Unexpected Restriction on Cryptocurrencies from South Korea: Here's Why!

South Korea's Financial Services Commission (FSC) has made a strategic move regarding cryptocurrency transactions. He announced a proposed amendment to the Credit Financing Act to curb potential misuse of funds and speculative activities. In this regard, he signaled that a significant restriction will be imposed on the use of credit cards for cryptocurrency transactions.

Meanwhile, the regulator's primary goal is to prevent local citizens from purchasing cryptocurrencies on foreign exchanges, citing fears of illicit fund outflow, money laundering, and the promotion of speculative behavior.

FSC's Crypto Purchase Restrictions

The proposed amendment highlighted in the announcement is aimed at the illegal outflow of domestic funds abroad, especially through card payments on virtual stock exchanges. As Koinfinans.com reported, the FSC's acknowledgment of concerns about money laundering and speculative activities led to the decision to expand the scope of prohibited credit card payments.

Meanwhile, the FSC invites public comments on the proposed amendment by 13 February 2024, which is expected to be implemented in the first half of the same year.

Public Feedback and Implementation Timeline

South Korean citizens, organizations, or legal entities with views on the amendment have the opportunity to submit their feedback online through the Participatory Legislation Center. In other words, the FSC encourages stakeholders to contribute their perspectives, ensuring that different perspectives are comprehensively evaluated.

Meanwhile, in another new development in the country's crypto** landscape, South Korea's National Tax Service has clarified its stance on virtualities, providing much-needed clarity for decentralized crypto wallet holders. Notably, the National Tax Service announced that individuals holding virtual assets through non-custodial, decentralized wallets, including cold wallets, will not be subject to offshore financial account reporting.

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