The ruling South Korean Democratic Party’s crypto task force is discussing a plan to “institutionalize corporate transactions” on crypto exchange platforms with the nation’s nine leading exchanges – a further sign, perhaps of an impending regulatory climbdown.
More details of a key meeting held last month between the exchange chiefs and the task force have revealed that the party may be ready to make a number of concessions to the sector.
Per Herald Kyungjae, the exchanges’ CEOs, present at the meeting “strongly criticized the government’s regulatory measures,” which have imposed a set of banking, information management, and anti-money laundering regulations on trading platforms.
The CEOs accused the government and the party of effectively driving them to the brink of closure – with none of the exchanges yet fully compliant with all of the regulations.
Regardless, the task force has pledged to do all in its power to help bolster the industry – painfully aware that many of its key supporters are crypto investors rapidly losing faith in the party ahead of next year’s general elections.
Exchanges agreed that the government and the industry needed to come to a consensus on how to deal with corporate clients and their transactions, as well as foreign (non-Korean) trading platform clients.
Currently, all major exchanges have their own policies on how to deal with corporations and non-citizens, but all parties agreed that there was a need for regulatory clarity on how to proceed if the process were to be “institutionalized.”
The task force also said it would consider requests from exchanges to pay their tax bills in crypto – rather than fiat. Exchanges typically have large crypto holdings, and from January 1 next year, will be liable to declare and pay tax on their holdings in KRW, a process that will involve incurring exchange and transaction fees. Instead, the platforms’ CEOs asked for the right to hand the government cryptoassets such as bitcoin (BTC).
Meanwhile, a new private member’s bill is to be put before parliament will propose granting exchanges six more months of grace period to implement a long list of compliance requirements that would allow them to continue operating.
The bill’s architect is the MP Yoon Chang-hyeon of the main opposition People’s Power Party. TV Chosun quoted Chang as stating that he would unveil the bill before the end of the week.
Opposition leaders say the government must move fast to avoid a “shutdown crisis” with firms that fail to meet the September 24 compliance deadlines forced to close – or risk fines or imprisonment.