South Korea has increasingly become the leading crypto regulatory nation by bringing crypto exchanges and businesses under the purview of the law. The country became one of the first to introduce the latest Anti-Money-Laundering (AML) regulations that led to the closure of hundreds of small and medium crypto exchanges.
In a bid to eliminate crypto use for illicit activities and money laundering, now South Korea is planning to ban all virtual currency transactions originating from anonymous sources. The country’s regulatory body has prosed a new “Travel Solutions Rule.”
Korean Gov: I'm going to prohibit withdrawals from Korean exchanges to non-KYC'd wallets like Metamask by March 2022.
Degens: So no more DeFi, NFT, DAO for Koreans? 😞
Korean Gov: No exceptions. Every blockchain wallet must be KYC'd.
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Nice job Korea!https://t.co/i4Hicr9pEO
— Ki Young Ju 주기영 (@ki_young_ju) December 10, 2021
The new Travel Solution Rule would prohibit withdrawals from Korean exchanges to non-KYC’d wallets such as Metamask from March 2022. The regulatory agency said, post the deadline there will be no exceptions.
“In the future, when exchanges transmit virtual assets such as Bitcoin or Ethereum, ‘who sent and who received’ records are kept. Transfers will only be possible between ‘licensed exchanges’.”
The local news reported that a total of 14 exchanges in South Korea is yet to apply for a license under the new regulations. The fourteen exchanges include the four major crypto platforms including Upbit, Korbit, Coinone, and Bithumb. The regulatory body also said the new rules would prevent tax evasion.
South Korea Leads the Regulation Race
A majority of nations are still taking in inputs to formalize regulations for the crypto market, while South Korea is already leading the space with some of the strictest policies for crypto platforms. It is also one of the few nations to impose a separate crypto tax which was postponed recently to next year. Once it comes into effect, traders in-country would have to pay a 20% tax on their crypto gains.
South Korea is also looking to become the first nation to regulate the NFT market. A regulator has recently said that the NFT market cannot be put under the same rules as crypto assets and the government is looking to tax the digital collectible market.
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