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South Korea’s ruling party delays proposal to ease restrictions on cryptocurrencies.

The decision could affect the further development of the cryptocurrency market in the country and tighten the gap between politicians and blockchain technology enthusiasts.

Date: 2024-03-01 Author: Marek Stiller
South Korea’s ruling party delays proposal to ease restrictions on cryptocurrencies.

The People’s PowerParty, which governs South Korea, has indefinitely postponed its plans to reduce regulations on cryptocurrencies. Among those plans was lifting the ban on local bitcoin ETFs.

Local media outlet Chosun Biz reports that the party recently abandoned its plan to pledge to ease regulations, removing virtual assets from its list of policy priorities.

Earlier, Yoon Chang-hyun, a representative of the National Assembly’s Political Affairs Committee, said the People’s Power Party intended to announce virtual asset pledges before the April 10 general election.

An official familiar with the situation said that the party leadership is currently focusing on recruiting members and nominations from constituencies ahead of the election.

The official went on to explain that starting in March, the party will prioritize election campaigns in each constituency, leaving little scope for announcing virtual pledges of assets during the remaining period.

Regulations on cryptocurrencies are not coordinated by South Korea’s ruling party.

One of the key factors responsible for the party’s decision is believed to be the challenges faced in reaching an agreement with the government and financial authorities on cryptocurrency policy.

The People’s Power Party intended to allow the issuance and trading of Bitcoin ETFs. However, the Financial Services Commission maintains a categorically negative review of investment risks associated with virtual assets.

Last month, the US Securities and Exchange Commission approved a Bitcoin ETF fund. However, the Financial Services Commission said virtual assets are not among the underlying assets defined by the Capital Markets Act and banned investment in these products and their issues.

The party also considered deferring taxation of virtual assets for two years and allowing companies to invest in virtual assets.

However, concerns about the possible significant risk of loss, especially for corporate investments, and the lack of sufficient consultation with relevant ministries prevented the inclusion of these proposals as pledges.

In addition, the People’s Power Party conducted internal investigations to ensure that party members were not involved in fraudulent activities or suspicions involving virtual assets.

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The opposition party has also declared permission for Bitcoin ETFs.

The Democratic Party ‘s previously disclosed “Pledge to Institutionalize Digital Assets” also included plans to allow immediate investment in Bitcoin ETFs and to increase the limit on deductions for profits from the sale of virtual assets.

In fact, the decision to withhold their announcement was prompted by the similarity of the content of the People’s Power Party’s planned pledges with those already announced by the Democratic Party of Korea.

The report indicates that the leaders of the People’s Power Party have acknowledged that their statements are not novel and do not attract attention.

Meanwhile, South Korean police are waging a “war” against drug trafficking using cryptocurrencies. From June 2022 to December 2023, 452 people were arrested in the capital Seoul.

This week, three people were detained by police on suspicion of drug trafficking. Officers also charged 445 buyers and four illegal “cryptocurrency trading platform operators.”

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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