In what has been seen as a big win for the crypto space the South Korean National Assembly’s National Policy Committee has passed a bill that will create a framework that formally classifies crypto tokens and other virtual currencies as digital assets. Sources indicate that this move came on Tuesday as one of the crypto space’s most friendly countries now wants to create a foundation for the operations of cryptocurrency businesses.
The bill also sets rules for cryptocurrency-related businesses and other virtual currencies as it offers requirements for the operations of such on South Korean soil. All virtual currency-related businesses will now be required to obtain an Information Security Management System (ISMS) certificate from the state regulator Korean Internet and Security Agency (KISA). Furthermore, all cryptocurrency and virtual currency-related businesses are also required to register their businesses as digital asset businesses with the Korean Financial Services Commission’s Financial Intelligence Unit (FIU).
On top of that, the cryptocurrency businesses are required to get their Anti-Money Laundering and Know-Your-Customer systems to be in line with the international best practices of the Financial Action Task Force (FATF). Those businesses that do not measure up to these standards will be punished and some serious measures will be taken against them according to the law.
The bill will also be passed by the Judiciary Committee and on the main floor of the National Assembly before it can be passed into law. And as per South Korea’s Constitutional process, it takes about one year for the law to go into effect.
This isn’t the first time that the South Korean government has tried to regulate the cryptospace within its borders. Last year alone, authorities had banned anonymous trading of cryptocurrencies and also later introduced new standards that will allow Anti-Money -Laundering to take root in the crypto space.
South Korea is one of the few countries in the world that has come out in the open to be cryptocurrency-friendly. This comes at a time when most nations are still grappling with the notion of the existence of decentralized ledger technologies (DLT). Of course, while many may speak against the recent move to create a framework for the operations of cryptocurrency businesses within the country, this provides an easy-to-follow model that other nations can implement should the authorities in such nations lack the direction to follow.
South Korea has also earned its stripes before now as one of the countries in the world that has an extremely high number of cryptocurrency users. This again pointed to the need for enhanced regulation and control of what will most likely be the technological innovation of the next decade.