the agency may also lift the complete ban on ICOs that was implemented in late September 2017. He also mentioned that they may allow only professional investors to participate in the new model of raising capital for startup companies.
He said that the everyday retail investors will not be allowed to take part in ICOs for startups and companies’ financing using virtual currencies.
“Bitcoin is complicated in its technology and investment method. So considering its risk and technology expertise, it is right for professional investors to do an ICO, not regular citizens who are not informed of its technology and complicity.”
Meanwhile, the South Korean government is currently implementing regulations for the Bitcoin exchanges in its jurisdiction. Under the new rules, exchanges are required to comply with several consumer protection standards, as well as know-your-customer (KYC) norms in order to be allowed to operate in the country.