South Korea's Ruling Party Delays Proposal to Ease Crypto Restrictions

CryptoNews.com

2024-02-29 03:40:30

Ruholamin Haqshanas

Last updated:

February 29, 2024 06:40 EST | 2 min read

South Korea’s ruling People Power Party has indefinitely postponed its plans to ease crypto regulations, including the lifting of the ban on local spot Bitcoin (BTC) exchange-traded funds (ETFs)

According to a report from local media outlet Chosun Biz, the party recently removed virtual assets from its list of policy priorities, effectively abandoning its plan to make a pledge to ease regulations

Previously, the People Power Party, led by Representative Yoon Chang-hyun of the National Assembly’s Political Affairs Committee, intended to announce a virtual asset pledge ahead of the general election scheduled for April 10

An official familiar with the party’s situation stated that the party leadership is currently focused on constituency nominations and personnel selection for the People’s Future, a proportional satellite party

The official further explained that starting in March, the party will prioritize election campaigns in each constituency, leaving little possibility for the announcement of virtual asset pledges in the remaining period.

South Korea’s Ruling Party Fails to Coordinate Crypto Regulations

One of the key factors behind the party’s decision is believed to be the challenges faced in aligning with the government and financial authorities on cryptocurrency policies

The People Power Party’s proposed pledge included plans to allow the issuance and trading of Bitcoin spot ETFs

However, the Financial Services Commission has maintained a strong negative perception of the investment risks associated with virtual assets.

While the U.S. Securities and Exchange Commission approved the Bitcoin spot ETF in the past month, the Financial Services Commission has prohibited investment in and issuance of these products, citing the exclusion of virtual assets from the underlying assets defined in the Capital Markets Act.

The party also considered a plan to postpone taxation on virtual assets for two years and permit corporate investment in virtual assets

However, insufficient consultation with relevant ministries and concerns over potential significant risks of loss, especially in the case of corporate investments, prevented the inclusion of these proposals as pledges.

Additionally, the People Power Party conducted internal investigations to ensure that there were no fraudulent activities or suspicions related to virtual assets among party officials

Opposition Party Also Pledged to Allow Bitcoin ETFs

It is worth noting that the Democratic Party’s “Digital Asset Institutionalization Pledge,” revealed earlier, also included plans to allow Bitcoin spot ETFs and an increase in the deduction limit for virtual asset sales profits

In fact, the similarity in content between the People Power Party’s intended pledges and those already announced by the Democratic Party of Korea contributed to the decision to withhold their announcement

Per the report, the People Power Party’s leadership felt that their pledges lacked novelty and would fail to attract attention.

Meanwhile, South Korean police continue to wage “war” on crypto-powered drug trafficking, with officers in the capital Seoul making 452 arrests from June 2022 to December 2023.

As reported, police arrested three suspected drug dealers just this week. Officers also charged 445 buyers and four illegal “cryptoasset trading platform operators.”

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