South Korean Govt. Planning to Recognize Crypto Exchanges as Regulated Financial Institutions

As per the local South Korean media channel, the country’s government is planning to recognize the cryptocurrency industry by categorizing them into three divisions and crypto exchanges as crypto asset brokerage, the draft of which will be released by July end.

Legalizing the crypto market?

According to the local South Korean media channel, The BChain, the government of the country in first of its kind move will be potentially legalizing the cryptocurrency market by recognizing the crypto exchanges as the regulated financial institutions. The government will categorise these exchanges as crypto asset exchanges and brokerage.

Joseph Young, the crypto influencer also shared on Twitter.

For the first time, the gov’t of South Korea will recognize crypto exchanges as regulated financial institutions.

Previously, crypto exchanges were considered as “communication vendors.” Now, they are categorized as crypto asset exchange and brokerage.https://t.co/RJYYLaOLv0

— Joseph Young (@iamjosephyoung) July 5, 2018

According to the rough translation of the article, this is the first time South Korean government has recognized cryptocurrency market as an industry and will be announcing an industrial classification system this month.

Apparently, cryptocurrency exchanges to be classified as “encryption asset brokerage and brokerage”. Giving an example of the Ethereum and IOST, these will be classified as “blockchain based system software development and supply business”. These will be then expected to follow the statistics of the industry and government policies.

The local media source also elaborates that last month the Ministry of Information and Communication, the Ministry of Science and Technology, and the National Statistical Office set up a “blockchain technology industry classification adjustment”. They are currently asking for opinions from over 160 institutions comprising of government ministries and regional municipalities.

A government official has also been quoted as saying,

“We are considering a plan to release the standard later this month. It is difficult to tell about the details.”

A positive step towards crypto

This classification adjustment will have the blockchain-based industrial activities divided into three subdivisions that will be further subdivided into 10 divisions. These three subdivisions classify into blockchain based internet games, platforms like Ethereum, NEO, and IOST on which Dapps are built, and development of blockchain-based specific task processing software.

Coming onto to exchanges it mentions Bithumb, Upbit, and Coincircle like exchanges that sell and brokers the cryptocurrencies comes under “Encrypted asset sales and brokerage”. Furthermore,

“It also clearly distinguished a number of controversial cryptographic exchanges and identified it as a cryptographic asset brokerage.”

It is expected that the final draft will be released by the end of July month. The government will also conduct a survey of the overall market and use it in the future for the industry promotion and growth.

These are no doubt extremely progressive steps but it is yet to be seen if the government will go this route as there is no confirmation from the government’s side for now.