November 24, 2024

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[THE INVESTOR] South Korea, an emerging market for cryptocurrency trade, is likely to remain out of the global race to sell bitcoin futures to investors.

Securities firms in Korea withdrew plans to draw investments through foreign bitcoin-related derivatives, upon the Financial Services Commission’s order to ban the trade. The direction was sent through the Korea Financial Investment Association on Dec. 5.

As a result, securities firms such as eBest Investment & Securities and Shinhan Financial Investment canceled seminars for bitcoin futures investors slated for Dec. 14 and Dec. 15, respectively.

“Drawing investor attention to bitcoin futures could have been a way to cool down the overheated (cryptocurrency) market,” an industry source told The Korea Herald on Dec. 6. 

Bitcoin futures will begin trading on the Chicago Board Options Exchange in the United States from Sunday, while the Chicago Mercantile Exchange is also set to trade the futures starting Dec. 18.

The decision made by Korea‘s top financial watchdog FSC was self-contradicting, argued Kim Jin-hwa, who is preparing the launch of a civic association joined by local cryptocurrency business entities including Bithumb, Coinone and Korbit. 

The latest ban on initial coin offerings in Korea, according to the Capital Markets Act, indicates cryptocurrency is seen as a financial instrument, while the Dec. 5 ban says otherwise, Kim, former chief of Korbit, told The Korea Herald.

“An entry of new technology into Korea is hamstrung by the regulation,” he said.

The news came after a civic association preparation committee, led by Kim, mapped out Wednesday the voluntary regulation of cryptocurrency in the nation suffering from a legal vacuum.

Starting January 2018, the bottom-up regulation will force a cryptocurrency trader to buy or sell coins through one verified, real-name virtual account per exchange.

The Korea government has looked to frame out state-sponsored regulations to define cryptocurrency exchange operators as fundraisers without permission. 

Also on Dec. 5, the National Tax Service hinted at collecting tax from payments made in cryptocurrency. 

By Son Ji-hyoung/The Korea Herald (consnow@heraldcorp.com)