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S Korea’s Incoming Minister Suspects “Illegal Activities” on Exchanges

Tim Alper
Last updated: | 1 min read

South Korea’s cryptocurrency and blockchain sector is bracing itself for regulations, after the country’s Minister of Economy and Finance and deputy prime minister elect, Hong Nam-ki, spoke out about exchanges, initial coin offerings (ICO) – and even floated possible crypto tax plans.

Source: iStock/nyiragongo

Per newspaper Segye Ilbo, Hong wants to prioritize exchange and ICO-related matters as part of his blockchain policy, if he is confirmed in his new position by the National Assembly.

Hong Nam-ki. Source: a video screenshot

Ominously perhaps, Hong remarked, per the newspaper, “There are concerns that illegal activities are taking place on South Korean crypto exchanges, and that they are essentially brokerage services that use blockchain technology.”

The paper points out that many of Hong’s estimates about the size of the country’s cryptocurrency market only take into account figures released by the country’s four largest exchanges (Bithumb, Upbit, Coinone and Korbit), despite the fact that there are some 200 active exchanges in South Korea.

Hong has announced plans to create a crypto tax task force “made up of experts from government bodies including tax agencies, as well as private sector representatives.” Hong’s proposed task force would be charged with studying cryptocurrency tax laws imposed in other countries before submitting a proposal to Seoul.

The minister-elect also echoed remarks made by the National Policy Committee last month on a possible reversal of the ICO ban. He stated that the government was still in consultation talks with regulators and industry experts, and was not yet ready to announce whether its stance on the ban had changed. The government had previously promised to make its position known by the end of November.

Hong is the former minister of the Office for Government Policy Coordination. He was officially nominated for his new post late last month, and has spoken out on the issue of cryptocurrencies in the past, stating that the government is divided on blockchain-related matters.

The minister-elect is likely to field more questions on his blockchain and cryptocurrency views at hearings in the National Assembly in the week ahead.
Geographical distribution of initial coin offering (ICO) projects based on origin of the project team, Q3 2018

‘Country of origin’ means a country in which more than 50% of team members were actually residing at the time of an ICO. Source. ICORating.