People from the People Power Party's Virtual Asset Special Committee and Exchange Officials Gather for On-Site Meeting
[Asia Economy Reporter Gong Byung-sun] One month before the enforcement of the amendment to the Act on Reporting and Using Specified Financial Transaction Information (the Specified Financial Transaction Information Act, or Specified Act), cryptocurrency exchanges gathered to urge an extension of the business registration deadline under the Specified Act. The People Power Party, having listened to the exchanges' opinions, stated that it would consider various measures to prevent the sudden expulsion of cryptocurrency exchanges and to protect investors.
On the 25th, cryptocurrency exchange Probit announced that a meeting was held at its headquarters in Gangnam-gu, Seoul, with the People Power Party's Special Committee on Virtual Assets and representatives from cryptocurrency exchanges. Attendees included lawmakers Yoon Chang-hyun, Yoon Jae-ok, Yoon Joo-kyung, Sung Il-jong, Jo Myung-hee, and Lee Young.
The cryptocurrency exchanges expressed disappointment over the lack of trust from financial authorities. Kim Seong-a, CEO of Hanbitco, said, “When we talk with the authorities, they say we lack self-regulation capability,” adding, “The cryptocurrency industry established the Korea Blockchain Association in 2018 and created self-regulatory measures based on the Financial Services Commission’s guidelines.” She also noted, “Communication with financial authorities is not smooth, and the official announcement of guidelines is unclear.”
There were also criticisms that the Specified Act imposes regulations only on the industry rather than protecting consumers. Lim Hyo-seong, CEO of CoreDAX, emphasized, “The Specified Act is an anti-money laundering law, not a consumer protection law,” and added, “There are many consumers using cryptocurrencies now, and forcibly shutting down exchanges would cause consumer harm and significant social confusion.” He also urged for a one-point legislative process for the Specified Act amendment proposed by lawmakers Yoon Chang-hyun and Jo Myung-hee. Currently, lawmakers Yoon Chang-hyun, Jo Myung-hee, and Lee Young have proposed a bill to extend the registration deadline for cryptocurrency exchange operators by six months.
Opinions were also raised that regulations hinder innovation. It was pointed out that the know-how accumulated over a long period of operating exchanges would be lost in an instant. Heo Baek-young, CEO of Bithumb, argued, “Cryptocurrency exchanges have accumulated technology and know-how to mediate transactions based on blockchain,” and claimed, “More blockchain-based technologies will emerge, and I believe the number of exchanges needed domestically is between 300 and 500.”
Concerns were also voiced that regulations could lead to industry stagnation. Lee Cheol, CEO of Foblegate, said, “Currently, cryptocurrency exchanges are treated on par with casinos,” and added, “Each small and medium exchange employs several dozen people, and if exchanges shut down or reduce staff, about 2,000 people will lose their jobs.” He further explained, “In Singapore, about 170 companies have registered, and financial authorities continuously monitor them.”
In response, People Power Party lawmakers stated they would convey the industry's voices to the authorities. Lawmaker Jo Myung-hee said, “The public is suffering, but the government does nothing and just taxes,” and added, “I hope the financial authorities institutionalize, systematize, and stabilize the cryptocurrency industry.” Lawmaker Lee Young emphasized, “For the financial authorities to renew market order, it is necessary to defer the business registration deadline and use that period to organize and improve the industry.”
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