South Korea’s financial officials have finalized the draft categorizing cryptocurrency exchanges in a new industry called “Crypto assets Exchange and Brokerage”. The new draft also states that Blockchains such as Ethereum will be classified as “Blockchain based software supply and development business”.
What does this mean?
We’ve been seeing a lot of countries slowly legalizing cryptocurrencies and ICO projects. South Korea is a huge market for the crypto and blockchain space. It’s been drawing a lot of attention, so it’s a big move for the country.
But this isn’t it. There are still a lot of things that needs to be implemented in order for this legalization to go through.
Exchanges operating out of South Korea will now be regulated as banks, enforcing strict strong KYC (know your customer) and AML (anti-money laundering policy).
All of these policies will be placed shortly.
What about current cryptocurrency exchanges in Korea?
Current South Korean exchanges such as BitThumb, would now require to completely overhaul their business processes to comply with the new law. Moreover, new exchanges will have to obtain a necessary approval from the countries cybersecurity and financial authority.
I thought the government initially wanted to ban ICOs and cryptocurrencies in South Korea?
Yep, that was the case a while back. Just like with a lot of other countries, the government didn’t understand the cryptocurrency space and wanted to play it safe.
But due to a huge backlash from the local community, President Moon Jae-in announced that no such ban would take place.
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