Korea’s regulator proposes banning credit card purchases of cryptocurrencies

If approved by lawmakers, the ban could be implemented as early as the first half of the year

04.01.2024 - 09:12

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What’s new? South Korea’s Financial Services Commission (FSC) has amended its own law on credit financing, suggesting a ban on citizens to buy cryptocurrencies with credit cards. This is how officials intend to restrict local crypto traders from buying cryptocurrencies on foreign exchanges. The Commission fears an illegal outflow of funds, money laundering, as well as “encouraging speculative actions.”

Text of the amendment

What else is known? The amendment is open for public comment until February 13. If approved by lawmakers, it is expected to be implemented as early as the first half of this year.

At the moment, local traders can only trade cryptocurrency through accounts on local exchanges, and it is also mandatory to go through the identification procedure (KYC). This is regulated by an amendment to the Financial Reporting Act, adopted in 2021.

In turn, platforms to provide fiat-to-cryptocurrency exchange services are required to enter into a partnership with a local bank.

Earlier, Korea, together with the national security agencies of the United States and Japan, began developing measures to combat crypto hackers from the DPRK.

In March last year, the British bank HSBC introduced daily limits for local customers to purchase cryptocurrencies using debit cards and completely banned such credit card transactions. The bank referred to warnings from the local regulator, which classifies digital assets as high-risk.

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