At the end of December, a law firm filed their appeal through the Constitutional Court’s online system. This case against the South Korean government over cryptocurrency regulations has been referred to the country’s Supreme Court by the Constitutional Court.
The government insisted that the real-name system is based on the Banking Law and the Financial Information Act. If the court decides that the regulations are unconstitutional, all existing crypto regulations imposed by the government could be cancelled.
According to the lawyer Jeong Hee-chan, the regulation of the trade through administrative guidance without legal grounds is an infringement on people’s property rights. He agrees that crypto regulations are necessary but they should come after the implementation of related laws.
Starting from January 30 of 2018, all the unknown institutions that have virtual bank accounts were limited. This mandatory real-name system for cryptocurrency exchange accounts was implemented by the Finance Service Commission (FSC) in South Korea. According to this policy, traders are not allowed to make deposits in digital accounts if the name of their bank account does not match the account name in the crypto exchange.
Currently, only 8.21% of all virtual accounts at the country’s top four exchanges have been converted into real-name ones. Around 1.6 million accounts remain anonymous. Moreover, banks are only converting accounts for large exchanges such as Upbit, Bithumb, Coinone, and Korbit, leaving smaller exchanges with no way to use the real-name system.
The matter should be concluded within 180 days from the date of filing under the Constitutional Court Act which was on December 30. Therefore, the case is expected to conclude by the end of June.