Bank of Korea Granted Power to Probe Local Crypto Firm

• What – The Bank of Korea, the central bank of South Korea, has been given the authority to conduct investigations into local cryptocurrency firms. 
• Why – This comes after the country’s National Assembly passed a bill amending the Act on Reporting and Use of Specific Financial Transaction Information. 
• What Next – Under the revised bill, the Bank of Korea can investigate any cryptocurrency exchanges, wallet service providers, or other digital asset firms flagged for suspicious transactions. 

The bank can request relevant crypto data and documents, interview employees, and conduct on-site inspections.

The amendment to the Act on Reporting and Use of Specific Financial Transaction Information was introduced in response to the increasing use of cryptocurrency for illegal activities, including money laundering and terrorism financing.

This move by the Bank of Korea comes after several high-profile hacks and scams that have plagued the South Korean cryptocurrency industry in recent years. In 2018, cryptocurrency exchange Coincheck lost $530 million worth of cryptocurrency in a hack. 

Several South Korean crypto exchanges were hacked earlier this year, resulting in the theft of millions of dollars worth of digital assets.

The Korean government has been working to tighten regulations on the cryptocurrency industry to prevent such incidents from happening in the future. The new bill is just one of several measures being taken to regulate the industry.

The Bank of Korea has previously expressed concerns about the risks posed by cryptocurrencies. In 2017, the bank’s governor, Lee Ju-yeol, warned that the rapid rise in cryptocurrencies’ value could threaten financial stability.

Despite these concerns, South Korea has become one of the world’s biggest markets for cryptocurrency trading. According to a report by the Korea Financial Investment Association, the country’s cryptocurrency market was worth $13.3 billion in January 2021, with over 2.6 million people trading in digital assets.

However, the Bank of Korea’s increased regulatory oversight of the crypto industry could significantly impact the market. The bank’s investigations could lead to fines or even the suspension of operations for cryptocurrency firms that are found to be engaging in illegal activities.

While the move is likely to be welcomed by many in the crypto industry who have been calling for greater regulation and oversight, it may also lead to concerns about government overreach and the potential impact on innovation in the industry.

In conclusion, the Bank of Korea has been given the authority to investigate local crypto firms, including exchanges, wallet service providers, and other digital asset firms. This move comes in response to the increasing use of cryptocurrency for illegal activities and is part of a wider effort by the Korean government to regulate the industry. 

While some may welcome the move, concerns about government overreach and the potential impact on innovation in the industry remain.