Korea decides to support cryptocurrencies

Korea’s financial regulator said Tuesday the government will support “normal transactions” of cryptocurrencies, about three weeks after it banned their trading through anonymous bank accounts. The remarks by Choe Heung-sik, governor of the Financial Supervisory Service, were seen as being in stark contrast to the government’s previous stance that it could consider shutting down local virtual currency exchanges. Korea launched a real-name trading system for cryptocurrency transactions Jan. 30 to prevent virtual coins from being used for money laundering and other crimes. The system was also the government’s latest measures to curb speculative investment in virtual coins. Choe recently held a meeting with representatives from cryptocurrency exchanges during which he said the government “will support [cryptocurrency trading] if normal transactions are made.” Currently, local banks have been reportedly reluctant to open virtual accounts for cryptocurrency trading amid the government’s crackdown. Choe said the government will “encourage” banks to make transactions with cryptocurrency exchanges.

Despite a boom in cryptocurrency transactions, the exchanges go largely unregulated in Korea as they are not recognized as financial products, with the country having no rules for protecting virtual currency investors.

Written by Brad Chillum

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