South Korea to Relax and Clarify Cryptocurrency Regulation

South Korea will “soften” its stance on cryptocurrency in the coming weeks, according to a new report.

Late last year, South Korea banned ICOs and implemented new rules, forcing investors to verify their identity to trade crypto on virtual accounts opened at local banks. The crackdown sparked a major public backlash and a petition with hundreds of thousands of signatures calling for a review of the government’s regulations on cryptocurrencies.

Regulators in the country are now working to reclassify cryptocurrencies and confirm their status as financial assets, as the government shifts its focus from restricting cryptocurrency trading activities to the more positive aspects of digital assets, according to The Korea Times.

“Unified regulations” are expected to emerge in July, when the G20 finance ministers and central bank governors reach their decision about cryptocurrencies. The G20 is a group of countries representing about two-thirds of the world’s population and 85% of global gross domestic product, with interest in cryptocurrencies spreading across all nations.

“It’s almost certain that cryptocurrencies will be classified as assets and the main issue will be centered on how to regulate them properly under the unified frame that will be agreed upon between G20 nations,” said the Financial Supervisory Service (FSS), South Korea’s primary financial regulator.

A week ago, the incoming chief of the FSS, Yoon Suk-heun, first alluded to the coming changes.

“Regarding cryptocurrencies, there are some positive aspects,” Yoon told reporters. “The FSS will collaborate with the FSC (Financial Services Commission) when an inspection on policies and financial institutions has different configurations associated with different scopes. FSC inspects policies, while the FSS examines and supervises financial institutions but with the oversight of the FSC.”

Political leaders in South Korea have also proposed new legislation that would legalize initial coin offerings.