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In response to the recent
speculation frenzy over virtual currency trading and increase in virtual
currency-related crimes, the Korean government announced emergency measures
yesterday, December 13, 2017, the main points of which are summarized below:
- Prohibition on virtual currency trading and
opening of virtual currency account (with the bank or the exchange) by minors
and foreigners, which will be enforced in cooperation with the banks - Reinforcement of FX regulations, e.g., transfer
of virtual currencies disguised as travel expenses will be subject to strict
investigation - Prohibition of any and all virtual currency
transactions (holding, purchasing, taking as security or otherwise investing in
virtual currencies) by domestic financial institutions - Investigation on business activities of virtual
currency exchanges. Exchanges with frequent customer information leakage or unfair
transactions will be suspended from operation and/or receive fines. - Possible tax imposition on trading gains (by
reference to other jurisdictions).
Also, the emergency measures
included the measures announced on September 2 and 31, 2017, e.g., (i) crackdown
on crimes involving virtual currencies, e.g., frauds and illegal collection of
funds, (ii) the prohibition of ICO (Initial Coin Offering), and (iii) other
requirements aimed to increase the security of the exchange and prevent illegal
activities, such as KYC/AML procedure and cryptographic key distribution. For
more information, please see BKL's 9/25 and 9/29 newsletters.
This update is intended as a summary news report only, and not as advice. For legal advice, please inquire with your contact at Bae, Kim & Lee LLC, or the following authors of this bulletin:
Sky YANG
T 82.2.3404.0143
E sky.yang@bkl.co.kr
Jae In LEE
T 82.2.3404.6537
E jaein.lee@bkl.co.kr