From January 30, South Korean cryptocurrency traders will no longer be able to anonymously negotiate crypto-currencies like Bitcoin and Ethereum.

Last week, major cryptocurrency trades on the local market, including Korbit and Bithumb announced that starting Jan. 30, anonymous traders will be prohibited from investing in the market. Starting today, investors are required to undergo a rigorous audit process to invest in the market.

The Korbit team said in a statement obtained by Cointelegraph:

"Non-Korean nationals, Residents and non-residents will not be allowed to drop KRW at any domestic cryptocurrency exchange when the new KRW deposit method is implemented In order to comply with the regulations on the identification and the fight against money laundering that are applied by the government, the current KRW deposit method will be completed by the end of January 2018. "

Kookmin Bank, the largest bank in the country, also ceased to provide virtual bank accounts to cryptocurrency exchanges. In South Korea, trading platforms provide each operator with a virtual bank account with which traders can use to withdraw and deposit the Korean won without using a real bank account. From the virtual bank account, traders can then opt out of their real bank accounts.

Instead, Shinhan Bank, South Korea's second-largest bank and five other financial service providers began to support businesses and investors. Existing traders are required by local stock exchanges to use the bank accounts of Shinhan Bank and other banks in the country that support investments in cryptocurrency.

In early December, South Korean Justice Minister Park Sang-ki was severely criticized. his premature statement on a non-existent cryptocurrency trading ban bill. Clearly, since then, the South Korean government has worked to regulate the market, ensuring investor protection and corporate compliance.

It is optimistic that the South Korean government has adopted a market regulation approach rather than banning the cryptocurrency trade, as suggested by Minister Park in December. But experts fear that the South Korean government is imposing excessive regulations on the local market that could hamper developments in the cryptocurrency sector.

Yoon Seok-Hyun, professor at the most prestigious university of South Korea. The Seoul National University said the government is rushing to put in place strict regulations that could have a negative impact on businesses and investors in the sector. Yoo noted:

"The proposal to ban false and premature cryptocurrency trading presented by the country's justice minister was rushed and unnecessary.The government must prepare public blockchains to be used as innovative platforms after excessive speculation in the cryptocurrency market has decreased.It is important that the government properly regulates the market in an uncertain sector such as the cryptocurrency market. "

Fiscal Policy

Most investors outside the South Korean market are unaware that cryptocurrency trading will soon be invited to send details of any transaction exceeding a certain amount South Korean tax authorities.

Considering crypto-currencies as savings does not leave investors subject to tax. But, selling cryptocurrencies after recording the gains from the investment can be subject to capital gains tax. Local tax authorities have asked South Korean stock exchanges to implement a system that autonomously transfers the transaction details of users conducting important transactions for the tax investigation.

In conclusion, the approach of the South Korean government is optimistic completely ban the cryptocurrency trade. But, in the future, it will be difficult for local investors to freely trade large amounts of cryptocurrencies.