South Korea Mulls BitLicense-Style Rules for Crypto Exchanges

South Korea is considering adopting a system similar to New York's "BitLicense" for the regulation of cryptocurrency exchanges, a report states.

AccessTimeIconFeb 13, 2018 at 2:00 p.m. UTC
Updated Sep 13, 2021 at 7:34 a.m. UTC
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South Korea is reportedly considering a technology-specific licensing scheme as part of it proposed regulation of cryptocurrency exchanges.

According to BusinessKorea, a government official involved with a virtual currency task force said Sunday that such rules, which bear a similarity to New York's controversial "BitLicense," introduced in 2015, could be enacted or at least debated.

The source said:

"We are positively considering the adoption of an exchange approval system as the additional regulation on cryptocurrencies. We are most likely benchmark the model of the State of New York that gives a selective permission."

The news appears to mark a softening of the country's stance after some regulators had proposed that exchange-based crypto trading be shut down completely, as it is in China. South Korea has also recently moved to ban the use of anonymous virtual accounts for trading in the country, with real-name accounts being compulsory from the end of January.

BusinessKorea cited the government source as saying that another option on the table would be to impose taxes instead of creating additional regulations

"We will hold a meeting to respond to national petition related to digital currencies this month but we are highly likely to make up for the defects of existing measures only at the meeting," the source said

The news source added that government is likely to make a final decision on cryptocurrency exchanges after local elections due in June.

Launched after some delay in June 2015, the New York State Department of Financial Services' (NYDFS) regulatory framework – dubbed the "BitLicense" – sets out that no company or individual can offer cryptocurrency services as a custodian or exchange without first receiving a license, and they must also operate in compliance with stringent money transmitter regulations.

The high cost of attaining a license has meant that a limited number of exchanges now operate in New York, while some have left the state completely.

S. Korean National Assembly image via Shutterstock

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