South Korea to regulate and legalize Bitcoin

posted 12 months ago
A set of bills to give cryptocurrencies, including bitcoin and ethereum, legal grounds is being prepared by a South Korean lawmaker.

Rep. Park Yong-jin of the ruling Democratic Party of Korea said in a release Monday he would introduce three revisions in July to build a set of regulatory frameworks for digital currencies.

Under the bill that aims to revise the Electronic Financial Transactions Act, traders, brokers, or other business entities involved in cryptocurrency transactions would be required to get regulatory approval from the Financial Services Commission. The requirements include the retention of capital of at least 500 million won ($436,300) and data processing facilities.

Also, revisions to the laws on income tax and corporate tax would allow financial authorities to tackle tax evasion from the digital currency transactions.

In the proposal, Park cited the need to address “the void of a state-led protection that guarantees digital currency’s value,” “digital currency’s nonexchangablilty to other existing currencies” and “the possibility of wreaking havoc on national economy from digital currency bubble burst.”

Experts hailed the move, which came in line with Tokyo’s fresh set of bitcoin regulation introduced in May. Putting digital currency under state control is translated into “removed uncertainties” and “boosted transparency,” said Kim Kyung-hwan, head attorney of law firm Minwho.

“User protection, tax evasion and money laundering have long been issues in terms of digital currency transaction,” Kim told The Korea Herald. “Digital currency traders have often found themselves in trouble, because they are out of a legal boundary.”

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