South Korea Cracks Down on Cryptocurrency, Credit Card Purchases Banned

At the beginning of January 2023, the Financial Services Commission (FSC) of South Korea made several decisions that were quite important. A legislative notice that was published on January 3 brought to light the worries of the Financial Services Commission (FSC) over the possibility of money laundering and illegal financial outflows that are associated with South Koreans acquiring cryptocurrencies from foreign exchanges.

As a result of these issues, a change to the Enforcement Decree of the Credit-Specialized Financial Business Act has been proposed as a potential solution. The major objective of this amendment is to prohibit the use of credit cards for the purchase of cryptocurrencies, with a particular emphasis on transactions that take place on international exchanges. The implementation of this action is a component of a more comprehensive plan to strengthen rules in the bitcoin industry.

In addition, the Financial Services Commission (FSC) has recommended a modification to the Credit Finance Act, which would essentially bar individuals of South Korea from purchasing cryptocurrencies using credit cards when they make purchases. In line with the government's larger initiatives to regulate the cryptocurrency business in a more severe manner, this endeavor is being undertaken. Late in the month of January 2023, the Ministry of Justice made the announcement that they will be developing a "Virtual Currency Tracking System," prioritizing the development of this system. It is the intention of this system to put a stop to operations that involve money laundering and are made possible by cryptocurrency.

South Korea's approach to the regulation of cryptocurrencies will undergo a substantial transformation in the year 2023. Act on the Protection of Virtual Asset Users was just passed, as was recently stated by the Financial Services Commission (FSC). With regard to the cryptocurrency sector, this Act places an emphasis on user safety, transaction transparency, and market discipline with regard to the industry. In addition, new and comprehensive cryptocurrency law is going to be introduced in South Korea by the year 2024, with the goal of further institutionalizing the cryptocurrency industry.

From the month of April 2023 forward, it is anticipated that the South Korean parliament will enact a measure that would govern the market for digital assets. This new development follows the introduction of 18 laws pertaining to digital assets, which are presently being discussed in the Political Affairs Committee of the National Assembly of South Korea.