South Korea FSS says that Cryptocurrency is Not ‘Actual Currency’, and Should Not Have Regulations

The FSS, or the Financial Supervisory Service which is a South Korean financial regulator has stated that it doesn't currently doesn't have any plans to place regulations on the trade of cryptocurrencies such as Bitcoin, Ethereum, and Steem. According to “rules announced last week”, the FSS based its decision on the fact that it doesn't consider cryptocurrency to be a substitute for fiat money, as they are not legal tender in the country.

During a recent press conference on the matter, Choe Heung-sik (FSS Governor), mentioned that the only thing they should do in the digital currency realm is to warn warning the public about potential risks stating: “All we can do is to warn people as we don’t see virtual currencies as actual types of currency, meaning that we cannot step up regulation for now.”

He also mentioned that the introduction of any digital currency regulation in S. Korea will only promote its trading, as investors will start to think that the FSS already recognizes digital currency as “actual” currency.

The governor's statements seem a lot like his previous remarks. He said in November 2017 that the FSS won't directly monitor the activities and operations of cryptocurrency exchanges since the digital currencies being traded aren't considered to be legal tender in the country.

Given its stance on the issue, the government was content issuing several rules instead of placing regulations to oversee S. Korea's cryptocurrency industry.

In the past, major exchanges in the country got ready to go through several regulatory and compliance steps if the FSS decided to move in that direction.

Besides a number of rules that have already been issued, the National Tax Service (NTS) is currently putting together a way to effectively collect taxes on cryptocurrency trading transactions.

The NTS will likely enact capital gains taxes on individuals and companies who trade cryptocurrencies.