The government of South Korea announced new rules for domestic cryptocurrency exchanges aiming to improve oversight and stop money laundering practices. Meanwhile, a prominent Korean figurehead is confident Bitcoin is a bubble about to burst.
In essence, the new rules are two-fold: anonymous accounts in Korean crypto exchanges are banned, and banks are not allowed anymore to issue new virtual accounts to cryptocurrency exchanges.
According to the South Korean news agency, Yonhap, the minister of the Office for Government Policy Coordination, Hong Nam-ki, made the announcement, after discussion with officials from other governmental bodies about the recent cryptocurrency fever that has occupied the country.
Hong said that only accounts with real and matching identity could be allowed for deposit and withdrawals. The Financial Intelligence Unit and the Financial Supervisory Service will implement the regulation and supervise exchanges to fulfill the new requirements.
Earlier, Choe Heung-sik, governor of South Korea’s Financial Supervisory Service (FSS), warned against the "Bitcoin bubble". During a meeting with journalists, he appeared confident that bitcoin is a bubble that will burst soon:
"I bet the bubble in bitcoin will burst later"
Despite those predicting the end of Bitcoin in South Korea, after the announcement, the country's ban on anonymous accounts is a much-expected step as exchanges worldwide need to perform "Know-Your-Customer" (KYC) due diligence.
Nevertheless, the move is also a measure to slow down the feverish cryptocurrency trading activity in the country. South Korea has seen massive cryptocurrency adoption this year. According to Bloomberg, Bitcoin has recently been trading nearly 30 percent higher on South Korean exchanges compared to average international rates. Meanwhile the government has struggled to keep up with developments in the industry and policy makers would like to slow down the currency’s enormous popularity. In a press release, the South Korean government expressed its worry about the country's cryptocurrency ‘obsession’:
“Cryptocurrency speculation has been irrationally overheated in Korea. The government can’t leave the abnormal situation of speculation any longer.”
31% of South Korean Workers Invest in Crypto
Meanwhile, a survey in South Korea showed that 31.3% of respondents hold a position in cryptocurrency. According to the job portal Saramin, the survey included 941 salaried South Korean citizens. Asked why they invest in cryptocurrencies, 54.2% of the individuals said this the fastest way to make money, while 47.8% indicated that investing small amounts of money into cryptocurrency was easy enough to justify the decision.
Almost half of the respondents, 44.1%, have invested less than 1 million won (US$930). Another 18.3% have invested 1 to 2 million won, while another 9.8% invested between 2 and 4 million won. 7.8% indicated that they’d invested anywhere from 4 to 6 million won, and 12.9% have invested over 10 million won. The survey detailed the average investment as 5.66 million won (US$5,264). 80.3% of those surveyed recorded a profitable return on their investment.