South Korea will introduce measures to curb criminal activity and overheated speculation related to cryptocurrencies, most importantly it will ban banks from holding or accepting such currencies as security for financial transactions. It will also prohibit minors and non-residents from setting up trading accounts, and a ban on banks from holding or accepting such currencies as security for financial transactions.

The Prime Minister’s Secretariat said Wednesday that the new rules are aimed at protecting holders of virtual currencies from crime and chilling speculation. He also stated that bills to implement the measures will be drafted soon.

Most importantly, banks will be banned from purchasing or holding cryptocurrencies, or investing in businesses handling them. The secretariat called on banks to strictly screen adults when they withdraw or deposit money. This is a major speed bump for the industry as Korea is a huge crypto hub and is host to many exchanges and crypto/blockchain companies.

The secretariat said the measures are aimed at protecting users who lack sufficient knowledge from incurring losses, and preventing cryptocurrency exchanges from becoming places of speculation.

There is wide speculation that in 2018, the Korean government will start requiring cryptocurrency exchanges above a certain size to have certification of compliance with international information security standards.

The information in this blog post (the "Blog" or "Post") is provided as news and/or commentary for general informational purposes only. The information herein does not, and shall never, constitute legal advice and therefore cannot be relied upon as a legal opinion. Nothing in this Blog constitutes attorney communication and is not privileged information. Nothing in the Post or on this website creates any kind of attorney client relationship or privilege of any kind.