South Korea to ban Crypto purchase via Credit Card method

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The South Korean authorities are planning to ban Credit Card payment methods involved in cryptocurrency purchases, to prohibit money laundering.

South Korea is a very big hub of the crypto sector. Under the jurisdiction of this country, the crypto sector is fully regulated & only a limited number of companies are fully registered with the corresponding regulatory bodies to provide crypto-fiat paired crypto services.

On 3 Jan 2024, The Financial Services Commission, the country’s top financial regulatory body, proposed a bill to introduce new changes in its Credit Finance Act. 

Through this new amendment, the FSC body aimed to limit its crypto traders from buying digital assets on foreign crypto exchanges.  

This latest decision was taken by the FSC agency to prohibit the illegal outflow of domestic funds, money laundering and the encouragement of speculative behaviour. 

For now, this regulatory body will collect public opinions on this matter up to 13 Feb of this year and further, it will give its final decision on this amendment.

If this amendment gets approval then it will come into effect before the end of the first quarter of this year. 

Under the existing laws, country’s citizens are required to use only local crypto platforms to purchase crypto assets by using real account names. 

Over the past couple of years, Korean regulators have shown significant aggressive action against bad actors involved in the crypto sector. 

Terra crypto fraud 

Terraform Labs is a South Korean crypto firm which is responsible for Terra (Luna) & TerraUSD (UST) stablecoin. In May 2022, both of these cryptocurrencies collapsed badly. 

Later investigations found that Terra co-founder Do Kwon misused his power to misuse the company’s funds, which was illegal.

Currently, he is in Montenegro and the South Korean enforcement agencies are waiting for his extradition so that they can conduct a deep investigation into Terra crypto fraud & found the main culprit behind the whole incident.

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