South Korean regulators are seeking cooperation with counterparts from Beijing and Tokyo to address cryptocurrency speculation. Six commercial banks have been targeted by Seoul authorities inspecting crypto trading. Korean experience is to help a possible trilateral approach to regulation.
“Trial-And-Error” to Shape the Efforts
The Financial Services Commission of South Korea will be deepening cooperation with agencies from China and Japan in curbing speculative transactions. Deputy finance ministers from the Asian countries have already exchanged ideas last month, FSC’s chairman Choi Jong-ku revealed during a press conference. Seoul aims to “set up a detailed system of cooperation” with Beijing and Tokyo, Choi said, quoted by Yonhap News Agency. The nation’s top financial regulator briefed media about the bank inspection that will run through Thursday with the participation of the Korean Financial Intelligence Unit. He warned against what he called an “irrational trend” of investing in cryptocurrencies, noting the “ongoing fever of speculative investment”.
In Choi’s words cryptocurrencies are unable to play a role as a means of payment. “A virtual currency only triggers side effects”, the regulator educated reporters. Fraud, illegal fundraising, hacking, speculation and manipulation of market prices were mentioned in a long list. The government official left the door open to shutting down all cryptocurrency-linked businesses to minimize the aforementioned effects, according to the Korean Herald. Choi Jong-ku said the world was facing a “policy challenge pandemic” and added that Korea’s “trial-and-error” experience can help shape trilateral efforts to implement regulations.
Trust, but Verify the “Gatekeepers”
South Korea’s financial regulator is currently conducting inspections in six commercial banks, including Woori, Kookmin and Shinhan. Accounts of cryptocurrency traders have been targeted. Last month authorities ordered banks to stop issuing the so called “virtual accounts” used by cryptocurrency exchanges to manage their clients’ money. A new system to end anonymous trading and enforce real name identity verification on traders is to be implemented by the end of January…