South Korea is taking steps to regulate the use of cryptocurrency within its borders. The Financial Services Commission (FSC) is proposing a ban on purchasing cryptocurrencies with credit cards in order to reduce the risk of illegal activities such as money laundering and terror financing. This is a growing concern for many countries, including South Korea, as the private and untraceable nature of crypto transactions make them an easy target for criminals.
The FSC stated that there have been concerns about the use of credit cards on overseas virtual asset exchanges, which could lead to illegal outflows of funds, money laundering, speculation, and other illicit activities. In an effort to address these concerns, the FSC is seeking public feedback until February 13 before making a decision on the ban in the first half of 2024.
Currently, South Korea requires all local crypto exchanges to verify the identities of their users, but this rule does not apply to international exchanges. This creates a loophole for criminals to exploit and defraud banks that provide them with credit cards. The FSC hopes to establish cooperation with international brands to prevent foreign currency outflow and strengthen efforts against money laundering.
According to a study by the FSC, the crypto market in South Korea was valued at $46 billion by the end of 2021, with the number of users reaching 5.58 million or around 10% of the country’s population. Last year, South Korea also announced that all blockchain-based tokens operating within its borders will be treated as securities, with the Ministry of Justice developing a “Virtual Currency Tracking System” to prevent money laundering through crypto.
It is important to note that some links in this article may be affiliate links. For more information, please refer to our ethics statement.
