Korea to ease rules on crypto assets
FSS chief nominee Yoon Suk-heun responds to a question at an industry forum held in downtown Seoul in January. / Korea Times file photo
By Kim Yoo-chul
Korea may ease rules and relevant policies regarding cryptocurrencies, as the nominee of the country’s top financial regulator hinted at a possible adjustment of regulations that have been applied to the cryptocurrency market.
Yoon Suk-heun, a visiting professor of business administration at Seoul National University, has been named to lead the Financial Supervisory Service (FSS) after the former FSS head Kim Ki-sik stepped down from the post.
In a statement, the Financial Services Commission (FSC), which also regulates the FSS, said it notified the presidential office of its choice for approval by President Moon Jae-in.
The new FSS nominee is an activist and well-known to have been a “reform-minded” experienced bureaucrat. He is also the head of a government commission that designs measures to reform issues and affairs of the financial industry.
“Yoon is a qualified person to take a leading role for reforms and changes in the financial industry,” said the FSC statement, Friday.
Yoon seemed to be responsive and inclined to pursue policies according to market rules not based on heavy intervention, raising expectations that Korea will ease restrictions on the controversial initial coin offerings (ICOs) and other types of crypto-based trading.
“What I think is that exchanges are to function to meet the needs of investors and market participants, broadly, to help them keep trading and making transactions. Any forceful ban against them would hurt the nature of the market,” Yoon said at an industry event on January 31.
“The government is saying cryptocurrencies are neither currency nor financial assets. Given the high volatility in cryptocurrencies, the government stance is understandable. However, the country’s position on cryptocurrencies, which it said are not financial assets, is hard to understand,” the nominee said.
At that time, he said the government has a greater role for its assessment of financial services that will be operational within blockchain or blockchain-based technologies.
“Regulation is good. However, it would be more than just good when it is used to help new businesses grow. Imposing taxes on crypto exchanges and investors needs to be considered, if necessary,” the new FSS chief nominee said.
The remarks side with the country’s central bank after the Bank of Korea said recently it was thinking about crypto-based assets and blockchain applications for its project aimed at delivering a “cashless society.”
For a time, the Korean public was confused about the country’s complicated stance on cryptocurrencies, with the justice minister preparing a bill to ban cryptocurrency trading. But the government has since refuted those claims of a ban. Instead, it has applied rules and regulations that ensure the market conforms and investors aren’t put at risk.
Still, the government has been maintaining its blanket ban on ICOs, which became effective last September.
Policymakers and industry executives have indicated they have no intent to ban local cryptocurrency exchanges but will instead work within the existing framework to promote the safety of investors and boost transparency.
Japan, Switzerland and Malta are positioning themselves as the future centers for blockchain and cryptocurrency.