Though the governments across the world are yet to come out with concrete regulations on cryptocurrencies, the pressure is being built on the establishment slowly and steadily. This is also quite evident when South Korean lawyers have sought the legal framework from the government so that it would support not only the distributed ledger technology-based (DLT) digital coins but also protect investors’ interests. Currently, there is no clarity from the government side though they are not ready to ignore the emerging sector altogether.
It is not a frequent practice that the Korean Lawyers Bar Association seeks government intervention in creating specific laws for a particular technology or business interest groups. Therefore, their latest call is a rare phenomenon and a public campaign for cryptocurrency segment, which is gaining traction across the globe. Significantly, the country is known for its high-tech innovation and is regarded as home to digital coin exchanges like Bithumb and Coinbit. However, the establishment is facing the wrath from its own experts for ignoring the DLT.
It is not just South Korea but every other country in the world is cautious about the digital currency segment though there has been enough support for blockchain technology. The DLT is hailed as the most disruptive one in a decade, i.e., after the launch of iPhone ten years ago. Interestingly, the emerging technology is not only used in virtual assets but also in other areas like supply chain management. In short, the technology is enabling decentralized environment relative to the centralized nature.
The call given by the South Korean lawyers assume significance since the bar association president, Kim Hyun, said that the government should do away from any negative perceptions on the cryptocurrencies. He also urged the government to remove the hesitation and wanted the establishment to come out with bills that should support the creation of the blockchain industry. At the same time, he has urged to take preventive steps for any side effects concerning the virtual assets.
On its part, the government indicated that it would take a decision on any regulation about DLT only after a complete study of the emerging sector. The establishment disclosed that both government and financial regulators are currently engaged in studying the blockchain technology, and they will analyze the pros and cons of encouraging the sector. The government wants the study to be completed before coming out with its course of action.
Protect From Fraud
The feature of the DLT is that it should record transactions of cryptocurrencies in such a way that protects deposits from any fraud. However, there are several incidents of hacking in the current year alone wherein more than $1 billion worth of virtual assets were stolen by cybercriminals. Since bitcoin enjoys the highest price, it is preferred by hackers too.
Currently, there is lack of clarity on the treatment of cryptocurrencies. For instance, the United States’ Securities and Exchange Commission (SEC) believe that most of the virtual assets fall under the category of securities. Similarly, though Japan is encouraging the emerging technology, it is also tightening its screws after witnessing more than $0.5 billion stolen from a cryptocurrency exchange.