- South Korea’s FSC proposes a plan to ban citizens from using credit cards to buy crypto.
- FSC states the proposal was largely due to the illegal outflow of domestic funds and other issues.
- Proposal will seek public feedback until Feb 13 and will be implemented in the first half of 2024.
South Korea’s Financial Services Commission (FSC) has disclosed its proposal to rectify the Credit Specialized Financial Business Act to refrain its citizens from purchasing cryptocurrencies using credit cards. Wu Blockchain, a Chinese reporter, tweeted on X about the amendment of South Korea’s Credit Finance Act.
FSC’s proposal would restrict users from using credit cards to buy cryptocurrencies. The main reason for such a ban was the FSC’s concern over the illegal outflow of domestic funds while buying crypto on foreign crypto exchanges, money laundering, and speculative behavior in crypto trading. FSC stated,
Concerns have been raised about the illegal outflow of domestic funds overseas due to card payments on overseas virtual asset exchanges, money laundering, speculation, and encouragement of speculative activities.
Furthermore, FSC reported, in the future, a basis for cooperation with international brands will be established, and various measures will be taken to prevent foreign currency outflow and money laundering.
FSC has now opened the window for public opinions till Feb. 13 to share feedback for their proposal. The amendment is expected to go through a review and voting process with the aim of implementing the new rules within the first half of the year.
Based on the current financial laws, local crypto users can only trade cryptocurrencies using withdrawal and deposit accounts on local crypto exchanges after verifying their real identities. Foreign crypto exchanges are exempted from this rule, making them the user’s favorite. Local exchanges are required to go through a rigorous licensing process before providing fiat to crypto services.
