South Korea FSS: Cryptocurrency Not ‘Actual Currency,’ Should Not Be Regulated

December 20, 2017 6:23 pm Published by

South Korea’s financial regulator presently has no plans to regulate the trading of digital currencies such as Bitcoin beyond “rules announced last week,” Cointelegraph reported Wednesday.

Financial Supervisory Service (FSS) based its decision on not considering digital currencies to be a substitute for money, since they are not legal tender in the country, the report said.

FSS Governor Choe Heung-sik said at a news conference the only role the regulator should play in the digital currency space is warning the public about potential risks.

“All we can do is to warn people as we don’t see virtual currencies as actual types of currency,” he said, “meaning that we cannot step up regulation for now.”

In addition, he said, the introduction of any cryptocurrency regulation in the country will only promote digital currency trading, as investors will think the watchdog already recognizes cryptocurrency as “actual” currency, the report said.

The FSS, he said in November, will not directly supervise the operations and activities of digital currency exchanges since the virtual currencies being traded are not legal tender in the country, the report said.

Instead, the government was content issuing several rules – rather than establishing firm regulations – to oversee the local Bitcoin and digital currency industry.

In the past, major exchanges were ready to undergo all sorts of regulatory and compliance steps should financial regulators decide to take action, the report said.

Apart from a number of already issued rules, the National Tax Service (NTS) is currently drafting a framework on how to effectively collect taxes on cryptocurrency trading transactions, the report said.

The NTS will most likely introduce capital gains taxes on companies and individuals who trade digital currencies, the report said., Jack Durschlag

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