After suggesting earlier this month that the country could ban trading, South Korean finance minister Kim Dong-yeon on Wednesday said they have no intention to ban or suppress cryptocurrency trading. His comments are expected to help bring peace to an overheated market, fearing a total ban. It also comes just days after the country's financial watchdog formally banned anonymous cryptocurrency trading accounts, which took effect on January 30. If as a community we expect mass adoption, people need to be using their real names when investing, as if it were a stock on the NYSE (New York Stock Exchange).
These legal provisions should not be considered in a negative light as it allows cryptocurrency trading to commence by the time you are reading this article, in South Korea. Reuters reports that the officials did not announce what kind of penalties, if any, would be levied on those found to have engaged in illegal foreign currency exchanges via cryptocurrency.
Players in the industry see this as an additional contributing factor to the high price volatility experienced in the cryptocurrency market last week. Statements from the officials didn't sound reassuring to the investors, who started expecting an eventual ban on trading.
South Korean authorities are also concerned that cryptocurrencies will be used to facilitate crime.
Seoul will focus on tightening regulations on cryptocurrency trading. China's ban on cryptocurrency exchanges has achieved little other than to drive the market underground. Currently, bitcoin trade denominated in the Korean Won was approximately four percent, Japanese Yen 40 percent, and United States Dollar 30 percent.
The office of customs said that it will keep on monitoring the use of cryptocurrencies in cases like money laundering and illegal currency trading. If any user makes withdrawals of deposits that amount to more than KRW10 million within a day or KRW20 million in a week, the authorities will consider it a suspicious activity.
The exchanges may now have to work overtime for ensuring that all accounts are verified and that no large transactions take place without getting reported to the KoFUI.
South Korea's customs service has made it plain that authorities will continue to keep a watchful eye on money laundering activities and violations of foreign exchange rules, especially relating to cryptocurrency. The jury is still out.