As crypto investors keep an eye on potential spot Bitcoin ETF approvals from the US, South Korea’s top financial regulator is proposing changes to the country’s credit finance laws to ban the purchase of cryptocurrencies with credit cards. This move is aimed at addressing concerns over illegal capital outflows and money laundering, which have been highlighted following several high-profile crypto bankruptcies in 2022.
The Financial Services Commission (FSC) of South Korea expressed worries about South Korean citizens buying crypto from foreign exchanges, which could lead to illegal capital flight and money laundering. The FSC is currently seeking public opinion on the proposal until February 13, with the plan expected to undergo review and resolution before implementation in the first half of the year.
According to local news agency Yonhap, current laws only allow local crypto exchanges to facilitate transactions between verified deposit and withdrawal accounts. However, these rules do not apply to foreign crypto exchanges, which has been a regulatory loophole.
The push for crypto regulations remains a hot topic, especially in developed countries, due to fears of money laundering and the collapse of crypto firms. The failure of Terra Luna and the subsequent bankruptcy of the US-based crypto exchange FTX, which affected hundreds of thousands of users, have spurred on regulatory actions.
As a result of these regulations, crypto companies have been forced to cease operations in several countries, including the US and the UK. However, those that have completed their licensing applications have managed to regain investor trust.