Restricting credit card use aims to curb illegal fund outflow and speculative behaviour, seeking public feedback.
The Financial Services Commission (FSC) of South Korea has proposed a significant amendment to the Credit Finance Act, aiming to limit credit card usage in cryptocurrency transactions. This strategic manoeuvre intends to prevent local citizens from buying cryptocurrencies on foreign exchanges to curb illegal fund outflow, money laundering, and speculative practices.
Addressing Concerns: South Korea FSC’s Plan
The proposed amendment specifically targets the illegal outflow of domestic funds through card payments on virtual asset exchanges. The FSC, recognizing concerns regarding money laundering and speculative activities, seeks to broaden the restrictions on credit card payments, aligning with international standards and bolstering anti-money laundering (AML) measures.
Seeking Public Input and Expected Timeline
The FSC is inviting public opinions on the proposed amendment until February 13, 2024. It encourages citizens, organizations, or entities to share their perspectives through the Center for Participatory Legislation. The regulatory body aims for a thorough consideration of diverse viewpoints, with plans to review and potentially implement the amendment in the first half of 2024.
Recent Developments and Clarity in Crypto Taxation
Separately, the National Tax Service in South Korea has clarified its stance on virtual assets. Individuals holding virtual assets through non-custodial, decentralized wallets, including cold wallets, will not be subject to overseas financial account reporting. This announcement provides much-needed clarity for those involved in decentralized crypto wallets in the country’s evolving crypto landscape.
The FSC’s move indicates a proactive stance in regulating the crypto market while seeking public engagement, intending to curb illicit financial activities and promote a safer investment environment.
Disclosure: The opinions expressed in this article are for informational purposes only and do not constitute financial advice.