It seems there is still a fair amount of confusion as to what South Korean regulators aim to do about cryptocurrencies. With new regulations going into effect later this week, it is due time to clarify a few things. First of all, there will no longer be an option to trade cryptocurrencies anonymously. Additionally, it seems that exchanges will now have a minimum age requirement. Neither of these developments impacts cryptocurrency in a negative way, though.
The Future of Cryptocurrencies in South Korea
It is good to see South Korean regulators impose new requirements when it comes to the trading of cryptocurrencies. Nevertheless, there is a lot of confusion regarding the new guidelines and how they will work exactly. Unlike what most people assumed, these new guidelines will not hinder the growth of Bitcoin and similar currencies in the country. In fact, it is likely they will have the opposite effect in the near future. In a way, these decisions will help legitimize cryptocurrency as a whole.
First of all, it will no longer be possible to buy or sell cryptocurrencies on South Korean exchanges without verifying one’s identity. In the Western world, virtually all exchanges perform a KYC check whenever someone wants to use an exchange for trading purposes. It is only normal that the same should apply to other countries around the world. Anonymous transactions across exchanges should not be allowed, even though it remains to be seen if this will apply to P2P and OTC trading as well.
Moreover, foreigners residing outside South Korea will have a difficult time using these exchanges. Anyone without access to a Korean bank account will not be able to buy or sell cryptocurrencies on platforms such as Bithumb, Upbit, Coinone, and Korbit. Additionally, anyone under the age of 19 will not be allowed to buy or sell these currencies on exchanges either, which is not exactly a big surprise. In some countries, one has to be 18 or older to legally set up an account on a cryptocurrency exchange. South Korea seems to be following a similar guideline in this regard.
It is evident that these changes will require a system upgrade on the part of all South Korean exchanges. It has been suggested that existing accounts used for cryptocurrency trading will become obsolete altogether. This is the vaguest statement regarding these regulations we have come across so far, as it doesn’t indicate if this applies to all cryptocurrency users or just the people who don’t adhere to the new guidelines. The latter scenario seems to be the more logical one, although a better explanation regarding this matter would certainly be appreciated.
All of this further confirms the South Korean government has zero intention of banning cryptocurrency trading altogether. Rather, it is taking a more than reasonable approach to regulating trading platforms and exchanges. It is highly doubtful any of the top platforms will lose customers because of these new guidelines. After all, the government simply wishes to reduce cryptocurrency speculation and put an end to cryptocurrency-related criminal activities.
It is good to see the South Korean government clarify the specifics of its cryptocurrency guidelines. Knowing there will be no complete ban on cryptocurrencies is a positive sign, and the new regulations will only lead to a healthier cryptocurrency ecosystem moving forward. Even though the ban on anonymous trading will always be considered somewhat controversial, it is a necessary change when looking at the bigger picture.