South Korea is currently assessing its regulatory movements in the cryptocurrency market in order to strike a balance between encouraging innovation and providing proper consumer safety. The country had prohibited initial coin offerings from organizations operating in the industry. Nonetheless, it appears that regulation will be waived soon.
The Bank of Korea will soon permit crypto companies to issue new assets.
The development was first reported by a local news outlet on Monday. According to reports, South Korea’s central bank, the Bank of Korea (BOK), recently stated that the issuance of new digital assets in ICOs is a requirement for the country’s crypto economy. To safeguard customers from the scams linked with ICOs, the country outlawed them.
Furthermore, the BOK emphasized the importance of adequate industry oversight, particularly when it comes to stablecoins. This is reasonable given the recent pattern of depegging that has afflicted various stablecoins, beginning with Terra’s UST.
The BOK also stated that, despite the country’s ban on ICOs, recently minted digital coins continue to enter South Korea. Crypto firms accomplish this by issuing digital assets in other countries and then listing them on South Korean exchanges such as Bithumb.
South Korea is involved in cryptocurrency regulatory activities.
With the passage of South Korea’s Digital Assets Framework Act, this latest proposal will become law. The next regulatory step will also provide clarity on industrial legislation in South Korea. Millions of crypto investors live in the East Asian countries, emphasizing the importance of regulatory certainty.
Furthermore, South Korea is attempting to impose adequate consumer protection procedures on the industry. The recent Terra collapse, as well as the increasing number of scams and frauds, have necessitated this. South Korea recently stated that 75% of illegal FX transactions in the country will be crypto-related by 2022. The BOK did, however, state that they will take care not to hinder innovation when enforcing these regulations.
South Korean cryptocurrency investors have had a difficult time due to unfavorable tax laws. South Korean authorities are considering taxing crypto airdrops in addition to other crypto levies. The tariffs could range from 10% to 50% of the aidrop value.