After the recent hack of South Korea's Bithumb, the authorities of the country reportedly intends to tighten control over the crypto segment, including massive regulation of the exchange platforms and faster launch of the normative base for the sector.
At present, the trading platforms dealing with the cryptos are covered by the regulation for service providers, though in fact, anyone can open an exchange just after paying $30. The authorities consider digital asset exchanges as telecom service providers. Notably, the state institutions and financial organizations have no rights to strictly supervise these businesses.
As commented the representative of the Korea Financial Intelligence Unit (KFIU), with the authorities would become able to develop the strict set of rules for the platforms in case of positive determination regarding the proposed bill.
“Under current regulations, there are clear limitations in preventing money laundering on crypto exchanges because the only way authorities can spot suspicious transactions is through banks. If the bill of lawmaker Jae Yoon-kyung from the Democratic Party of Korea passes, local authorities will be able to impose identical regulations on crypto exchanges that are implemented on commercial banks,” a KFIU spokesperson commented.
According to local market experts, with the Coinrail hack a few weeks ago, the government started considering the faster development of the regulation pack, while the Bithumb case, which was like a bolt from the blue, will force authorities to give crypto law high priority.
For reference, South Korea's exchange Bithumb was hacked this week and lost some $31 million. For now, the platform suspended all deposit-withdrawal activities.