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South Korea Tightens Crypto Rules as Hong Kong Seeks Protections

2 mins
Updated by Geraint Price
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In Brief

  • The South Korean government is working on a crypto regulatory bill.
  • Leading exchanges are advising the government on the regulation.
  • Meanwhile, Hong Kong is witnessing a rise in crypto scams.
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The South Korean government is working on crypto regulation and Hong Kong citizens are demanding protections due to rising crypto scams.

This year, governments worldwide are seeking to implement regulatory frameworks for crypto regulation. While some governments have launched a crackdown, others welcome crypto, with appropriate rules and guidelines.

South Korean Industry Stakeholders Advise Government on Crypto Regulation 

According to the Financial Times, Yulchon, the South Korean law firm with expertise in the digital asset class, is helping the government to “tighten oversight of the country’s exuberant crypto sector.”

South Korean citizens have heavy exposure to the crypto asset class. Over 13% of the global Bitcoin trading volume comes from the Korean won. But, the citizens have also been victims of various crypto scams.

South Korea’s Do Kwon, the founder of the Terra Luna ecosystem, was responsible for pushing the industry into a crypto winter last year. It is estimated roughly 200,000 South Koreans had invested in Kwon’s TerraUSD.

Last month, the authorities arrested Coinone executives on suspicion of taking bribes to list tokens. Concerned that the executives might flee the country like Kwon, the judge issued an arrest warrant.

In June 2022, South Korean exchanges inaugurated the Digital Asset Exchange Alliance (DAXA) following the Terraform Lab collapse. Yulchon helps with detailed guidelines to DAXA, and eventually, DAXA advises the government on regulation.

The DAXA comprises crypto exchanges like Upbit, Bithumb, Coinone, Korbit, and Gopax.

Crypto Regulatory Bill

Last month, BeInCrypto reported that South Korea’s cryptocurrency bill cleared the first review phase from National Assembly. The bill is expected to become law this year.

Kim Ik-hyun, a partner at Yulchon, says:

“South Korea is becoming more proactive in creating the regulatory framework — but the bills should pass quickly to protect investors.”

Hong Kong Battles Scammers While Dreaming of Becoming Crypto Hub

Hong Kong has been making headlines for its recent crypto-friendly stance, with its vision of becoming a crypto hub. But now there is a concern about balancing between the priorities of protecting investors and supporting innovation.

According to another FT report, the number of crypto-related scams in Hong Kong increased by 67% last year compared to the previous year of 2021. Crypto scammers committed frauds worth HK$1.7 billion ($217 million) in 2022.

Hence, Hong Kong’s lawyers are working with regulators for better crypto investors’ protection in a way that does not harm innovation.

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In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

Harsh Notariya
Harsh started investing in crypto during the 2021 bull market. He took the opportunity of the market crash in May to learn more about Bitcoin and blockchain technology. Since...