Digital screens in Seoul show that a bitcoin was worth more than 70 million won ($62,600) March 14. (Yonhap)
The South Korean government said on April 19 that it will tighten regulations to root out illegal cryptocurrency transactions and fraud amid growing concerns over a speculative bubble in the virtual coin market.
The announcement was made after a meeting among top government officials and economy-related ministers on Friday to discuss issues related to the highly volatile cryptocurrency market and alleged crypto crimes.
As part of the government’s efforts, the state watchdog the Financial Services Commission has asked financial firms to carry out enhanced monitoring to uncover any money laundering cases using digital coins.
Under the toughened regulations, Korea’s financial firms will have three days to report any suspicious transactions to the state-run Korea Financial Intelligence Unit. Upon receiving a report, the KoFIU must swiftly launch a joint investigation with the police and tax authority, said the Office for Government Policy Coordination, which led Friday’s meeting.
The Korea Fair Trade Commission, the nation’s antitrust regulator, will look into whether local cryptocurrency exchanges have adopted contract terms deemed unfair to individual customers while the Ministry of Economy and Finance will look for illegal money remittances made via crypto assets.
“Individuals should make careful decisions related to cryptocurrencies as crypto assets, which have no intrinsic value, are means of speculation rather than investment,” said Gu Yoon-cheol, chief of the Office for Government Policy Coordination.
Meanwhile, the combined value of altcoins, referring to cryptocurrencies other than Bitcoin, increased more than five times this year, according to data on April 19.
The Upbit Altcoin Index, or UBAI, which shows the movements of altcoins in the market, surpassed 9,000 on Saturday for the first time since related data has been recorded by local crypto exchange Upbit starting in 2017. The index, which remained at 8,500 on Monday, was 1,707.52 on Dec. 31.
Among the altcoins, Ethereum, which has a 41.35 percent weight in the index, has seen its value soar 280 percent this year.
According to local crypto exchange Bithumb, its own altcoin index shows that the combined value of altcoins jumped 4.69 times, as the index increased from 899 on Dec. 31 to 4,218 on April 16.
By Kim Young-won (email@example.com)