South Korea Proposes Amendment to Credit Finance Act to Restrict Crypto Purchases
The Financial Services Commission (FSC) of South Korea, the country’s top financial regulator, has put forth a proposal to amend its credit finance act. The amendment aims to effectively prevent local citizens from using credit cards to purchase cryptocurrencies. The primary objective of this amendment is to limit crypto traders in South Korea from buying crypto on foreign exchanges. The FSC has expressed concerns about illegal outflows of domestic funds, money laundering, and speculative behavior, which have prompted this decision.
The proposed amendment will undergo a period of public feedback until February 13 and is expected to be reviewed and voted on for implementation in the first half of 2024, according to Yonhap News Agency.
2021 Amendments and Local Exchange Requirements
In 2021, South Korean crypto users were mandated to trade using withdrawal and deposit accounts on local exchanges, verified with their real names. Additionally, local trading platforms must undergo rigorous licensing preparations and establish partnerships with local banks in order to provide fiat-to-crypto services.
Hot Take: South Korea Moves to Restrict Crypto Purchases
South Korea’s Financial Services Commission has proposed an amendment that would prohibit citizens from purchasing cryptocurrencies using credit cards. The aim is to limit trading on foreign exchanges and address concerns about illegal fund outflows and money laundering. The proposed amendment will go through a public feedback process before potential implementation in the first half of 2024. These measures follow previous regulations requiring users to trade using verified accounts on local exchanges and imposing licensing requirements for fiat-to-crypto services. South Korea continues to prioritize regulatory measures in the cryptocurrency space.
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