“No illegal cryptocurrency transaction in the country,” South Korean officials announced on Monday after a detailed meeting about the volatility in the cryptocurrency market and the potential use of digital assets in money laundering.
According to the latest report published by the Korea Herald, the South Korean government is planning to introduce strict regulations to trace illegal cryptocurrency transactions in the country. South Korea’s Financial Services Commission (FSC), the top financial regulator in the country, has asked financial firms including cryptocurrency exchanges to enhance monitoring activities to identify the involvement of digital currencies in crimes.
In March 2021, the FSC announced that it is planning to impose a heavy penalty on cryptocurrency violations in the country. The commission also asked digital exchanges to report suspicious crypto transactions. In addition, South Korea is planning to introduce a crypto income tax rule later this year.
“Individuals should make careful decisions related to cryptocurrencies as crypto assets, which have no intrinsic value, are means of speculation rather than investment,” Gu Yoon-Cheol, Chief of the Office for Government Policy Coordination, said in an announcement on Monday.
The latest report from the Korea Herald mentioned that financial firms in the country are required to report suspicious transactions to the Korean Financial Intelligence Unit (KoFIU) within three days. KoFIU will conduct a joint investigation with the police and local tax authorities. Despite the uncertain regulatory environment, the cryptocurrency market is flourishing in South Korea. In fact, crypto trading is surging in the country amid massive price jumps in digital currencies. In March 2021, the overall trading volume on leading cryptocurrency exchanges crossed the total trading volume on Korea Composite Stock Price Index (KOSPI), the country’s leading stock exchange.
The cryptocurrency market cap is up by more than 150% since the start of this year. The world’s largest digital currency Bitcoin registered an all-time high of $64,000 on 14 April, which is a spike of nearly 130% in the last 14 weeks.