Unlike its Chinese neighbors that have since banned initial coin offerings (ICOs) and cryptocurrency trading, South Korea has taken a different path, implementing stringent laws to deter bad actors while encouraging innovation at the same time.
As first reported by Forbes on August 24, 2018, the nation is now looking to put in place measures that would further stimulate the growth of blockchain technology and cryptocurrencies.
Occupying the Blockchain Frontline
Home to some of the world’s top cryptocurrency exchanges, including Upbit and Bithumb, which have a combined 24-hour trading volume of more than $200 million, there is no denying the Asian giant is both crypto and DLT superpower even though the journey has not been entirely smooth.
After placing a blanket ban on crypto-based fundraisers also known as initial coin offerings (ICOs) last year, South Korean regulators went ahead to ban anonymous cryptocurrency trading earlier in January 2018, over fears of money laundering, tax evasion and other fraudulent acts by bad actors.
“A new entry into the virtual currency trading market will be blocked until the realization of the so-called ‘virtual money real name system’ that can confirm the identity of the account owner on the 20th of this month,” the government stated back in January. Korea’s Financial Services Commission (FSC) also mandated all blockchain-based virtual currency trading platforms to stop opening trading accounts for foreigners and minors.
Hacks and heist have become entirely synonymous with the cryptoverse, and the crypto-friendly nation has also had its fair share of the menace.
In June this year, Bithumb, currently the 19th largest cryptocurrency exchange in the world, lost a whopping $30 million worth of cryptoassets to hackers.
A New Dawn for Korean Blockchain and Cryptosphere
On March 14, 2018, reports emerged that South Korean regulators were considering a policy change that would make ICOs legal again.
“The financial authorities have been talking to the country’s tax agency, justice ministry and other relevant government offices about a plan to allow ICOs in Korea when certain conditions are met,” officials wrote at the time.
After every rain comes sunshine and presently, the regulatory uncertainties that nearly crippled the Korean cryptosphere has given way to a more vibrant ecosystem, as the region is gradually becoming a destination for blockchain enthusiast to meet.
Last July, Seoul was the venue for Korea Blockchain Week, an event that attracted more than 2,000 attendees globally.
Authorities are now ready to occupy the frontline in the cryptoverse. To make the task easier and faster, the FSC announced in July that it would create the Financial Innovation Bureau, a department that would focus on the nation’s DLT, Fintech, and cryptospace.
The government has also set aside $880 million for blockchain, AI, data and analytics developments.