[Aju News DB]
Amid a heated debate over how to regulate cryptocurrencies, South Korea's online cryptocurrency exchanges and dealers presented voluntary regulations, but state regulators are reluctant to recognize digital money as financial products.
The proposal came on Wednesday from a civic committee to launch South Korea's "blockchain" association involving about 30 groups and online cryptocurrency exchanges, which want an official market for Bitcoin, Etherium and other digital currencies.
In South Korea, concerns are growing over cryptocurrency users being targeted by hackers and swindlers. North Korean hackers are suspected of stealing and collecting bitcoins because it is hard to track them down.
Government and civilian cyber experts in Seoul insist the cash-strapped North has been desperate to secure foreign currencies in every way possible due to tight sanctions imposed by the international community to punish Pyongyang's nuclear and missile programs.
The committee called for voluntary regulations to maintain the security and transparency of cryptocurrency transactions, suggesting the deposit and withdrawal of digital money should be handled through a registered account.
The account would be checked for its authenticity in cooperation with commercial banks, the committee said, adding regular phone cheks or video calls will be used to authenticate the account's actual owner.
Under the supervision of IT security experts, the owners of unauthenticated accounts will be given penalties such as restrictions on the maximum amount of withdrawals, the committee said.
Digital currency or cryptocurrency is a decentralized digital asset which is exchangeable between users through peer-to-peer transactions. The digital money market operates on a decentralized blockchain which means no central authority holds transaction records stored on the computer of every owner of a cryptocurrency.
South Korea is one of the world's largest online cryptocurrency exchange markets. Many are engaged in speculative investments, lured by some success stories. In September, the daily trading volume of digital money was estimated at about 65 billion won (60 million US dollars), according to data released by Coinhills, a cryptocurrency market index group.
Kim Yong-beom, vice chairman of the Financial Services Commission, told a forum on December 4 that the commission would map out measures to prevent cryptocurrencies from being used as a tool for money laundering.
Unlike normal financial products, Kim said that the government would not guarantee the value of cryptocurrencies. "We are not sure of which part we should regulate because the gray zone is too vast," he said, promising to prevent the liquidity of financial firms from flowing into the speculative digital money market.
Some experts support regulations while others argued the government should stay away. "Government regulations are necessary as the exchange market for cryptocurrencies is overheated," Kim Jin-hwa, co-founder of Korbit, a cryptocurrency trading platform, said at the forum.
reporter
Park Sae-jin
swatchsjp@ajunews.com
