By Nam Hyun-woo
A Seoul-based law firm filed a constitutional appeal over the government's regulations on cryptocurrency trading, saying regulating the trade through administrative guidance without any legal grounds is an infringement of property rights.
According to Anguk Law Offices, Tuesday, it filed the appeal Dec. 30 through the Constitutional Court's online appeal system.
The law firm is preparing a series of follow-up appeals filed by virtual currency investors and exchanges. In its appeal, the law office claimed cryptocurrencies are not legal tender but a property or an asset that can be exchanged through legitimate currencies or other goods with economic value.
But the government is exerting "unconstitutional" authority through its regulations released Dec. 13 and 28, according to the law office.
The government announced the regulations to control Korea's coin trading frenzy, which became explosive during the past several months.
Through the regulations, the government has been guiding banks to stop allowing exchanges to open virtual accounts for traders. Instead, the government said it will have exchanges transfer money through investors' "real-name accounts" that can verify not only the real name of the account holder but also other identity information, to deter money laundering and other illegalities.
Currently, most virtual currency exchanges here use virtual accounts linked to their bank accounts because virtual accounts allow exchanges to manage clients' money more easily.
After the announcement, banks have stopped allowing exchanges to open new virtual accounts, thus making it impossible for exchanges to accept new investors. The real-name based trading is expected to begin as early as Jan. 20.
The government does not recognize virtual currency as a legitimate currency or a financial product. Since there is no financial law affecting those tokens, they are tantamount to commodities or goods, which can be traded freely unless there is no law affecting them, the law office claimed.
"The government's regulation is devaluing virtual currencies by making trading very difficult," the office said in a statement. "Thus, this is an infringement on people's property rights by the government's unlawful measures."
"We agree that regulations are necessary," said lawyer Jeong Hee-chan at the offices. "But regulation should come after related laws are implemented. The petition is also a request for the government to respect people's property rights and introduce regulations after reaching a social consensus."
"It is very worrisome that the government is likening investors' success to a morally reprehensible speculation without sufficient review of it," Jeong said.
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