South Korea has imposed stricter regulations on the use of cryptocurrencies effective by March 25, according to an announcement by a popular daily news outlet Korean JoongAng Daily. This comes after a market increase wherein Bitcoin’s value soared to a new all-time high of $61.5K, prompting more people to invest in cryptocurrency.
Due to the market craze, the South Korean government released an amendment for Reporting and Using Specified Financial Transaction Information, requiring all businesses that buy, sell or exchange digital assets to report all transactions to the Korean Financial Services Commission (FSC) effective on March 25, 2021.
The FSC warned crypto startups could face a possible shutdown if they don’t comply with the rules. ‘Customers should check the registration status of the existing operators and whether the business will continue to run before making virtual asset transactions so that they do not suffer damage,’ the FSC declared.
Crypto investors will be given six months to comply with the rules and report all transactions to the FSC. New businesses, on the other hand, must first report to the FSC and gain clearance before starting operations.
In the statement released by Korea JoongAng Daily, those who fail to comply will face up to five years of imprisonment or fines of up to 50 million won ($44,200). These rules are to be strictly enforced to avoid illegal activities such as money laundering.
The Reporting and Using Specified Financial Transaction Information amendment is the latest addition to the digital asset landscape of Korea. It is one of the many rules that the FSC has imposed since 2017.
The South Korean government passed regulations and legalization of the use of cryptocurrencies and exchange sites in March 2020 that have since remained unchanged.
According to reports by CoinTelegraph, South Korea’s new digital asset tax regulations are still in the works and will be implemented come January 2022. This includes a 20% tax on bitcoin and capital gains tax for profits above $2,300. The government expects that the value and interest in cryptocurrencies will continue to rise by then.
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