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Reports are emerging that the South Korean government is considering a proposal to impose fines on employees of cryptocurrency exchanges for trading digital assets.
According to a report by local media outlet Yonhap News Agency on June 7, Korea is promoting a plan to impose a fine of no more than 100 million won ($ 90,000) on cryptocurrency exchange operators and employees. . Penalties can be imposed if employees are caught trading on their own exchanges.
The move follows a May 28 government announcement that said it would ban companies, executives and employees from trading virtual assets through their own exchanges.
The edict was taken in order to prevent price manipulation by crypto exchange operators. South Korea is well known for its Kimchi Bounty in which the price of Bitcoin on local exchanges can be much higher than elsewhere in the world.
The report adds that the Financial Services Commission (FSC) recently met with discussions to explain the plan to amend the decree to include fines for violations.
The crypto tax authorities are coming
At the end of May, the Korean government announced its intention to start levying a 20% tax on crypto transactions from 2022. As reported by BeInCrypto, transfers unrelated to the sale of ownership of crypto assets will be subject to statutory gift and inheritance rates of up to 50%.
South Korea’s Finance Minister Hong Nam-ki has maintained his position that crypto assets cannot be recognized as currency and their market values cannot be guaranteed.
Also in late May, South Korea’s central bank voiced the usual concerns and well-known warnings that trading in cryptocurrencies could endanger the country’s entire financial system. This is not surprising given that most central banks are wary of the increasing prevalence of a financial vehicle that they cannot control.
The changing landscape
New legislation that will force crypto exchanges to partner with banks to ensure legitimacy and provide mandatory Know Your Customer (KYC) requirements is expected later this year.
Many crypto exchanges operating in the country are struggling to meet these ever-increasing demands from regulators. The once crypto-friendly country appears to be taking a tougher approach on digital assets despite huge demand from Korean traders and investors.
Koreans still want their digital currency patches and, according to a report, many younger generations still see them as a last chance to escape their current social status as confidence in traditional investments wanes.
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