Proposed Ban on Credit Card Purchases of Cryptocurrency in South Korea

The Financial Services Commission of South Korea Proposes Ban on Credit Card Purchases of Cryptocurrencies

The Financial Services Commission (FSC), the main financial regulator in South Korea, has put forth a proposal to amend the credit financing law. The proposal aims to ban the use of credit cards for purchasing cryptocurrencies. The FSC is concerned about issues such as illegal outflow of national funds, money laundering, and speculative behaviors, leading them to take action.

Restricting Access to Foreign Exchanges

By prohibiting Korean citizens from using credit cards to buy crypto, the government hopes to limit their access to foreign exchanges and have better control over money flows. This move will also allow closer monitoring of crypto traders in the country.

Voting Process and Implementation

The proposal is currently in the voting process and is open for public feedback until February 13th. After that, it will be reviewed and voted on with the goal of being implemented in the first half of 2024. This proposal aligns with a 2021 amendment to the South Korean financial reporting law, which requires crypto users to operate through local exchanges using deposit and withdrawal accounts.

Meeting with SEC President

Last month, it was revealed that Lee Bok-hyeon, governor of the Financial Supervisory Service (FSS) of South Korea, will have a meeting with Gary Gensler, the President of the Securities and Exchange Commission (SEC) of the USA. The meeting aims to address challenges in the crypto landscape and strengthen cooperation between the two regulatory bodies. Discussions will likely focus on regulatory evolution and consumer protection in the crypto market.

Hot Take: South Korea Takes Measures to Regulate Crypto Purchases with Credit Cards

The Financial Services Commission of South Korea has proposed a ban on using credit cards to purchase cryptocurrencies. The goal is to restrict access to foreign exchanges for Korean crypto traders and have better control over money flows. This proposal is currently undergoing the voting process and is open for public feedback. If implemented, it will align with existing laws requiring crypto users to operate through local exchanges. Additionally, South Korea’s governor of the Financial Supervisory Service will meet with the President of the SEC to address challenges in the crypto landscape and strengthen cooperation between the two regulatory bodies.