South Korea's Financial Services Commission (FSC) has proposed an amendment to its credit finance act.
South Korea's Financial Services Commission (FSC) has proposed an amendment to its credit finance act that would effectively prohibit local citizens from purchasing cryptocurrencies using credit cards.
The main reason for the proposed amendment is to limit South Korean crypto traders from buying crypto on foreign crypto exchanges, the FSC said. The regulator expressed concerns over the illegal outflow of domestic funds, money laundering, and the encouragement of speculative behavior.
The FSC plans to collect public feedback on the amendment proposal until February 13. It is expected to be reviewed and voted on with the aim of implementation in the first half of 2024.
Under a 2021 amendment to the financial reporting law, South Korean crypto users are required to trade using withdrawal and deposit accounts on local exchanges, verified with their real names. Local trading platforms are also required to undertake rigorous licensing preparations to provide fiat-to-crypto services, including securing a partnership with a local bank.
The FSC's proposed ban on credit card purchases of cryptocurrencies is part of its broader efforts to regulate the crypto industry and protect investors. In December 2023, the FSC proposed rules to protect users of crypto exchanges, requiring the exchanges to store at least 80% of their customers' deposits in cold wallets and pay fees to customers for using their deposits.
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