The FUD around the South Korean government’s stance on cryptocurrency trading regulations which started as an outright ban and later mellowed down to finally weeding out anonymous trading seems to be finally over. But what are the new regulations in place and what is its impact. Lets find that out!
The long-awaited South Korean regulations have come into effect from today. This is one of the biggest FUD of 2018 so far that made headlines throughout this month when rumors that the South Korean government would implement an outright ban on cryptocurrency went to the press. These rumors were subsequently clarified by government officials but the markets paid its price, more than once so to say.
New Rule Book In Place
On January 23rd, South Korean government released a document which highlighted Money laundering & Anonymous trading as a major concern. The new rule book says, that if a user makes deposits or withdrawals of more than KRW10 million per day or KRW20 million per week, the FSC deems this as suspicious and requires the banks that facilitate the transaction to to submit what’s called a Suspicious Transaction Report (STR) to KoFIU, which allows the latter to investigate further.
But it’s not all about money laundering. The regulations also ensure that there’s a framework in place to protect the money that users deposit with exchanges, as the document states: The EDD requires banks to verify additional information for cryptocurrency exchanges: the purpose of financial transactions and the source of money; details about services that the exchanges provide; whether the exchanges are using real-name accounts; and whether the exchanges verify their users’ identification.
Last but not the lease, the guidelines stipulate that banks and financial institutions must share information with one another regarding any suspicious activity rooted in both users and exchanges, so as to avoid any issues through a lack of transparency in the sector.
Short Term & Long Term Impact
Although nothing has changed in terms of coin transactions, cryptocurrencies have taken a hit as the new rules came in to effect and this all seems to be an overreaction which should settle down soon.
Long term perspective looks much stronger now as the institutional investors and organised investment sector can confidently invest in the cryptocurrencies, of course the ones with strong fundamentals and capable teams.
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