This year, governments around the world are seeking to establish regulatory frameworks for cryptocurrency. While some governments are cracking down on cryptocurrency, others are welcoming it with appropriate rules and guidelines.
Yulchon, a South Korean law firm with expertise in the digital asset class, is assisting the government in tightening oversight of the country’s exuberant crypto sector, according to the Financial Times.
South Korean citizens have substantial exposure to the crypto asset class, with over 13% of global Bitcoin trading volume coming from the Korean won. However, they have also been victims of various crypto scams.
Do Kwon, the founder of the Terra Luna ecosystem, was responsible for pushing the industry into a crypto winter last year, and it is estimated that about 200,000 South Koreans had invested in Kwon’s TerraUSD.
Last month, Coinone executives were arrested on suspicion of taking bribes to list tokens. Fearing that the executives might flee the country like Kwon, the judge issued an arrest warrant.
In June 2022, South Korean exchanges established the Digital Asset Exchange Alliance (DAXA) after the Terraform Lab collapse. Yulchon is providing detailed guidelines to DAXA, which will ultimately advise the government on regulation.
The DAXA includes crypto exchanges such as Upbit, Bithumb, Coinone, Korbit, and Gopax.
South Korea’s cryptocurrency bill has cleared the first review phase from National Assembly and is expected to become law this year, as reported by BeInCrypto. Kim Ik-hyun, a partner at Yulchon, emphasizes the need for the bills to pass quickly to protect investors as South Korea becomes more proactive in creating a regulatory framework.
Hong Kong’s recent crypto-friendly stance has attracted attention, with the city aiming to become a crypto hub. However, there is growing concern about balancing investor protection with innovation. According to an FT report, crypto-related scams in Hong Kong surged by 67% last year, and frauds worth HK$1.7 billion ($217 million) were committed in 2022. As a result, Hong Kong’s lawyers are working with regulators to strengthen crypto investor protection without hindering innovation.