The Asian country is the third global market and every day more investors are betting on them. The government in its eagerness to avoid money laundering and speculation, requires that operations are not anonymous.
The South Korean government declined the initial intention of its justice minister to ban cryptocurrency operations, after fierce opposition from parliament and citizens. Although the intentions of prohibition disappeared, there is concern on the part of authorities and financial actors to avoid more illicit tributaries.
The craze for cryptocurrencies is getting very far
People from all socioeconomic sectors consider that virtual money represents a real opportunity to increase the value of their savings, a belief that spread so quickly that during 2017 the price of this type of currency increased considerably in relation to the appreciations of the money physical.
The upward effect of the value of cryptocurrencies in Korea is called by CNN as the “KimChi Premium” because it explains how thanks to the Korean contribution, its international value increased considerably in a matter of months. In Asian country the cost of the currency is greater than the rest of the world, for that reason thousands of Koreans have traveled to Hong Kong or Thailand in order to withdraw cash without customs limits and buy bitcoins at international prices, a situation that has been considered by the government as a tributary act.
This shows that unlike other countries, virtual currencies are not a game. In spite of the fact that for a society as highly technological as the Korean one, exchanges between money and virtual currency can be perceived as games of chance, merchants of all generations strive to learn about cryptocurrencies, their developments and exchange opportunities on the Bithumb platform. , one of the most important sites for Bitcoin exchange.
The actions of the Korean government to stop possible dangers
In early January 2018, Korean Justice Minister Park Sang-ki announced that his ministry was drafting a bill to completely close virtual currency exchanges. In an article published by Su-Hyun Lee and Raymon Zhong in Today magazine, they point out that among the reasons given, is the possibility that virtual operations are speculations. This idea was not fully supported by the president’s spokesman, Moon Jae-in, who like the finance minister said it is necessary for the other ministers to confirm their proposal.
In Parliament the answers have been varied, although the great majority said that a ban would not be approved quickly, because the obtaining of the majority of votes could take months, but also because a prohibition goes against the spirit of the country of being in tune with the new technologies and not generate obstacles in their development. This position is consistent with the feeling of citizenship that in a week collected 120 thousand signatures to express their position to the government.
Among the first steps taken is not to further finance the development of cryptocurrencies with public funds. In addition, the government announced that it will not prohibit operations, but it will establish procedures for transactions to be carried out by people with identity, in order to avoid the trade of anonymous cryptocurrencies that allow money laundering and speculation. In this way, the illegalization of anonymous practices would allow tax crimes to be avoided.
Such measures have caused fear in the population, because the government measures influenced the price and millions of people have exchanged money for cryptocurrencies. However, for the National Tax Service of South Korea, the problem lies not only in the lack of regulations on sites such as Bithumb or Coinone, but the betting sites that allow buying and selling virtual currencies using borrowed money.