Korea is now a step closer to legalizing the usage of cryptocurrencies according to a Nov. 27 report by local news agency Korea Joongang.
The report confirmed that the country’s National Assembly’s national policy committee passed a bill designed to establish a legal foundation for cryptocurrencies by categorizing them as digital assets.
Korea’s Financial Services Commission (FSC), which understandably had a hand in the development of the bill, believes that introducing regulations will help make cryptocurrencies more transparent and legitimize investment in them.
The report also shared insights regarding what the new rules could mean for crypto startups in the country who has until date operated under little to no regulatory scrutiny.
Once the newly proposed regulation goes into regulation, crypto platforms in the country would be required to implement procedures to prevent money laundering via the use of cryptocurrencies.
Additionally, they will have to register with the FSC’s Financial Intelligence Unit (FIU) as a digital asset business, and also report periodically to the regulatory agency.
Penalties will also come into play if an agency fails to introduce an anti-money laundering system that meets standards set by the Financial Action Task Force (FATF) earlier this year.
Additionally, a failure to obtain a cybersecurity certificate from the Korea Internet and Security Agency (KISA), operating falsified bank accounts, or failing to report to the FSC would be considered punishable offenses.
Although the report does not provide a specific timeline regarding when the new rules will be adopted, it noted that the bill still needs to be passed by the judiciary committee and on the main floor of the National Assembly.
Then, once approved by lawmakers, the law will go into effect one year later.
Evidently, the move to regulate crypto in Korea is only one of the recent steps designed to encourage the growth of the emerging space.
Last month, the Korea Internet Security Agency (KISA) announced that it would support blockchain-related projects with a 10.5 billion won (appr. $9 million) in 2020.