South Korea halts ‘all work’ on crypto regulations amidst martial law aftermath

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As a seasoned crypto investor with roots deeply embedded in South Korea, I find myself grappling with a sense of dismay and concern over the current state of affairs regarding cryptocurrency regulations in my homeland. The recent turmoil, including martial law and impeachment plans, has undeniably cast a long shadow over the crypto industry, pushing discussions on regulations to the backburner.

It appears that the South Korean parliament has temporarily halted any discussions about cryptocurrency regulations, due to the events following martial law and the proposed impeachment of the current president.

Based on a report from Chosun, an official from South Korea’s National Assembly has shared insights on the current status of the nation’s cryptocurrency regulations. The report suggests that these regulations have essentially been shelved due to the impeachment matter, which means a vote on them is unlikely at this time.

An anonymous authority indicated that delays are likely for legislations concerning digital assets, as these matters are on hold until the current impeachment process concludes. The forecast suggests that talks about cryptocurrency regulations will recommence in the early part of 2025.

Given that martial law has absorbed the focus of the National Assembly, it’s challenging to predict, yet addressing this matter appears to be our priority, despite the numerous bills concerning virtual assets.

The bills in question include South Korea’s initial coin offering ban, the issuance of real-name accounts for crypto trading, the decision to give local companies permission to add cryptocurrencies to their balance sheets, Bitcoin (BTC) spot ETF approval, and a legislation on securities token offering.

One piece of legislation that narrowly avoided being impacted by the aftermath of martial law is the plan to postpone the implementation of the crypto tax regulation until 2027. This bill was discussed on December 4th and secured a majority vote in the National Assembly on December 10th, which happened to be the final day of ordinary sessions before the council shifted entirely into “impeachment mode.

If the National Assembly failed to approve the bill before December 10th, the crypto tax legislation would automatically take effect on January 1st, 2025.

Additionally, the Financial Services Commission of South Korea is adopting a comparable strategy. They have recently concluded the necessary guidelines for corporate crypto accounts following recommendations from their Virtual Asset Committee. These new regulations are scheduled to take effect this month.

Following the unrest caused by the implementation of martial law, financial institutions have opted to rein in digital currencies and instead focus their attention on conventional financial systems. These systems encompass securities like stocks, bonds, money market instruments, and foreign exchange markets.

In South Korea, the crypto sector has consistently advocated for stricter regulations that cater to both individual and corporate cryptocurrency trading, expressing concerns over unclear rules and insufficient protection.

Due to the government’s prolonged delay in establishing regulations for cryptocurrencies, South Korea might lag behind nations such as the U.S. and Hong Kong, which are swiftly developing their regulatory structures for digital currencies. This situation has sparked increasing apprehension that local crypto companies and investors could be compelled to relocate abroad due to the martial law scenario.

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2024-12-11 13:33