In early January 2023, the Financial Services Commission of Korea (FSC) made several very important decisions. A legislative notice issued on January 3 revealed the Financial Services Commission’s (FSC) concerns about the potential for money laundering and illicit fund outflows related to Koreans acquiring cryptocurrencies from foreign exchanges.
As a solution to this problem, a revision to the Enforcement Decree of the Credit Finance Business Act was proposed. The main purpose of this amendment is to ban the use of credit cards for cryptocurrency purchases, with a particular focus on transactions taking place on international exchanges. The implementation of this measure is part of a broader plan to strengthen the rules of the Bitcoin industry.
Additionally, the Financial Services Commission (FSC) recommended amending the Credit Finance Act, which essentially prohibits individuals in South Korea from using credit cards to purchase cryptocurrency. These efforts come in line with the government’s larger plan to more strictly regulate cryptocurrency businesses. At the end of January 2023, the Ministry of Justice announced that it would develop a ‘virtual currency tracking system’ to prioritize the development of this system. The purpose of this system is to stop operations related to money laundering and make this possible through cryptocurrency.
South Korea’s approach to cryptocurrency regulation will undergo significant changes in 2023. As recently announced by the Financial Services Commission (FSC), the Law on Protecting Virtual Asset Users has just been passed. Regarding the cryptocurrency sector, the law emphasizes user safety, transaction transparency, and market discipline related to the industry. Additionally, a new, comprehensive cryptocurrency law is scheduled to be introduced in Korea by 2024 with the goal of institutionalizing the cryptocurrency industry.
Starting in April 2023, the Korean National Assembly is expected to enact legislation governing the digital asset market. This new development follows the introduction of 18 laws related to digital assets that are currently being discussed in the Political Affairs Committee of the National Assembly of the Republic of Korea.
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