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South Korea’s Ruling Party Appears to Increase Leniency on Crypto

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Namdaemun Market, Myeongdong Seoul. Source: Pixabay.com

The ruling South Korean Democratic Party’s task force on cryptocurrency is deliberating a plan to institutionalize corporate crypto transactions on the nation’s nine leading crypto exchanges. This is yet another sign of impending regulatory leniency.

Details from a key meeting held last month between the task force and exchange chiefs have revealed the party may be looking to make a few concessions to the industry.

According to Herald Kyungjae, the exchanges’ CEOs at the meeting strongly disparaged the government’s regulations, which imposed banking, information management, and anti-money laundering rules on their trading platforms.

The CEOs blamed the government and the party for driving them to closure, as none of the exchanges have yet to comply with all regulations fully.

Nonetheless, the task force still pledged to help bolster the sector. They are aware that most of its key supporters are investors in cryptocurrency and quickly losing confidence in the party ahead of the 2022 general elections.

Exchanges agreed that the industry and the had to agree on dealing with corporate clients’ transactions and non-Korean trading platform users.

At the moment, all leading exchanges have rules of dealing with corporations and non-citizens, but all stakeholders agreed that there should be regulatory clarity if the process were institutionalized.

The task force will also consider requests from the exchanges to settle their tax bills in crypto and not fiat. Exchanges have large cryptocurrency holdings, and starting from January 1 next year, they will have to declare and pay tax in KRW. The exchanges’ CEOs asked to pay the government in cryptocurrencies such as bitcoin (BTC).

In the meantime, a new private bill is set to be handed to parliament proposing granting the exchanges six additional months of grace period to comply with the long list of requirements to allow them to continue their operations.

The bill’s architect is MP Yoon Chang-hyeon, who is in the main opposition People’s Power Party. TV Chosun quoted Chang saying that he would present the bill to parliament by the end of the week.

Other opposition leaders say that the government should act fast to avoid a shutdown crisis if the firms fail to meet the September 24 deadlines and are forced to close and risk penalties or imprisonment.

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