South Korea Proposes Credit Card Restrictions for Crypto Transactions

• The main goal is to stop locals from buying cryptocurrency on international exchanges.
• This is an effort to prevent the possible misappropriation of money and speculative activity.

A modification to the Credit Finance Act has been suggested by the Financial Services Commission (FSC) of South Korea, which would significantly limit the use of credit cards for crypto transactions. This is an effort to prevent the possible misappropriation of money and speculative activity.

The main goal of the regulator is to stop locals from buying cryptocurrency on international exchanges. They are afraid that this would lead to money laundering, illicit fund outflows, and speculative activity.

Bolstering Grip

As stated in the legislative notice, the intended change would prohibit the unlawful transfer of cash to other countries via virtual asset exchanges that accept credit card payments. Restrictions on some types of credit card transactions have been expanded in response to FSC concerns about money laundering and speculative activity.

The officials further stressed that the “Act on the Protection of Virtual Asset Users” defines virtual assets and states that they cannot be used as payment.

Moreover, potentially bolstering controls against foreign currency outflow and improving regulations connected to anti-money laundering (AML), the effort seeks to conform with international standards and encourage collaboration with global businesses.

At the same time, the FSC is giving the public until February 13, 2024, to voice their thoughts on the proposed revision. They want to adopt the changes in the first half of 2024.

Also, through the Center for Participatory Legislation, individuals, groups, or organizations in South Korea who have thoughts on the change may voice them online. In essence, the FSC promotes the inclusion of stakeholders’ ideas by inviting them to share their own, guaranteeing that all viewpoints would be thoroughly considered.

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