The Ministry of Justice of South Korea is considering the possibility of a complete ban on trading crypto-currencies and digital tokens in order to protect consumers from fraudulent schemes. This is reported by the Nikkei Asian Review.
Blockchain technology can be applied to a wide range of fields in the fourth industrial revolution. We need to find out ways to adopt this new technology quickly as many other countries are rushing to develop this technology.
Liberty Korea Party, Rep.
To obtain a legal status, a list of rules is introduced, in case of failure of which the organizers of the exchange or developers will be punished with a prison term of up to 10 years or fined up to 500 million won. For money laundering and fraud, violators face a prison for 10 years or a fine in the form of a threefold amount of illegally obtained funds if they exceed 500 million won.
Operations will be legal only if seven conditions are met:
- Deposit of fiat money,
- Keeping a reserve on accounts of third-party companies,
- Explaining the risks of operations with crypto currency,
- Verification of the identity of users,
- The creation of a system for countering money-laundering,
- The organization of protection of cryptographic keys
The government provides a semi-annual grace period for existing exchanges, during which they are obliged to bring their activities within the framework of the law.
It is expected that this initiative of the Ministry of Justice will meet opposition from other institutions. At a meeting with journalists in late November, Finance Minister Kim Dong-Yong spoke out for the development of crypto-currency technologies, calling them the future of the financial industry.