A South Korean lawmaker plans to introduce three bills next month that would establish the country's first regulatory framework for cryptocurrencies like Bitcoin and Ethereum, according to the Korea H
A South Korean lawmaker plans to introduce three bills next month that would establish the country's first regulatory framework for cryptocurrencies like Bitcoin and Ethereum, according to the Korea Herald. Rep. Park Yong-jin of the ruling Democratic Party of Korea said he would push the revisions forward in July to address gaps in how the government oversees digital currency trading.
Park's proposal identified three core problems: the lack of state protections for digital currency values, the absence of mechanisms to exchange cryptocurrencies for conventional money, and the risk that a crypto bubble could damage the broader economy.
A revision to the Electronic Financial Transactions Act would require brokers, traders, and other entities handling cryptocurrency transactions to gain approval from the Financial Services Commission. Companies would need to hold at least 500 million won (US$436,300) in capital, employ qualified staff, and maintain adequate computer systems.
Separate changes to income and corporate tax law would let authorities pursue tax evaders and levy capital gains taxes on crypto transactions.
Matt Newton, a market analyst at eToro, the European brokerage that offers Bitcoin and Ethereum trading, welcomed the shift. "The upcoming regulatory framework to regulate and legalize Bitcoin is a significant move considering South Korea has been a global leader in Bitcoin purchases this year," he said.
"The growing regulatory infrastructure around cryptocurrencies also helps protect investors from fraud and exchange failures, stabilizing the market – if not the price," Newton said. "Price volatility in Bitcoin will continue, but as long as real-world adoption keeps gathering pace, the medium-term outlook is extremely positive."
Newton also said: "Future gains in the value of Bitcoin depend on the legitimization and adoption of the digital currency as an acceptable real-world medium of exchange, using it to pay for bills, groceries and remittances, thus increasing volumes and driving the asset price."
Cryptocurrency trading surged across Asia this year after Japan's regulators approved digital currencies as legal payment methods in March. Japan's share of global Bitcoin trading jumped from under 1% to over 30% in recent months. Bitcoin trades against the South Korean won account for 8% of the world's total, the fourth largest pair, ahead of the euro at 5%. South Korea ranks second globally for Ether trading, with 27% of worldwide Ether-won trades, behind only the dollar at 31% and ahead of Bitcoin at 23%.
The news of a regulatory framework comes as Bithumb, South Korea's largest cryptocurrency exchange, disclosed a major breach. Bithumb discovered on June 29 that hackers had broken into one employee's personal computer in February, accessing information for 31,000 customers—about 3% of the platform's user base.
One customer reported losing 1.2 billion won (US$1.04 million) in the attack. Bithumb said it would cover losses up to 100,000 won (US$86) per affected user and increase that amount after verifying individual losses. More than 100 customers filed reports with the National Police Agency's cybercrime division and are organizing a class action lawsuit against the exchange.
The state-run Korea Internet & Security Agency and the Korea Communications Commission are investigating the hack, according to Yonhap news agency.
