By Kim Yoo-chul
Uncertainty is mounting for the future of cryptocurrencies in Korea as the chief of the country's top regulator said Wednesday it is reviewing possibly shutting down exchanges.
"The government has begun discussing the possibility of shutting down cryptocurrency exchanges or closing only the ones which are involved in illegal practices," said Choi Jong-ku, chief of the Financial Services Commission (FSC).
The FSC chairman made the remark at a session of the National Assembly. He said the FSC plans to apply anti-speculation measures against virtual money.
He said the government needs legal grounds to carry out the closure of the exchanges.
"We need legislative steps before shutting down exchanges," Choi said.
Despite repeated warnings from government officials including the FSC chief about the closure of cryptocurrency exchanges, little progress has so far been made to create a regulatory framework for crypto-assets.
"We are very serious to implement plans to curb the recent crypto craze. We are in the stage of consultations among ministries," Choi said.
Choi said the justice ministry is working on developing systems and plans that target unpermitted blockchains that utilize digital currency tumblers to combat any illegal activities such as money laundering.
"The FSC will make a thorough inspection of banks to discourage speculative trading of crypto-assets on cryptocurrency exchanges," he said.
Choi Heung-sik, governor of the Financial Supervisory Service (FSS), said his organization will announce its findings on illegal trading of digital coins. The FSS is an executive arm of the FSC.
"We've acknowledged allegations that an FSS official sold crypto-assets based on insider information before the government's updated announcement to regulate the market. We are looking into this case," Choi said.
Hong Nam-ki, minister of the office for government policy coordination, added that views on trading digital tokens are greatly different even within government offices. Hence, he expects it will take more time to form unified stances on the thorny topic.
In a separate press conference, Bank of Korea Governor Lee Ju-yeol said the central bank believes digital currencies are neither products nor financial assets. Lee also said he understands the ongoing government moves to regulate the market.
"It's understandable the government is pushing ahead with its plans to further regulate the cryptocurrency market, as the prices of cryptocurrencies are showing sudden ups and downs. The trend is not good from the perspective of investors," Lee said.
But Lee said the central bank has begun studying the effects of virtual currencies on financial stability and on how digital tokens will transform traditional payment systems.
Lee said disregarding cryptocurrencies as an exceptional threat may create the misleading impression that conventional financial products are not vulnerable to any external threats.
"The BOK is collaborating with banks in other countries to deal with concerns over the association between any wrongdoings with cryptocurrencies," Lee said.
Uncertainty is mounting for the future of cryptocurrencies in Korea as the chief of the country's top regulator said Wednesday it is reviewing possibly shutting down exchanges.
"The government has begun discussing the possibility of shutting down cryptocurrency exchanges or closing only the ones which are involved in illegal practices," said Choi Jong-ku, chief of the Financial Services Commission (FSC).
The FSC chairman made the remark at a session of the National Assembly. He said the FSC plans to apply anti-speculation measures against virtual money.
He said the government needs legal grounds to carry out the closure of the exchanges.
"We need legislative steps before shutting down exchanges," Choi said.
Despite repeated warnings from government officials including the FSC chief about the closure of cryptocurrency exchanges, little progress has so far been made to create a regulatory framework for crypto-assets.
"We are very serious to implement plans to curb the recent crypto craze. We are in the stage of consultations among ministries," Choi said.
Choi said the justice ministry is working on developing systems and plans that target unpermitted blockchains that utilize digital currency tumblers to combat any illegal activities such as money laundering.
"The FSC will make a thorough inspection of banks to discourage speculative trading of crypto-assets on cryptocurrency exchanges," he said.
Choi Heung-sik, governor of the Financial Supervisory Service (FSS), said his organization will announce its findings on illegal trading of digital coins. The FSS is an executive arm of the FSC.
"We've acknowledged allegations that an FSS official sold crypto-assets based on insider information before the government's updated announcement to regulate the market. We are looking into this case," Choi said.
Hong Nam-ki, minister of the office for government policy coordination, added that views on trading digital tokens are greatly different even within government offices. Hence, he expects it will take more time to form unified stances on the thorny topic.
In a separate press conference, Bank of Korea Governor Lee Ju-yeol said the central bank believes digital currencies are neither products nor financial assets. Lee also said he understands the ongoing government moves to regulate the market.
"It's understandable the government is pushing ahead with its plans to further regulate the cryptocurrency market, as the prices of cryptocurrencies are showing sudden ups and downs. The trend is not good from the perspective of investors," Lee said.
But Lee said the central bank has begun studying the effects of virtual currencies on financial stability and on how digital tokens will transform traditional payment systems.
Lee said disregarding cryptocurrencies as an exceptional threat may create the misleading impression that conventional financial products are not vulnerable to any external threats.
"The BOK is collaborating with banks in other countries to deal with concerns over the association between any wrongdoings with cryptocurrencies," Lee said.
