Reports from Bloomberg today have revealed that Korea’s financial regulators are urging lawmakers to quickly pass cryptocurrency legislation to protect investors from under-securitized exchanges. The Bloomberg article states that local exchanges are “rife with security flaws and money-laundering risks”.
South Korea, known for having one of the largest cryptocurrency markets in the world, has been plagued in recent months with cyberattacks by crypto hackers. First, in early June, the Korean exchange Coinrail was hacked for $40 million in cryptocurrency. This was quickly followed by a $31.5 million hack of South Korea’s Bithumb exchange confirmed on June 20th.
“While crypto markets have seen rapid growth, such trading platforms don’t seem to be well-enough prepared in terms of security,” Hong Seong-ki, head of the virtual currency response team at South Korea’s Financial Services Commission, stated in a recent interview. “We’re trying to legislate the most urgent and important things first, aiming for money-laundering prevention and investor protection. The bill should be passed as soon as possible.”
A South Korean lawmaker is reported to have submitted a proposed cryptocurrency bill in March to the country’s National Assembly. However, the bill has yet to receive approval.
The bill proposes putting Korean cryptocurrency exchanges under the direct supervision of Korea’s Financial Services Commission (FSC). The timeline for the bill’s passing remains uncertain, but Hong has stated that he hopes the National Assembly will act by the end of the year.
Despite Hong’s urgency for cryptocurrency legislation, he has made it clear that he himself does not think it wise for investors to enter into the space.
“I wouldn’t recommend putting money in cryptocurrencies,” said Hong.
Hong went further to say that FSC supervision doesn’t imply FSC approval of cryptocurrencies. According to Bloomberg, Hong states that regulators will be focusing on policing exchanges rather promoting their growth.
While no FSC endorsement of cryptocurrencies seems to be in sight, Korean crypto investors are likely to be in support of what appears to be much needed government oversight. Particularly as Korean exchanges continue to struggle to meet the security demands required to protect investors.
The post Korean Regulators Call for Urgent Passing of Crypto Laws appeared first on UNHASHED.