South Korea Considers Credit Card Ban for Crypto

The Financial Services Commission of South Korea, the primary financial regulatory body in the country, has recently suggested a modification to the credit finance act. The proposed amendment is intended to restrict the ability of local residents to buy cryptocurrencies using credit cards effectively.

According to the regulator, the primary objective of this new amendment is to restrict crypto traders in South Korea from purchasing cryptocurrencies on foreign crypto exchanges. The Financial Services Commission (FSC) has highlighted in their legislative notice that certain concerns have arisen regarding the unlawful outflow of domestic funds, money laundering, and the promotion of speculative activities. These concerns have influenced their decision to propose the amendment in order to address these issues.

The regulatory body intends to gather public input on the proposed amendment until February 13. It is anticipated that the amendment will undergo review and voting, with the goal of implementation in the first half of 2024, as per Yonhap News Agency.

As per a 2021 amendment to the financial reporting law, individuals in South Korea who engage in cryptocurrency trading must use verified withdrawal and deposit accounts on local exchanges, associating them with their real names. Local trading platforms are also obligated to undergo thorough licensing preparations in order to offer fiat-to-crypto services. This includes establishing a partnership with a local bank to meet the regulatory requirements.