South Korea tightens regulation on Bitcoin trading, exchanges will face on-site inspections

South Korea is pushing for structural reforms following a meeting hosted by the International Monetary Fund (IMF), which includes strengthening regulation and supervision of digital currency transactions such as Bitcoin.

South Korea is promoting structural reforms

According to Sedaily, the International Monetary Fund (IMF) has called on major countries, including South Korea, to improve labor productivity and reform regulatory policies. This issue was mentioned at the 36th meeting of the International Monetary and Financial Committee (IMFC) held in Washington on October 14.

The IMFC meeting is the highest-level meeting of the International Monetary Fund's member countries, and this meeting placed special emphasis on the regulation of fintech and digital currencies such as Bitcoin.

“As fintech and digital currencies gain traction, it is necessary to maintain a competitive financial market and establish a fair competition system to prevent the winner from taking over the entire market,” the IMFC meeting said.

South Korean Deputy Prime Minister and Finance Minister Kim Dong-yeon attended the meeting and said: "To achieve economic growth, we must advance structural reforms," ​​and foreign media Seoul Sunday also quoted him as saying on Friday:

"We will strengthen the management and supervision of virtual currencies such as Bitcoin."

Kim added: "Virtual currency is a new field, but we are worried about investment losses due to the lack of regulation. I will see if there is anything we can do."

Supervision in progress

Kim revealed on Friday that he will actively review the role of virtual currencies such as Bitcoin.

The South Korean government has been discussing how to regulate cryptocurrencies in the country. In July, the South Korean authorities set up a working group to determine the regulatory framework for Bitcoin. However, there are still many legal questions about how to define cryptocurrencies (whether they are currencies, assets or securities).

In September, Cha Hyun Kim, head of the payment and settlement system department at the Bank of Korea, said that “virtual currencies are not currencies or financial products,” noting:

“Virtual currency traders report to the Fair Trade Commission and the government as e-commerce traders, when in reality, Bitcoin is traded as a commodity. The Financial Services Commission (FSC) has announced its approach to digital currencies such as Bitcoin and Ethereum, such as requiring banks to step up verification processes and report any suspicious transactions. Shortly after the FSC’s announcement, the Ministry of Science and Technology, the Ministry of ICT, and the Korea Communications Commission announced that they would conduct on-site inspections of cryptocurrency service providers, including Bitcoin exchanges.”

In addition, South Korea is also tightening its tax regulations on digital currencies. Last week, Han Seung-hee, director of the South Korean Tax Service, told lawmakers that authorities are discussing how to best tax cryptocurrencies, including capital gains tax, gift tax, etc. In addition, at the end of September, the Financial Services Commission (FSC) also banned all ICOs in South Korea.

What do you think?