South Korea is approaching a new era in the cryptocurrency industry, with strict new rules coming into force on March 25, requiring all cryptocurrency companies to comply with cryptocurrency reporting rules and new registration rules.
As explained in the Korea Herald article, industry experts fear that the impact of the new measures – especially the forthcoming Certified Financial Transactions Law – will have serious consequences for most domestic cryptocurrency companies. The law requires all virtual asset operators to apply for formal registration, which must prove that they operate genuine name accounts in South Korean banks.
While it aims to prevent financial crimes such as money laundering, the vast majority of small crypto companies have not yet partnered with local financial institutions. Ku Tae Young, a class specializing in technology companies, told the Herald:
“Since the law was passed a year ago and until now, many cryptocurrency exchanges have tried to comply with the new law by receiving accounts with real names in local banks, but they have failed. Even those who were equipped with an information security management system and had CEOs with no criminal history could not do so. From building partnerships with banks. ”
Kuo added that the new law, which does not differentiate between cryptocurrency firms of different types and sizes, risks driving small firms into a corner and creating a market where only four large exchanges can operate in an interoperable manner. Among more than 100 local stock exchanges, this is the exact number that has managed to secure the necessary bank accounts so far.
Kim Hyun Joon, president of the Korea Blockchain Technology Association and professor at Korea University, thanked other experts for their concerns and asked the Korean financial authorities to develop new rules to take into account the fact that banks are not willing to open registered accounts. many of these companies.
As mentioned, together with the current set of new requirements for cryptocurrency companies, South Korea will also introduce a new tax rule for cryptocurrencies in the future, which will enter into force in January 2022. The law will provide capital gains taxation for all cryptocurrencies. trading result. More than $ 2300.