n a recent move, South Korea's Financial Services Commission (FSC) has proposed a ban on using credit cards for purchasing cryptocurrencies on foreign exchanges. This proposal comes as the government aims to address concerns over illegal outflows of funds, money laundering, and speculative behavior in cryptocurrency trading.
Concerns over Illegal Outflows and Money Laundering
The FSC has highlighted concerns about the illegal outflow of domestic funds overseas due to card payments on overseas virtual asset exchanges. This phenomenon has raised concerns about money laundering, speculation, and the encouragement of speculative activities. By restricting the use of credit cards for crypto purchases, the FSC aims to strengthen the prevention of foreign currency outflow and money laundering.
The proposed ban on crypto purchases with credit cards is part of an amendment to the Enforcement Decree of the Credit-Specialized Financial Business Act. The amendment seeks to restrict the use of credit cards specifically for purchasing cryptocurrencies on foreign exchanges. The FSC believes that this measure will help curb the risks associated with crypto trading and protect investors.
Public Feedback Period and Implementation Timeline
The proposed amendment is currently open for public feedback until February 13. This feedback period allows individuals and organizations to provide input and comments on the proposed ban. After the feedback period, the amendment will undergo review and be voted on. The aim is to implement the new rules in the first half of 2024.
In a separate development, an anti-corruption probe in South Korea has uncovered substantial cryptocurrency trading activities among the country's lawmakers. Over the past three years, lawmakers collectively traded virtual assets worth approximately 125.6 billion won ($97.6 million). The probe identified 18 lawmakers who owned virtual assets, with 11 of them actively trading. Bitcoin was the most popular cryptocurrency traded, and the report highlighted the diverse portfolio of virtual assets held by lawmakers.
