South Korea is one of the nations working actively to promote growth and blockchain and cryptocurrencies. The nation has been looking to regulate crypto since 2017 and legalized it in March 2020 with the amended Special Reporting Act. Months later, The South Korean National Assembly is now set to discuss various concerns regarding crypto money laundering and related topics.
Titled “How to boost transparency in cryptocurrency transactions,” the South Korean legislature will host this talk on July 10. The news comes amidst a time when cryptocurrencies are often being used as tools to facilitate criminal activity, most recently a child porn scandal.
Local media outlet Kukto Ilbo reported that the seminar will be focused on topics such as money-laundering prevention and the inception of a system that oversees the crypto industry in the nation.
The seminar is being led by Lee Soo-jin, a Democratic Party Congressman. The seminar will be attended by the likes of the Blockchain Law Association and various other blockchain media representatives from across South Korea.
As of now, the National Assembly aims to introduce a digital asset business reporting system, which has already been approved in a plenary session in the assembly. The law includes customer identification and the establishment of money laundering prevention obligations and the issuance of information security management system (ISMS) certification.
If the new laundering prevention law is signed by the government, crypto transactions that are related to illicit dark web sites could be blocked, starting as early as 2021. Assemblyman Lee stated:
“Blockchain is the root of the digital economy, and transparency is key, but as cryptocurrencies are being used for crime, negative images started to accumulate. We need to prevent money laundering through technical cooperation with the investigative agencies.”
Development of the industry
Starting in 2021, the South Korean government has also decided to tax cryptocurrency trading based on capital gains. The nation has been considering taxing crypto ever since a Joint Task Force (TF) was formed following the massive bull run of 2017.
With the new tax laws, crypto exchanges in the nation would be providing detailed information regarding a customer’s trading activities, also reducing the risks of illegal activities like money laundering.
The nation also hasn’t slowed down on blockchain innovation as it is gearing to become a major crypto hotspot. Per a previous report, the nation’s regulatory sandbox overseen by the Financial Services Commission (FSC) has helped create 380 new blockchain-based jobs and also generated $110 million in new investments.
Also, last month South Korea’s central bank announced the launch of a pilot program on CBDCs. The program marked the nation’s official entry into the CBDC race and the program is set to identify the technological and legal challenges involved to create and deploy a state-backed cryptocurrency.