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South Korean officials urged the lawmakers to enforce cryptocurrency regulations. The urgency to pass the first cryptocurrency bill of the country comes as the security flaws and money-laundering risks rife. Major hacks has even threatened to destabilize the financial markets, discouraging people on a larger scale to adopt cryptocurrency.
“While crypto markets have seen rapid growth, such trading platforms don’t seem to be well-enough prepared in terms of security,” Hong Seong-ki, head of the virtual currency response team at South Korea’s Financial Services Commission, said in an interview as quoted by Bloomberg. “We’re trying to legislate the most urgent and important things first, aiming for money-laundering prevention and investor protection. The bill should be passed as soon as possible.”
The bill will be crucial in creating a secure cryptocurrency exchange system in South Korea. The bill is important because South Korea’s cryptocurrency exchanges have attracted global scrutiny after last month two of them were hacked, resulting in loss of virtual currencies such as Bitcoin and Ether.
In June, hackers took away $40 million in stolen cryptocurrencies from Coinrail, a cryptocurrency exchange in South Korea. After the hack, the the specific amount that each coin lost wasn’t disclosed by the exchange, but it took the names of the coins affected, it included token from the Pundi X project, ATC from Aston and the NPER project’s NPER token. Another such incident was noted when Bithumb, another South Korean cryptocurrency exchange released a statement mentioning that hackers stole over $32 million worth of cryptocurrencies and that XRP was one of the major coins which was affected.
The bill was proposed by a lawmaker from South Korea’s ruling party in March. It was proposed in order to increase oversight of the venues, but it is yet to be approved by the National Assembly. The bill (in its current for) would be putting crypto exchanges under the direct supervision of FSC. Hong said he hopes that the National Assembly will act by year-end but also added that the timing is hard to predict. Hong further added that if the bill is passed, the regulator will be focusing on policing the exchanges not promoting their growth.
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