Signs of a Crypto Regulatory Climbdown from South Korea’s Ruling Party

Exchange Politics Regulation South Korea

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023 06:54 EDT

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South Korean ruling party’s crypto task force has met with a number of major domestic crypto exchanges – an indication that it could advise the government to revise or even soften its hardline policy on regulation.

As reported, the next South Korean presidential election is scheduled to take place on March 9 next year, but opinion polls have shown that the ruling party, the Democratic Party, could well be staring down the barrel of defeat with major figures from the opposition party gaining support. The former Democratic Party-appointed Prosecutor-General Yoon Seok-youl, standing on an independent platform, is another frontrunner.

And with primaries set to take place in September, Democratic leaders are concerned that the party’s core support – younger South Koreans – are starting to grow apathetic. One reason for this is the widespread disapproval of what is regarded by many as Seoul’s heavy-handed regulation approach to the crypto industry. Voters could be alienated by the fact that crypto trading profits are set to be taxed at a flat rate of 20% from next year, with a whole host of regulations incoming for crypto exchanges.

The party’s task force has apparently sought to address this, and rather than follow the same kind of top-down approach as the regulatory Financial Services Commission, is taking a more conciliatory stance.

Per SBS and Newsis, the task force, which is made up of mainly senior MPs, met the heads of nine leading exchanges, including the “big four” of Korbit, Bithumb, Coinone and the Upbit operator Dunamu.

The meeting was held in the offices of the Korea Securities Depository in Seoul’s Yeouido district.

The task force’s head, Yoo Dong-soo, was quoted as stating that acts could be “amended,” but that in doing so, it was “most important to include the voices of the industry” in deliberations.

Yoo also asked exchanges to let the task force know what they would like to see included in “virtual assets-related laws,” in order to provide “customer protection” and “self-regulation.” He asked the exchange heads to tell the task force “frankly what you would like us to do,” pledging to put forward legislation that reflected their views.

Earlier this month, the task force spoke of the need to “institutionalize” the crypto sector.
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– South Korea’s Ruling Party, Regulators at Odds over Crypto Policy
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