Category Archives: Financial Services Commission (FSC)

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South Korea on Edge Thanks to Crypto Bulls

South Korea on Edge Thanks to Crypto Bulls

South Korea state authorities are on high alert following the incredible run for Bitcoin price and the rest of the crypto market since April. Despite a general positivism throughout the industry during the rally, the government there has called a meeting to discuss the possible outcomes for current market conditions.

First reported by local broadcaster KBS World Radio, the meeting was held yesterday, chaired by Minister of the Office for Government Policy Coordination Noh Hyeong-ouk. Officials from the Ministry of Economy and Finance, the Justice Ministry and the Financial Services Commission (FSC, the national market regulator) were reportedly present.

A decision was then taken to closely monitor the market for volatility and prepare actions to mitigate possible ramifications to investors.

Noh reminded the meeting attendants that cryptocurrencies had not yet found a firm legal status in the country. He also urged to pre-empt special conditions that were developing, especially in the face of rising speculation and investor interest, asking to deliberate on the next steps:

“Since virtual currencies are not legal currencies and nobody guarantees their value, the price fluctuates drastically due to illegal acts, speculative demand, and changes in the domestic and foreign regulatory environment. It is necessary to make a careful decision on a series of actions.”

The last two months have seen a rally that has yet to abate, with much of the demand happening in East Asia, with buyers in South Korea willing to pay above KRW 10 million (USD 8,400) today. Earlier in May, South Korean authorities chose to repeal existing draft legislations for anti money laundering in cryptocurrency, choosing instead for a path that would allow for more direct regulations for cryptocurrency exchanges.

 

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Bithumb’s Clean Bill of Health Could Lift Crypto in South Korea

Bithumb, the largest cryptocurrency exchange in South Korea, has been cleared by local financial authorities and the National Tax Service (NTS) of illicit activities, tax evasion, and suspicious business operations, reports CCN.

The South Korean government had been monitoring the exchange, along with UPbit, another of the country’s main exchanges, after investors had expressed concerns. Both companies were then investigated for potential malpractice and suspicious business activities.

It was found that apart from Bithumb being ordered to pay USD 28 million in taxes, neither the NTS, Financial Services Commission (FSC), or Korea Financial Intelligence Unit (KFIU), along with other government agencies could find any evidence of improper practices regarding either company.

According to the NTS, the agency closed its investigation into Bithumb in late April, imposing a USD 28 million tax on the company, this after the three month Seoul investigation involving seizure of various computer files, devices, and information necessary to run a full audit on the exchange’s cryptocurrency holdings and past activities. An NTS spokesman indicated:

“NTS initiated several investigations into Bithumb between 2014 and 2017, and over the past four years, Bithumb has continuously paid all of the taxes imposed to the company without any conflict with the NTS. While a USD 28 million tax was imposed onto Bithumb, no evidence [of] tax evasion and illicit activities were shown and the NTS closed the investigation into Bithumb officially, clearing the company.”

After a 171-fold increase in the company’s profits within a 12-month period, supported by a rapid surge in demand for cryptocurrency in the local market the NTS decided to take action. The agency commented that it wanted to very cryptocurrency company to declare all holdings, be transparent with their bookkeeping and declare their taxes.

The clean bill of health for Bithumb is a boon for the industry as a whole in South Korea. As the largest in the country, the exchange is synonymous with the whole concept of cryptocurrency and represents its successes and failings. Commentators suggest that the investigation clearing Bithumb of any wrongdoing will inject much-needed trust in the crypto space.

 

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