The National Assembly in South Korea is advancing a bill that will help provide a legal framework for cryptocurrencies in the country.
Virtual currencies in this bill have been categorized as digital assets. The purpose of this bill is to bring about transparency and clarity to crypto markets in the country, according to Korea JooAng Daily, an English-language newspaper.
According to the report appearing on the daily on November 27th:
“The bill was passed by the National Assembly’s national policy committee and still needs to be approved by the judiciary committee.“ The report goes on to add, “If approved, the law would come into force in 2020.”
All Businesses Dealing in Crypto Required to Register with the Country’s Financial Intelligence Unit
Under this new legislation, all businesses that will be dealing with cryptocurrencies in the country will have to register with the FIU (Financial Intelligence Unit). This is the FSC (Financial Services Commission) in the country. The businesses will also be required to report to the authority.
For a business venture to be recognized as a crypto business in South Korea, the venture will need to get a certificate (Information Security Management System) from the Internet and Security agency operated by the state.
New Legislation Seeks to Protect Investors and Curb Money Laundering
While commenting on the bill, the FSC noted that this legislation is aimed at making crypto markets legitimate investments as well as more transparent. The authority was quick to note that the legislation would call for businesses in the crypto sector to prevent illegal activities, e.g., money laundering.
Companies in the crypto market segment will also be required to develop internal monitoring systems for all transactions being conducted by their clients. This would be in compliance with the Financial Action Task Force standards. Failure to establish an oversight system would lead to penalties being imposed.