The new South Korean crypto ‘Crackdown’ and not ‘bluster’ as tension of bank links

Source: Adobe / Raphaël Bourgeois

The South Korean government has announced that it will embark on a “crackdown” on illegal crypto transactions, including those carried out on international crypto exchanges – following a meeting of political leaders, law enforcement and high-level financial regulators.

Chosun reported that Second Deputy Secretary of State Moon Seung-wook called a meeting of the Financial Services Commission, the Ministry of Strategy and Finance, the Ministry of Justice and the National Police Agency in an attempt to tackle what the government has termed an “overheated market”. The last time Seoul made noises like these, it was followed by a mini-crackdown on crypto, which involved a total (still existing) ban on the initial coin offering (ICO).

Seoul-based IT journalist Janet Cho said,

“It doesn’t sound like bragging to me. There are certainly a lot of things the government can choose to do to squeeze the crypto industry. The real question is, “Are they going to scare investors like they did in 2018?” Maybe this time around, that strategy won’t work, but only time will tell. “

So far, ministries have been somewhat suspicious of their plans, making only vague remarks about the crypto’s status as’ not legal tender ‘and noting that the value of the tokens’ is not guaranteed. “.

The steps they are poised to take so far also don’t seem overwhelming – with a “crackdown on cryptocurrencies used in illegal activities such as market manipulation, money laundering and money laundering.” tax evasion “in pipelines” in cooperation with police and prosecutors. and financial authorities. “

But while previous crackdowns have focused on domestic platforms, Chosun reports that this time ministers are “responding to illegal activities carried out in the context of overseas exchanges in cooperation with international organizations such as Interpol. “

However, a bigger problem could come from the banking world.

Under the new legislation, all crypto exchanges must now comply with banking regulations, with all exchange accounts linked to real-name authenticated bank accounts. But with the South Korean crypto fever exploding, there are signs that the three banks that have agreed to work with the “big four” crypto exchanges on banks – namely Upbit, Penne, Bithumb and Coinone – may have bitten more than they can chew.

As reported yesterday, one of these banks, K-Bank, a newcomer to the crypto-banking game, has already encountered problems due to his Upbit contract. A massive influx of new crypto activity this year, as basic mortgages and other lending products saw slow sales, threw the K-Bank’s monetary model dangerously out of place.

Fn news reported that one (unnamed) of the three commercial banks had asked its crypto exchange partner to stop accepting new account registration requests – despite waves of “crypto moms“And younger investors (20-39 years) are rushing bitcoin (BTC) and major altcoins. Entry into the crypto market is no longer “optional” for young people, an expert said.

Cho explained,

“The role of banks is essential. If the banks are cold-eyed or scared of “crackdown”, things could escalate. “

On Twitter, it looks like most won’t get scared that easily.

A poster wrote that they did not want to “blame the government”, but were of the opinion that with “the mad escalation of house prices” the “only way” to escape the trap of low wages and the cost of increasingly expensive life was crypto.

Crypto markets seem totally indented so far, with BTC trading on Upbit for prices around 12% higher than Binance, for Scolkg The data at the time of writing this article.
Learn more:
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South Koreans have warned to pay tax on cryptocurrencies held on foreign exchanges
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Can’t beat the crypto regulators? Educate them
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