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National Assembly to Devise Cryptocurrency Legislation
Curbing ‘Pathological Social Phenomenon’
National Assembly to Devise Cryptocurrency Legislation
  • By Yoon Yung Sil
  • December 5, 2017, 01:30
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A heated discussion over whether or not virtual currency transaction is a trade similar to the depositary business which does not need further legal permission is expected to take place.
A heated discussion over whether or not virtual currency transaction is a trade similar to the depositary business which does not need further legal permission is expected to take place.

 

As South Korean prime minister Lee Nak-yon said the recent overheating investment on virtual currency, including Bitcoin, is a “speculation” and “pathological social phenomenon,” the National Assembly will push for cryptocurrency legislation.

According to the National Assembly and investment banking industry sources on December 3, the National Policy Committee of the National Assembly will hold a public hearing on virtual currency transactions on the 4th in order to legislate the cryptocurrency law in earnest. Some politicians held a public hearing on virtual currency before but it is the first time for the National Assembly to hold it for legislation. An official from the National Assembly said, “We are holding the public hearing to refer in a bid to review the revised legislative bill of the Electronic Financial Transaction Law that has been devised to introduce the cryptocurrency exchange approval system.”

At the public offering, a heated discussion over whether or not virtual currency transaction is a trade similar to the depositary business which does not need further legal permission is expected to take place. As the Financial Services Commission is planning to legalize the law that will make virtual currency transactions a similar depositary business by the end of this month, there will be pros and cons on this issue.

Cha Hyun-jin, head of the financial payment division at the Bank of Korea who will participate in the public hearing as a speaker, said, “There are investor losses caused by the form of financial frauds through a money pyramid scheme and a similar depositary business under the pretext of cryptocurrency investment. However, we should come up with the regulations on cryptocurrency after comprehensively considering the feature and function of virtual money, market conditions and legislation examples in major countries.”

On the other hand, Kim Jin-hwa, the co-founder of the Korea Blockchain Association who will participate in the public hearing as another speaker, said, “Since cryptocurrency transactions don’t guarantee the return of principal and profit, it is not a similar depositary business.”

In addition, there are expected have strong arguments over South Korea becoming the second country prohibiting the initial coin offerings (ICO) after China. Hong Ki-hoon, a business administration professor at Hongik University, is planning to say at the public hearing, “It is desirable to put delicate regulations on it rather than one-size-fits-all regulations.” Lee Chun-pyo, a honorary economics professor at Seoul National University, will stress, “The prohibition on the ICO is a simplified decision. It conflicts with the efforts for regulatory reforms.”