On January 31, 2018, those speculating with bated breath over whether South Korea would follow through on a rumored ban of cryptocurrency trading may be letting out long sighs of relief with news that, according to the country’s finance minister, the government has no plans to enact a shutdown.
Finance Minister Kim Dong-yeon said that the government’s immediate concern is regulation when it comes to exchanges. «There is no intention to ban or suppress cryptocurrency,» said Kim. There has been some back and forth between state officials in South Korea. On January 30, KYC rules restricted approved cryptocurrency-related trading activities to that of «real name» bank accounts in an effort to curtail money laundering and tax evasion.
Earlier this month, statements from the Justice Ministry and Ministry of Strategy and Finance seemed to contradict one another. While an outright ban had been discussed among other options, implementing such restrictions had yet to be finalized as a course of action. For now, a ban appears to be off the table.
This fresh bit of information from Kim comes on the heels of an announcement that the South Korean Customs Service exposed 637.5 billion won, or $596.02 million, worth of illegal foreign trading in cryptocurrencies. According to the agency, «Customs service has been closely looking at illegal foreign exchange trading using cryptocurrency as part of the government’s task force.»
One of the cases reportedly identified by customs involves the transfer of 57.3 billion won, worth $50.5 million, from Japanese investors to partners in South Korea in an effort to skirt regulations. In another case, a foreign company that was operating illegally exchanged tokens with locals totaling 1.8 billion won, or $1.59 million, which was transferred abroad to a partner agent.
Current laws require that licensed residents and local businesses which transfer over $3,000 across the country’s borders must disclose certain information to tax authorities, including the reason for the transaction. In the same vein, any overseas transfers in excess of $50,000 on an annual basis also must be reported.
Also to note, CoinMarketCap has recently re-integrated South Korean exchanges into its global price data. There’s still a significant premium in the country’s markets.