At a meeting of the Political Affairs Committee of South Korea, industry experts spoke out against tightening the KYC procedure and reporting requirements for cryptocurrency transactions.
South Korean regulations require cryptocurrency exchanges to register with regulators and only serve those users who have gone through the KYC procedure.
In October 2021, the South Korean government announced that the volume of illegal international transactions with cryptocurrencies increased 40 times. Many MPs expressed concerns that cryptocurrencies could contribute to tax evasion and money laundering.
The South Korean Political Affairs Committee held a public meeting on November 16, local sources said. The committee heard the arguments of legislators and participants in the cryptocurrency industry against introducing too harsh measures, as well as opinions on various bills related to digital assets.
Lawyer Yoon Jong-soo said that due to the rapid increase of crypto assets, it will be difficult for government organizations to verify large amounts of data and track money laundering risks.
The South Korean Blockchain Association believes that tight restrictions on cryptocurrencies could stifle the development of the industry. Therefore, the Association stated the need to pass laws on cryptocurrencies that must ensure user protection and contribute to the development of the digital currency industry.
Recall that in June, the South Korean Financial Services Commission (FSC) demanded that local banks should stop providing services to traders and exchanges that do not comply with the KYC and AML procedures. Such restrictions have led to the closure of about 35 crypto firms in South Korea.