South Korea is an attractive market for cryptocurrency investments. Their obsession with technology, speedy internet connections, and micropayment systems may explain their attraction to cryptocurrencies. Buying crypto in South Korea is simple.
KYC requirements were made mandatory this year under the new legislation, creating a safer economic environment and decreasing risks of money laundering and price manipulation.
Investing
South Korea is one of the world’s leading digital asset markets, and its new president has pledged to implement policies that fully incorporate crypto assets into its economy. But regulators in South Korea remain challenged with how best to regulate it to prevent fraud and money laundering: for example by tightening AML/KYC rules or exchanging reporting requirements; moreover, the government is exploring tax frameworks specifically for virtual assets.
South Korean cryptocurrency regulations currently take the form of an amalgam of laws and guidelines, such as an amendment to The Act on Reporting and Use of Specific Financial Information requiring crypto trading platforms to obtain an information security certificate and provide users with real-name accounts – this requirement was introduced following Terra-LUNA’s collapse, wiping out $40 billion worth of market cap in less than 48 hours.
Regulators should impose requirements that crypto investments be registered as capital gains, in order to help combat money laundering and investment fraud as well as provide investors with some level of protection. Furthermore, cryptocurrency may be subject to value-added tax (VAT), which levies taxes based on any money added at each stage of production and distribution.
Despite these regulations, Koreans continue to invest in cryptocurrency. Major cryptocurrency exchanges operating in Korea such as Bithumb, Upbit, and Coinone make investing easy: with mobile applications that enable users to buy, sell, and trade cryptocurrencies easily; in addition to being able to deposit/withdraw both KRW funds as well as crypto.
Additionally, several companies in South Korea are currently developing blockchain technologies that could one day be utilized for commercial transactions. One such blockchain-based video game called Kakao boasts over 40 million players globally and its success has spurred entrepreneurs to launch similar games – making investing in crypto an attractive proposition for those looking to diversify their portfolios.
Keep in mind, however, that not all cryptocurrencies are equal; some are better suited for investing than others and it is best to conduct some research prior to purchasing any coins. Remember too that the prices of cryptocurrencies can shift quickly; thus it is crucial that you understand both technical and fundamental factors affecting their price fluctuations.
Trading
South Korean law recognizes cryptocurrency trading, and recently introduced regulations designed to enhance security, prevent money laundering and reduce price manipulation. Furthermore, new laws will increase transparency and investor protection; South Korea’s financial regulators can now monitor transactions more closely; these new rules should bring legitimacy and attract more investors as well as encourage companies to launch ICOs.
South Korean cryptocurrency has gained prominence for a variety of reasons, including its young population’s penchant for cutting-edge tech and its openness to innovative advancements. Fast internet speeds and advanced telecom systems have made South Korea an early adopter of mobile payment systems; youth unemployment, costly living costs, and an extremely competitive job market all add fuel to this fire – leading to demand for alternative ways of financial security.
By contrast, more people in South Korea are turning to cryptocurrency exchanges to trade and invest in various digital assets. These platforms and apps are regulated by the government and require users to verify their identities using two-factor authentication (2FA) before making purchases. Furthermore, fiat currencies must be deposited and withdrawn via verified bank accounts or credit cards before they can make transactions involving fiat currency; and to reduce theft risk wallets supporting cold storage must also be stored with your coins.
Bithumb is one of the leading cryptocurrency exchanges in South Korea with over 8 million registered users and more than one trillion US dollars in cumulative transaction volume. Their user-friendly interface and secure multi-signature cold wallet system enable customers to trade multiple cryptocurrencies such as BTC and ETH with ease, and customer service representatives are always on standby should any inquiries arise.
Coinone, another popular cryptocurrency exchange in South Korea, provides users with access to an assortment of cryptocurrencies for trading. Offering margin and futures trading services along with real-time trading charts on mobile, the exchange also features a remittance service that allows users to send funds abroad.
Wallets
South Korean exchanges employ various verification processes to validate your identity, and most can work seamlessly across desktop and mobile devices. They also feature built-in wallets; however, for maximum security, it’s advisable to withdraw assets to a hardware wallet of your own choice. In order to purchase cryptocurrency in South Korea you will require access to an internet connection as well as two-factor authentication (2FA). Most exchanges require bank accounts or credit cards in order to complete the KYC registration processes.
Cryptocurrency trading in South Korea is legal, although there may be limitations on what you can purchase and sell. Some exchanges require a minimum deposit amount while others limit transactions per day. Before trading, be sure to read carefully through all terms and conditions provided by each exchange and make a note of which crypto coins they accept or deny purchases from traders.
South Korean hackers have recently caused major losses of digital assets, with hackers breaching GDAC Exchange in April to steal $13 Million in funds from their hot wallet, leaving GDAC reeling after recovering from another significant hack suffered in May by co-founder and CEO of Terraform Labs (LUNA) when she relaunched their network with a new blockchain.
South Korea has implemented strict regulations for crypto exchanges in an effort to safeguard digital assets, including mandating real-name bank accounts, increasing transaction data transparency, and implementing anti-money laundering and countering the financing of terrorism (AML/CFT) standards. All Korean crypto service providers must also abide by these new rules by September 2021 in order to avoid penalties.
AML/CFT regulations have been enforced on many crypto service providers, such as exchanges and custodial wallets. As a result, these firms must upgrade their AML/KYC systems and register with the government in order to stay compliant – this regulation also covers ICOs and similar fundraising events.
Exchanges
Young South Koreans are opting out of traditional employment to venture into crypto day trading in hopes of amassing enough wealth for them to purchase homes, which remain out of reach for most in South Korea. Unfortunately, this market can be volatile; many have lost considerable amounts due to price volatility while some have even been accused of fraud or safety concerns about digital assets being traded despite these risks being presented by trading platforms themselves. As a result, South Korean authorities are taking measures to help limit speculation by issuing regulations designed to combat it more effectively than before.
Seoul recently took steps to regulate the virtual asset industry by tightening Know Your Customer checks, mandating cryptocurrency exchanges’ secure information security management system certification, and mandating AML/CTF requirements for all crypto trading platforms. Furthermore, Seoul proposed a tax framework that would apply a 20% capital gains tax on investors who accrue more than $2,135 in trading profit.
South Korean cryptocurrency trading is an immense industry, with an estimated 5.6 million people taking part – making it the world’s most popular crypto trading market. Competition for the local market is intense; three of its top exchanges – Upbit, Bithumb, and ProBit – prioritize user security to provide users with optimal experiences.
While crypto in South Korea is currently dominated by three large players, smaller exchanges are working hard to make an impression in the industry. ProBit stands out with its innovative business model of serving not just Korean users but those globally as well. Users can trade cryptocurrency and digital tokens on its platform while taking advantage of different payment methods offered; its language support varies among languages offered and CEO believes its focus on user experience sets it apart from competitors.
South Korea seems poised to continue leading in cryptocurrency technology despite its current craze, thanks to its young population’s eager participation and its chaebol giants’ careful approach towards regulation – likely an indication of their long-term viability as early adopters of key world-changing technologies, like cryptocurrency.
