South Korea's New Regulations Could help Bring Us Out of the Dark Ages of Cryptocurrency
Do we need to define how our society will handle cryptocurrencies? Yes, otherwise how can it grow?
South Korean regulatory plans that will be put into effect today will be some of the first steps into introducing mainstream adoption. Many skeptics of these regulations have been silent and others have seen this move as a positive one.
On Jan. 23, the regulator said it would allow trade in cryptocurrencies from bank accounts that have been verified under KYC regulations starting January 30th. The regulations are aimed at preventing, or at least slowing down, financial crimes which use cryptocurrencies as a crutch for their illegal operations.
For those unfamiliar, Know Your Customer laws in many countries are gathering basic user information for a couple reasons.
Taxes. While exchanges will not hand over data for each user. They must retain information so that when a governing body needs the information, they can simply request the information via a subpoena or warrant. Most of us will not have that happen. But if you are a whale avoiding taxes, perhaps you should start paying them.
Reduced liability for corporations who allow users to have greater freedoms in their systems.
Legacy laws can easily be applied should a death occur and the digital assets can be handed down to family members.
With better regulations, investors (especially older ones) can become more confident in the cryptocurrency space.
"Protocols to protect investors have been what the cryptocurrency markets have been missing and it's what the legislation in South Korea seeks to implement," said John Sarson, a partner at Blockchain Momentum.
"It's a good thing anytime an investment exchange knows their client and makes sure that their clients are doing things that are above board legally," he said.