South Korea’s Bar Association Urges Regulatory Changes in the Crypto Market

Asia is a region wherein cryptocurrencies thrive.  And among the main players in Asia today is South Korea.  South Korea is at the forefront of the changing crypto market.  What makes South Korea unique is the high demand for cryptos.  It is known for its Kimchi Premium, which is a higher price for cryptocurrencies when sold in South Korea. 

South Korea is also at the epicenter of today’s regulatory changes considering how its crypto exchanges have been hacked.  South Korea’s lawyers have lobbied that the government establishes a legal framework that will protect investors. 

The Korean Bar Association has campaigned for the regulatory changes to take place.  This is quite a rare occasion considering how the Korean Bar Association rarely campaigns for a specific tech or business interest group. 

Home to Top Crypto Exchanges

South Korea today is home to top crypto exchanges in the world today.  Among which are Coinbit and Bithumb.  The government has been criticized mainly for the lack of regulation in the niche. 

In a statement by the Bar Association President Kim Hyun, “We urge the government to break away from negative perceptions and hesitations, and draw up bills to develop the blockchain industry and prevent side effects involving cryptocurrencies”. 

However, you can’t expect that this is going to happen any time soon.  In fact, the government is only willing to make the necessary changes once it has reviewed everything. 

Regulatory Clarity

One of the top stories of 2018 is regulatory changes that are happening in different parts of the globe.  Partly, it is due to the possibility of cryptocurrencies being used as a means for money laundering and other illicit activities. 

Japan is among the countries that are quite serious when it comes to regulatory changes.  It has welcomed cryptocurrencies but imposed strict rules and regulations that police crypto exchanges and their operations.  Japan announced that the industry could self-regulate via an association of cryptocurrency exchanges. 

These changes didn’t come as a surprise as there were hacking incidents that have targeted Japan-based crypto exchanges.  One of which is Coincheck wherein $500 million worth of cryptocurrencies have been lost. 

South Korean Crypto Exchange Hacking Incidents

South Korea isn’t new to hacking incidents.  There are even reports wherein North Korean hackers are behind some of the largest hacking incidents in the last year and a half. 

Coinrail in June lost approximately around $40 million worth of tokens.  Most notably, the hackers then were able to take around $19.5 million worth of NPXS tokens and $13.8 million from Aston X. On the other hand, you have Bithumb that lost $30 million. 

These are incidences that can compromise users.  There could even be a possibility that a hacking incident is actually an exit scam. 

One of the main reasons why institutional investors are not yet flocking towards the market is mainly due to regulatory concerns.  This is also the reason why the crypto market went bearish since the start of 2018.  Hacking is also a concern from institutional investors, this is the reason why there is the emergence of custodial service providers.  Are we going to see the necessary changes happen in South Korea soon?