Issue Analysis, Virtual money exchange market `spring up`…Lack of regulation

The virtual money market is rapidly increasing as the interest in virtual money such as Bitcoin and Bithumb increases. However, the safeguards and regulations for virtual money investors are still in their infancy, so investors should pay more attention. Especially recently, it has appeared in mobile exchanges where virtual currency can be exchanged on a smart phone in real time.

FinTech Co., Ltd., on September 25, which operates KakaoTalk Securities `Kakao Stock`, revealed that it will establish an exclusive alliance with US virtual currency exchange `Bitrex` and launch a virtual currency exchange `up beat` in October .

Unlike most of the virtual currency exchanges opened in Korea currently provide only a limited number of virtual currencies, upbeat will support more than 110 virtual currencies and will operate the largest in Korea. The exchange will be listed first on the liquidity-rich Bitcoin, Bithumb, Ripple, and Light Coin of Viklex`s legally and technically verified virtual currencies.

Earlier, Coinest also opened an exchange that enables real-time trading on mobile apps. This mobile app allows investors to trade instantly, including virtual currency quotes, alarms, charts, news, etc., without a separate login.

Besides, Coin One has also opened an offline sales office `Coin One Blocks` in Yeouido, Seoul, as well as a first-generation Bitcoin exchange such as Bismuth and Cobit. Especially, Bithumb`s virtual currency transactions exceeded KRW 2.6 trillion last month, exceeding the KOSDAQ trade value (KRW 2.43 trillion).

As a result, the domestic virtual money market has been increasing and the market has become overheated. In June, an investment of USD 14 billion was made in a multistage investment in the virtual coin `Bitcoin`, and an accident occurred in which about 30,000 customer information was leaked due to the hacking of Bithumb`s employees` PCs .

As a result, the financial authorities have come up with measures to regulate them in the end, but in the wake of the rapidly expanding market conditions, it is pointed out that it is not a ‘backward North’ prescription. It was the situation that was raised without any measures while the financial authorities went through the virtual money market.

Meanwhile, the bank will use the virtual account to verify the identity of the virtual currency user and to strengthen suspicious transaction reports on the money received from the virtual currency provider. In addition, the government will revise specific financial information laws to strengthen anti-money laundering regulations on virtual currency transactions, and strengthen crackdowns through virtual currency joint detention.

However, it takes a long time until the virtual currency related laws are enacted, and the regulatory measures introduced by the financial authorities are focused on virtual currency transactions and fund raising.

Cheon Chang-min, a researcher at the Institute of Capital Markets Research, pointed out, "The financial authorities have suggested ways to make the virtual money market transparent by suggesting that they stop illegal transactions coming and going based on virtual currency transactions. However, Investors using intermediary institutions Protection measures are not clearly defined, so consumer protection equipment seems more urgent.” There is only one bill related to virtual currency transactions, and it will take a long time to pass. Besides, Park, Yong-jin, the Democratic Party lawmaker has introduced an electronic financial transaction law amendment that introduces a virtual money transaction authorization system and imposes transfer tax.

By Kim Min Soo minsu@


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