On March 5, 2020, the amendment to the Special Reporting Act passed in South Korea, effectively making cryptocurrency fully legal in the republic. This is according to local news reports from the country, but there has been no official confirmation yet.
The passing of the amendment signifies BTC and other cryptocurrencies’ official entry into the legal system for South Korea, and the domestic blockchain industry getting re-established.
Cryptocurrency trading platforms will have to comply with reporting requirements. Large exchanges are following this path already, but smaller-sized platforms may find it difficult to receive a license permitting them to continue trading.
For instance, exchanges, trusts, wallet companies, and ICO now need to have a real-name verification partnership with an approved Korean bank as per the new official law, in an attempt to prevent money laundering issues.
However, President Jaein Moon must sign the amendment into law to start the enactment process, which will take one year from the date of signing, followed by a 6-month grace period, which means every crypto company has to be in full compliance by September 2021.
It’s All Smiles in the Crypto Community
As expected, the news caused the crypto community to go wild with delight. Top crypto influencers, such as popular YouTuber IvanOnTech, retweeted the news on, expressing his bullish attitude towards BTC and crypto.
“BREAKING: SOUTH KOREA LEGITIMIZES CRYPTO. THIS IS HUGE… Halving is gonna be epic #Bitcoin.”
Columnist Joseph Young also tweeted that the news was a huge move, but not vital:
“The crypto legislation passed today in South Korea legitimizes the local crypto industry. It strengthens AML policies and requires exchanges to register with local financial authorities to continue operating. It’s an important one, but not as extremely big as it is made out to be.”
This new boost to crypto in South Korea takes place a day after the Indian crypto ban, imposed by the RBI in 2018, was lifted.
The two events provoked a bullish reaction from the community, with many projecting that the lifting of the Indian crypto ban and the BTC halving that is set to take place in just over two months, may trigger a significant BTC price surge in the long term.
South Korea Reinforces Crypto Rules To Protect Investors
Up until now, anyone could launch a cryptocurrency exchange in South Korea, with over 70 platforms operating in the country as of Sept. 2019. The saturation of exchanges in the market has brought a long string of issues for investors, as many have suffered frauds such as exit scams, deceitful trading volumes, and deliberate manipulation of the value of some cryptos.
By the end of the 6-month grace period, crypto traders in Korea may actually only have a couple of exchanges to choose from, since only Upbit, Bithumb, Coinone, and Korbit have the real-name banking system required by the new law.
The legalization of crypto in regulated exchanges will likely streamline crypto trading and protect investors, while also possibly boosting adoption in the country and overseas.