On Thursday, a crucial digital currency-related bill was passed. The National Assembly of South Korea‘s legislation and judiciary committee has officially legalized crypto in the country and was labeled as Special Financial Information Law.
The legislation was delayed multiple times until finally being passed. Now companies can finally provide South Korean citizens their crypto-related services.
However, any exchanges that operate in the country will now need to implement additional provisions. Specifically:
FATF – Financial Action Task Force
AML – Anti-Money Laundering
CTF – Counter-Terror Financing
Furthermore, the legislation makes it mandatory for the exchanges to receive approval from the Financial Services Commission (FSC) and the Korea Internet and Security Agency (KISA) before being able to offer their services to South Korean citizens.
Additionally, the Special Financial Information Law states that the digital asset exchanges will now need to obtain an Information Security Management System (ISMS) license from KISA if they wish to continue to offer their services.
When taking into consideration the millions that were lost through digital currencies as a result of hacking, it should come as no surprise for strict regulations to be put into place by the government to protect its people.
The added layer of strictness from South Korea will only truly harm the small exchanges that were hoping to ride the bullish bandwagon of cryptos, while the bigger firms should be otherwise fine.
Currently, there are only six exchanges that possess an ISMS license from KISA. These firms are Korbit, UpBit, Gopax, Coinone, Hanbitco, and Bithumb.
By legalizing cryptocurrencies in South Korea, Kim Seong-ah, the chairperson of the Blockchain Association of South Korea and the operator of Hanbitco, they’ve taken another big step towards the normalization of cryptos and innovation in currencies that will affect are our daily lives.