S. Korea rolls out plans to curb craze for bitcoins

Dec 14, 2017, 09:00 am

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Hong Nam-ki, minister of the Office for Government Policy coordination, presides over a meeting on cryptocurrency Wednesday in Seoul./ Source: Yonhap News

By AsiaToday reporter Choi Tae-beom

The South Korean government has decided to set up strong regulations and strictly respond to illegal acts to curb speculation on cryptocurrencies with the de facto key cryptocurrency bitcoin having soared up to over 20 million won recently.

In particular, the government will form a task force composed of civilian experts and related organizations to review ways to impose taxes on investment returns.

Hong Nam-ki, minister of the Office for Government Policy coordination, presided a meeting with relevant government representatives to mainly discuss ways to impose strict measures against illegal acts using cryptocurrencies, prevent overheated speculation due to unreasonable entry of new investors, and establish regulations on cryptocurrency trading.

The government has established a pan-governmental task force on Dec. 4 to respond immediately and effectively to various cryptocurrency-related issues, such as bitcoin speculation and hacks.

The government announced emergency measures Wednesday to strengthen the crackdown and punishment on cryptocurrency-related crimes in its resolve to curb the country's bitcoin frenzy.

First, it plans to strictly control cryptocurrency-related crimes such as pyramid investing, deceptive selling, illegal trading, and concealment of criminal proceeds using cryptocurrencies.

The government also decided to thoroughly investigate the ongoing bitcoin exchange hacking case, Ethereum investment scandal, and new types of illegal bitcoin transactions while imposing harsh punishments against large-scale scams.

Cryptocurrency exchanges will go under regular inspections to check any violations of the Information and Communications Network Act, and temporary service suspension will be imposed on businesses that violate laws and regulations, such as leaking personal information.

The nation's exchange operators over a certain size, including Bithump, Coinone and Korbit, will be obliged to require ISMS certification starting next year.

Banks in Korea that provide virtual bank accounts for cryptocurrency trades will have to prohibit minors and non-residents (foreigners) from opening accounts. Local financial institutions will not be permitted to own cryptocurrency-related assets, acquire them or invest in stakes in companies with them in order to clamp down on speculative trading.

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