South Korea to require crypto exchanges to share user data with lenders

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Cryptocurrency enthusiasts say that a main benefit of the technology is immunity to bans and other forms of state-imposed regulation.

The market has been a roller coaster since news that South Korean politicians were considering a cryptocurrency ban in the country, which controls about 15% of the cryptocurrency market.

One method Lazarus Group employed was the distribution of Hangul Word Processor (HWP) files through email, the South Korea equivalent of Microsoft Word documents, with malware attached. The tax department said that there are 2.5 million people registered to trade in cryptocurrencies in the country.

A lack of clarity characterizes South Korean government messaging about its regulatory plans.

In the latest twist in an ongoing saga, South Korea reportedly intends to make cryptocurrency operators exchange user data with banks, on Sunday, citing a single unnamed government official. While tax advisors are providing clients with their view on whether this constitutes a business income (or loss) or a capital gain (or loss), a word of clarification will help tax-payers and could also increase tax collections.

According to the source, lenders will be obliged to check whether crypto exchanges comply with the requirement. The same system will also facilitate the user data exchange between cryptocurrency trading platforms and banks.

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Do you think that foreign citizens should be allowed to trade cryptocurrencies in South Korea?

Last week, cryptocurrency traders also appeared to be spooked as the chorus of warnings from regulators grew louder.

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The six banks include Shinhan Bank, NH Bank and the Industrial Bank of Korea.

Financial authorities will focus on inspections into whether banks take appropriate measures to stop transactions if cryptocurrency exchanges refuse to provide customers' information, officials said. These fears would begin to fade in a slow manner and this would be beneficial as more regulation is there, the more it is likely to attract the bigger traders and investors.

Research by Ernst & Young has also found that more than 10% of the funds generated by initial coin offerings are stolen by hackers, Reuters reported.

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