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- Approval of this amendment signifies a green signal for cryptocurrency trading and holding into the lawful system for the South Korean government.
- It is expected that this act will come into a process for about one year from the date of signing, followed by a grace period of 6 months.
- By doing so the individuals could deposit as well as withdraw fiat currency from and to exchange.
This afternoon the National Assembly passed the amendment to the Act on Reporting and Use of Specific Financial Information. Approval of this amendment signifies a green signal for cryptocurrency trading and holding into the lawful system for the South Korean government.
As a result of this event, a rearrangement of the domestic blockchain industry is expected to take place in South Korea. President Jaein Moon signed this amendment into law to start the statute process.
It is expected that this act will come into a process for about one year from the date of signing, followed by a grace period of 6 months. Meaning, those authorities which were affected by this law will need to be in full compliance by September 2021.
The ICO, wallet companies, trusts, and exchanges are now required genuine name verification partnership with an official Korean Bank. This helps to prevent money laundering by assigning a verified individual to a single bank account.
By doing so the individuals could deposit as well as withdraw fiat currency from and to exchange. Also, the companies must be certified to the information security management system (ISMS) certification.
The actions executed by the law will ensure a strict AML and opposing the financing of terrorism (CFT) agreement by the exchanges mainly.
Till now, the situation of the crypto-market in South Korea is that anyone can establish a cryptocurrency exchange. Up until September 2019, there were over 70 exchanges in the country. This saturation of the market resulted in ample problems for the investors in the industry.
Many of the consumers have undergone fraud ranging from exit scams also faced false trading volumes to insider trading.
The local Korean crypto-investors have mixed feelings about the amendment of this law. Some have praised the actions stating that a ‘New Coin Age’ has begun in Korea while others noted that trading in cryptocurrency is no more national gambling.
