South Korea has no authority to close cryptocurrency exchanges

The South Korean Fair Trade Commission chairman says regulation for cryptocurrency exchanges is impossible to enforce within the current legal framework of the country. With many governmental officials openly working towards regulating the industry, many are wondering how this will be done.
This past Wednesday, the chairman of the South Korean Fair-Trade Commission (KFTC), Kim Sang-Joo, told CBS in a radio interview that the KFTC does not have the authority to close cryptocurrency exchanges. Kim also stated, “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.”

Several major cryptocurrency exchanges, including Bithumb, Coinone, and Korbit, are under investigation by the KFTC for violating South Korean Electronic Commerce Law. When asked if other ministries could ban or close cryptocurrency exchanges, Kim stated, “cryptocurrency has recently emerged and other laws do not have the exact legal provisions related to closing exchanges.”

Is cryptocurrency trading gambling?

Minister Park Sang-ki recently stated that he believes cryptocurrency trading is a form of gambling. When Kim was asked to comment on this statement, he replied that he does not agree with the viewpoint of the Justice Minister, and that there were many illegal activities discovered during the investigation. 

Future regulation

The chairman provided a plan to deal with these illegal activities. He stated, “I will notify them and make appropriate arrangements… In particular, we will call for voluntary reforms at least in the first half of the year.” Of course, if this doesn’t stop the illegal activity, he explained that the FTC would pursue other reforms via legislative routes during the second half of the year. 

The news outlet, Yonhap, reported that he had said, “The government is reviewing both options to shut down virtual currency exchanges or to close only those exchanges that have committed illegal acts.”

The Financial Services Commission (FSC) is currently reviewing all options, which include only shutting down exchanges which engage in illegal activities. The head of the Office of Policy Coordination, Hong Nam-ki told KBS on Thursday that his office is doing what they can, while staying within the framework of the law.