Cryptocurrencies and blockchain-based applications are revolutionizing the way people trade and are dubbed to be providing most secure system developed until now. At the end of 2017 it sounded like the government meant to shutter crypto exchanges, but new regulations announced Monday suggest that a blanket shutdown is less likely.
South Korean cryptocurrency exchange Korbit has barred non-citizens from depositing local currency - the Korean won - on its platform.
The plan, which will be a "measure of tax enforcement", is expected to come into effect toward the end of January or at the beginning of February, Yonhap News Agency reported.
When the banks introduce the system of verifying cryptocurrency investors' identification next Tuesday, current virtual accounts for virtual coins will be banned the same day, Kim Yong-beom, vice chairman of the Financial Services Commission (FSC), told reporters.
The article suggests that regulators will also plan to limit capital flights through cryptocurrency to $50,000 like capital controls.
The proposal essentially strengthens know-your-customer (KYC) rules already in existence for exchanges and banks, and will require cryptocurrency exchange users to connect a bank account with identifying information in order to deposit or withdraw funds.
Mining of Bitcoin and other cryptocurrencies presents a unique "Make in India" opportunity that can boost self-employment. At the end of 2017, European Union regulators expanded anti-money laundering (AML) rules to include crypto exchanges and digital wallet providers, compelling them to follow the same AML compliance rules as banks. These fears would begin to fade in a slow manner and this would be beneficial as more regulation is there, the more it is likely to attract the bigger traders and investors.