A comparison of developments in crypto law

Examining developments in cryptocurrency law around the region is like taking a litmus test to measure the flexibilty and depth of competency of these legal systems. staying up to speed is crucial

SOUTH KOREA

Will Korea deregulate digital currency? South Korea is one of the world’s most significant markets for blockchain technology companies. At the end of 2018, the Korean Won accounted for 16% of the global Bitcoin/fiat market.

However, a cooling off of trading activity in 2018 and a lack of clearly laid-out regulation are both causes of concern for the nation’s digital currency market.

Michael Kim
Lawyer
Kobre & Kim in Seoul
Tel: +82 2 369 1212; +1 212 448 1201
Email: michael.kim@kobrekim.com

Despite its leading role in the digital currency markets, South Korea has not yet implemented formal regulatory and taxation measures for trading these currencies. In reaction to the speculative mania that swept Korea’s cryptocurrency market in 2017, South Korean regulatory authorities maintain their blanket ban on initial coin offerings (ICOs).

An increase in trading activity typically compels regulators to establish clear trading guidelines, but Korea’s digital currency market in 2018 was anything but bullish, with three of the “big four” Bitcoin exchanges all recording losses by the end of the year. With investors looking to take their digital assets to other jurisdictions (including offshore), the market has arguably seen better days. However, there are some indications that Korea’s regulatory authorities are finally preparing clear legal guidelines.

Regardless of recent market woes, with its high-tech economy and receptiveness for new technology, South Korea remains one of the world’s most significant markets for cryptocurrency and blockchain companies. As the market continues to move up and down, the evolution of South Korea’s digital currency regulation will be one to watch, and promises to have a significant impact on global digital currency markets.

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