Ministers in the South Korean cabinet have reached a consensus to exclude companies trading virtual currencies from the classification of venture business, a class which the crypto trading companies belong prior to this time. This news broke on the frontline media platform in the country Business Korea on September 27 and has spread like wildfire in the cryptocurrency world.
Exclusion of Crypto Assets Dealings from Venture Business
Prior to this time, it was reported that the South Korean Ministry of Medium-Sized Enterprises (SMEs) and Startups (MSS) has ruled out virtual currency trading exchanges from the legislation which governs venture businesses.
While the recent Cabinet meeting was on-going, the cabinet headed by the Prime Minister Lee Nak-Yeon presidency, the government revised the “Enforcement Decree of the Act on Special Measures for the Promotion of Venture Businesses.” This is clearly a means to remove all sale and brokerage of digital assets using the blockchain technology from venture business classification.
The New “Exclusion” Amendment
Apparently, this new legislation is a step to formally build on the decision made in August by its ministries. Based on the report, it appears the rationale behind this new amendment according to the South Korean government is “to strengthen the cooperation of related institutions” and to shield its citizenry from the “illegal activities” which remains married to the digital assets business despite several divorces (not in the literary sense though).
While making reference to its decision, the South Korean government noted that:
“Money laundering and hacking related to blockchain-based digital asset trading and brokerage business are occurring, we will set it as a business sector not [to be] included in the venture enterprise and form a sound industrial ecosystem.”
The ironic dilemma of this situation is that the Ministry of Science and Information Communications Technology (MSICT) almost concurrently released a press statement last week pledging its support for the domestic blockchain industry; stating that it was a move to advance technological growth.
The situation at hand is a very sensitive one, as the question of whether or not blockchain will advance South Korean technology is not relevant here as the technology has been trusted and tested in other geographical stratospheres.
The rationale behind this move to exclude crypto-related companies from the venture business category might be the criminal activities related to the crypto sector, and the government would eventually have to spend more on cybersecurity to curb this vice.
However, there is such a thing as necessary evil and in this case is the cryptocurrency trading companies, the Korean government have several other options to explore rather than excluding this companies owing to the fact that the contributions of this startups outweighs the problems, would a government exclude internet providers because the internet fraud rate is alarming?