South Korea Proposes Ban on Crypto Purchases with Credit Cards

South Korea’s Financial Services Commission (FSC) has announced a proposal to amend its Enforcement Decree of the Credit-Specialized Financial Business Act, aiming to ban crypto purchases with credit cards.

The proposed amendment plans to restrict the use of credit cards for purchasing cryptocurrencies on foreign exchanges. According to the FSC, it is driven by concerns over illegal outflows of domestic funds, money laundering, and the fostering of speculative behavior in cryptocurrency trading.

Korea FSC Highlights Risks in Overseas Crypto Trading

Included in the Content section, the FSC addressed, “Concerns have been raised about illegal outflow of domestic funds overseas due to card payments on overseas virtual asset exchanges, money laundering, speculation, and encouragement of speculative activities.”

In addition, the FSC expected that “a basis for cooperation with international brands will be established and prevention of foreign currency outflow and money laundering will be strengthened.”

The proposal listed a public feedback period extending until Feb. 13, allowing for input and comments from individuals and organizations. Following this period, the amendment is expected to undergo review and be voted on, with the goal of implementing the new rules in the first half of 2024.

South Korean Officials’ Crypto Transactions Exposed by Anti-Corruption Probe

A recent investigation by the Anti-Corruption and Civil Rights Commission in South Korea has uncovered substantial cryptocurrency trading activities among the country’s lawmakers.

Over the past three years, they collectively traded virtual assets worth approximately 125.6 billion won ($97.6 million). The findings were based on a 90-day inspection of transaction records of all 298 sitting lawmakers from May 30, 2020, to May 31, 2023.

The commission’s report identified 18 lawmakers who owned virtual assets, with 11 engaging in active trading. The buying and selling transactions of these lawmakers amounted to 62.5 billion won ($48.4 million) and 63.1 billion won ($48.8 million), respectively.

Among the various cryptocurrencies traded, Bitcoin was the most popular. The report also revealed a diverse portfolio of virtual assets, encompassing 107 different types. One lawmaker was identified as conducting 49 crypto transactions without reporting them, citing a closed exchange account.