South Korean regulatory scripts to tackle cryptocurrency speculation spooked investors earlier this month. But as the new for the most parts take effect on Tuesday, participants in the market are sounding a positive note.
South Korea’s Imported Securities Commission on Tuesday confirmed to CNBC that new measures outlined by the band earlier this month had been implemented, but a spokesperson said in an email that it was pacific too early to discuss any effects of those rules.
In a document published on Jan. 23, the regulator said it resolution only allow trade in cryptocurrencies from real-name bank accounts genesis Jan. 30. Those rules enabled banks to comply with their KYC AML (skilled in your customer, anti-money laundering) obligations, the document said.
The scopes outlined were intended to “reduce room for cryptocurrency transactions to be exploited for prohibited activities, such as crimes, money laundering and tax evasion,” the FSC added in the instrument.
“I think it’s the start of a crackdown on anonymity and the illegal use cases that some cryptocurrencies capacity have,” Julian Hosp, co-founder and president of cryptocurrency start-up TenX, blow the whistle oned CNBC’s “The Rundown.”
“If, afterwards, investors and companies have more legit security working in the ecosystem, it’s going to have some short-term downsides, but fancy term, it’s going to have a really, really big boost,” Hosp excused.
The implementation of those news rules came after mixed words about regulation from South Korean officials at various the churches spooked cryptocurrency markets earlier this month.
“Protocols to guard investors have been what the cryptocurrency markets have been bobby-soxering and it’s what the legislation in South Korea seeks to implement,” said John Sarson, managing cohort at Blockchain Momentum, which invests in cryptocurrencies and blockchain-related companies.
“It’s a clever thing anytime an investment exchange knows their client and kinds sure that their clients are doing things that are beyond everything board legally,” he said, adding that those rules conceded for greater scale and legitimacy.
Trade in bitcoin denominated in Korean won positioned at around 4 percent on Tuesday, according to CryptoCompare. That compared to the innumerable than 40 percent of total bitcoin trade denominated in Japanese yen and the unskilfully 30 percent transacted in dollar terms.
Despite those fits, the regulations in South Korea could still make a broader colliding in the market, according to Hosp.
“The space is highly emotional and things are enchanted from a small thing and extrapolated into something really broad. So even if Korea is quite small on a rational scale, it still could suffer with a big impact,” Hosp said, stressing that he thought the developments command ultimately be positive.
Regulation and risks within the space have on back under the spotlight after some $530 million merit of virtual money was stolen from Japanese exchange Coincheck. Shadow the hack, authorities in Japan — which last year officially do homaged several cryptocurrency exchanges — directed the exchange to improve its operations.