Virtual currency boom hits S. Korea

The crypto currency market is abuzz with news
that the Chicago Board Options Exchange will become the first traditional exchange to open
trading for Bitcoin futures this Sunday. Bitcoin has taken off here in South Korea,
too, and local regulators are taking notice. Won Jung-hwan reports. South Korea is one of the world’s largest
bitcoin markets, with about 1-million people trading the digital currency. According to the New York Times on Sunday,
although the population of Korea is only one sixth of the United States, Korean Won based
accounts for some virtual currencies, such as Ripple and Bitcoin Cash, account for more
trading than U.S. dollar based accounts. It was on South Korean exchanges that the
price of Bitcoin first hit 10-thousand U.S. dollars last Monday, hours before traders
in the United States reached the same level. The growth of the Korean cryptocurrency market
is even more remarkable as just a year ago such markets barely existed in Korea. But as the popularity of bitcoin has grown
rapidly in Korea, so have the risks. Prime Minister, Lee Nak-yeon, expressed concern
last week, saying that the rising Bitcoin use could lead to serious social problems
if left unaddressed. Currently such exchanges in Korea are largely
unregulated as virtual currencies are not recognized as financial products under the
current law. (KOREAN) “In the case of New York, virtual currency
exchanges are regulated in the form of a registration and license system. But in Korea, anyone who has an online shopping
mall license can freely open a virtual exchange office. So in a sense, there are no such regulations.” South Korean regulators have announced a ban
on so-called initial coin offerings, in which entrepreneurs sell custom virtual currencies. But the country needs further measures, such
as those in place in Japan, to protect buyers and prevent virtual currencies from being
used as a tool for money laundering. (KOREAN) “Japan has now changed to a registration system,
meaning official approval from the government is needed to open a virtual currency exchange
office” Virtual currency trading in Korea doesn’t
have the same regulatory infrastructure as the United States and Japan
But the Korean government has planned new regulations involving bank account registration
for virtual currency traders. These regulations come into effect at the
start of June next year. Won Jung-hwan, Arirang News.

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