South Korea’s Financial Services Commission Proposes Ban on Buying Crypto with Credit Cards
The Financial Services Commission (FSC) in South Korea has proposed a ban on citizens purchasing cryptocurrencies using credit cards. The FSC aims to restrict crypto users from trading on foreign exchanges due to concerns about illegal outflow of domestic funds, money laundering, speculation, and encouraging speculative activities. Virtual assets are defined as prohibited for payment.
Different Regulations for Domestic and Foreign Exchanges
Currently, stricter regulations apply to local crypto exchanges in South Korea. Only authenticated users can transact virtual assets through deposit and withdrawal accounts. However, foreign crypto exchanges do not face the same rules. Local platforms must undergo licensing preparations and secure partnerships with local banks to provide fiat-to-crypto services. The proposed amendment will be open for public feedback until February 13, 2024, and is expected to be implemented in the first half of 2024.
Improved Crypto Regulation and Increased Transparency
South Korea has recently introduced new rules to enhance transparency and accounting clarity for virtual-asset companies. Companies holding or issuing cryptocurrencies will need to disclose their holdings in financial statements starting from 2024. The disclosure should include information about the characteristics of their holdings, quantities owned, business models, and internal accounting policies. Additionally, high-ranking public officials in South Korea are required to disclose their crypto holdings to improve transparency in public service.
Hot Take: South Korea Takes Steps to Regulate Crypto Market
South Korea’s Financial Services Commission is proposing measures to regulate the crypto market more effectively. By banning the purchase of cryptocurrencies with credit cards and restricting trading on foreign exchanges, the FSC aims to address concerns related to capital outflow, money laundering, and speculative activities. Additionally, the country is implementing new regulations for virtual-asset companies to promote transparency and accounting clarity. These efforts indicate South Korea’s commitment to creating a secure and transparent crypto environment.
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