The South Korean Fair Trade Commission (KFTC) does not have the authority to close cryptocurrency exchanges. “It is impossible in reality,” said the KFTC chairman. The agency is currently investigating 13 major exchanges operating in the country for alleged violations of the e-commerce law.
Also read: South Korean Officials Caught Trading On Insider Knowledge of Crypto Regulations
No Authority to Close Exchanges
The KFTC is currently investigating 13 major cryptocurrency exchanges for alleged violations of the South Korean Electronic Commerce Law, including Bithumb, Coinone, and Korbit, according to local media.
However, KFTC Chairman Kim Sang-Joo said on Wednesday that “the e-commerce law does not have the right to close virtual currency exchanges,” adding that “it is impossible in reality.” In an interview on CBS radio, he elaborated:
We do not have the authority to close virtual currency exchanges…It is a clear reality that there is no proper legal provision related to it.
When asked if other ministries could ban or close cryptocurrency exchanges, Kim emphasized, “cryptocurrency has recently emerged and other laws do not have the exact legal provisions related to closing exchanges.”
In addition, Kim commented on what the Justice Minister Park Sang-ki said recently about cryptocurrency trading being a form of gambling, stating:
I do not agree with the attitude of Justice Minister Park Sang-ki, who said, ‘cryptocurrency investment is gambling’.
Voluntary Reforms or Extreme Measures
Kim also noted on Wednesday that “there are many illegal activities discovered during the investigation.”
For exchanges in violation of the law, “I will notify them and make appropriate arrangements” to remedy the situations, he detailed. “In particular, we will call for voluntary reforms at least in the first half of the year,” he added. However, if the problems persist, the FTC will seek “more direct reforms through legislative amendments in the second half of the year.”
Meanwhile, other regulators are discussing alternative measures to prevent an overheating in cryptocurrency speculation and illegal activities in the crypto market, Yonhap reported. According to the Financial Services Commission (FSC), “The government is reviewing both options to shut down virtual currency exchanges or to close only those exchanges that have committed illegal acts,” the news outlet conveyed.
“We are doing what we can do right now within the framework of the current law,” Hong Nam-ki, head of the Office of Policy Coordination, was quoted by KBS on Thursday.
Do you think the South Korean government will find other ways to close cryptocurrency exchanges? Let us know in the comments section below.
Images courtesy of Shutterstock and Yonhap.
Need to calculate your bitcoin holdings? Check our tools section.