The South Korean government is set to make broad changes to its blockchain regulations, paving the way for a shake-up of the country’s cryptocurrency policies.
Ko Hyung-gwan, the vice minister of the Ministry of Strategy and Finance, has told reporters that the government’s plans will “foster the market” and “stimulate job creation” in blockchain-related industries, although he noted that South Korean fintech ventures “needed a wake-up call.”
Per media outlet eDaily, Ko says the government’s “comprehensive strategy package” for Industry 4.0-related businesses will be announced at a ministerial meeting next week. Many analysts claim that further cryptocurrency-specific regulatory developments will follow after the G20 summit of finance ministers and central bank officials to be held in Argentina later this month and that these may be integrated with Seoul’s new blockchain plans.
The government has been widely criticized for what opponents have termed “inaction” – a failure to regulate exchanges. Public outcry has followed news reports of high-profile hacks and fraud charges at many of South Korea’s leading exchanges.
It is thought that long-awaited blockchain policy reform would also look to address these issues, and Ko attempted to explain the delay, stating, “Regulation is […] important, but it has been impossible to even discuss matters because of the amount of public controversy involved.”
Meanwhile, the largest group of South Korean exchanges, theKorea Blockchain Association(KBA) has completed an inspection of 12 of its members’ security, management, and anti-money-laundering networks, granting them all its seal of approval. The list of exchanges includes market leadersBithumb,Upbit,KorbitandCoinone, as well asHuobi’srecently launchedHuobi Koreaplatform.
However, the checking process was far from bug-free. Two other exchanges decided to pull the plug on their KBA inspections at the midway point, while 18 other members refused to take part in the process.
Others claimed that security tests were lax, and focused mainly on whether or not exchanges used cold wallets – rather than testing network stability against virtual hacks – leaving critics questioning the validity of the exercise.