Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Bitcoin is unique in that there are a finite number of them: 21 million.
South Korea is a country where Bitcoin and other digital currencies have gained popularity in recent years. The South Korean government has been supportive of the development of the cryptocurrency industry in the country.
However, the government has also been cracking down on illegal activities related to digital currencies.
In March 2018, the South Korean Financial Services Commission (FSC) announced a set of regulations governing cryptocurrency exchanges in the country. The regulations require exchanges to verify the identity of their customers and comply with anti-money laundering rules.
NOTE: WARNING: The legal status of Bitcoin in South Korea is uncertain and constantly changing. As such, it is important to stay up-to-date with the latest developments regarding the legal status of Bitcoin in South Korea. Additionally, it is important to be aware that there are various laws and regulations that apply to cryptocurrency transactions which may be different from those applicable to traditional financial transactions. Therefore, it is recommended to seek professional advice before engaging in any cryptocurrency activities in South Korea.
The FSC also banned anonymous trading of cryptocurrencies on exchanges and imposed a limit on how much money South Koreans can invest in digital currencies.
The South Korean government has also been investigating cases of tax evasion and money laundering involving cryptocurrencies. In December 2017, the government raided three major cryptocurrency exchanges in the country – Bithumb, Coinone, and Korbit – on suspicion of tax evasion.
In March 2018, prosecutors indicted six executives from two major cryptocurrency exchanges – Bithumb and Coinone – on charges of embezzlement and fraud.
Despite the crackdown on illegal activities, the South Korean government has continued to support the development of the cryptocurrency industry in the country. In February 2018, the government announced plans to allow ICOs (initial coin offerings) in the country.
And in March 2018, the FSC chairman said that the regulator was considering launching its own digital currency exchange.
So far, there has been no definitive answer from the South Korean government on whether Bitcoin and other digital currencies are legal in the country. However, it appears that the government is taking a cautious approach towards regulating cryptocurrencies.