The South Korea Financial Supervisory Service (FSS) Governor, Choe Heung-sik, is leaning towards normalizing cryptocurrency – a shift from its original stance of regulating the use of digital currencies. Choe has advised reporters of the current global context of how cryptocurrency users are deciding on the future of cryptocurrency. He advised, “The whole world is now framing the outline (for cryptocurrency) and therefore (the government) should rather work more on normalization than increasing regulation.” Choe has previously struggled with regulating cryptocurrency as well as the absence of legislation. In a statement he made in 2017, he acknowledged the need for a proper legislation on cryptocurrencies prior to its regulation. He declared, “supervision [of cryptocurrency exchanges] will come only after the legal recognition of digital tokens as legitimate currency.”
Last year, the FSS Governor announced the inherent danger of trading in digital currencies to the extent that Choe even refused to acknowledge them as currencies. He stated, “All we can do is to warn people as we don’t see virtual currencies as actual types of currency, meaning that we cannot step up regulation for now.” The FSS has been leading the move to have the government regulate cryptocurrency. As early as December 2017, official rules on trading cryptocurrency has been set, however, taxation issues and the lack of regulation halted its implementation.
Currently, Choe has changed his stance following the death of 52-year old Jung Ki-joon – an economic policy leader from the Government Policy Coordination who was responsible for January 2018’s government crackdown on cryptocurrency exchanges. Jung died suddenly on February 18, 2018 due to “unknown” causes.
Choe has hinted of implementing lighter regulations on cryptocurrency exchanges. Korea Blockchain Association’s Kim Haw-joon offers a similarly positive future on cryptocurrencies stating, “Though the government and the industry have not yet reached a full agreement, the fact that the regulator himself made clear the government’s stance on co-operation is a positive sign for the markets.”