Traders in South Korea could be prevented from buying crypto with credit cards under new proposals submitted by the country’s finance regulator in a bid to counter illicit activity.
Yesterday, South Korea’s Financial Services Commission (FSC) submitted a plan to “diversify the financing methods of credit finance companies.” The proposal aims to address concerns about illegal outflows of domestic funds, made possible via crypto exchanges and speculative activities.
To do this, the FSC suggested that the Enforcement Decree of the Credit Specialized Financial Business Act should be amended and that credit card purchases of crypto should be prohibited.
The regulator said it expects “cooperation with international brands” which will reportedly help stop the illicit use of currency overseas and in money laundering. Businesses and individuals with opinions on the proposed changes have been asked to submit their thoughts to the Center for Participatory Legislation by February 13.
According to the South Korean Yunhap News Agency, local users looking to trade with crypto must do so using a deposit and withdrawal account that features identity verification. Overseas crypto exchanges however are not subject to this requirement.
In December, the FSC’s vice chief said that authorities will strike a balance between investor protection and technological innovation as they continue to regulate crypto.