fbpx
Skip to content Skip to sidebar Skip to footer

South Korea DeFi Platforms at Risk with Possible New Ban by Financial Regulators

South Korea is steadily progressing towards a more robust and complete set of regulations to oversee crypto-related activities in the country. The Financial Services Commission (FSC) and Financial Supervisory Service (FSS) recently submitted a draft bill, the “Online-Investment Linked Finance Act”, which is slated to come into effect by August 2020 this year. The enactment of this new regulation would put a ban on P2P lending and investment products in Korea, as reported by Korean news media Joongang Ilbo.

The FSC is tightening its regulations in a bid to protect investors from ‘high-risk products’, of which cryptocurrency falls under. Also classified under this category are loans and bonds that are supported by crypto as collateral. The report highlights that as a result, there is a high possibility of DeFi platforms becoming illegal under the bill. Under current laws, DeFi platforms have enquired about the legality of their operations in South Korea and have acquired licenses to operate as a financial business instead.

It is still unclear how the proposed regulations will affect DeFi businesses in South Korea, but if it becomes impossible to operate legally in the country, the new law could very well move DeFi companies overseas where regulations are more lenient.

DeFi products and services are becoming increasingly popular in the crypto sphere. CB Insights found that demand for decentralized finance has grown exponentially in the past year, overtaking that of ICO projects.

You may also want to read: Decentralized Finance Takes Over in 2020 as Interest in ICOs Fizzle Out

Leave a comment

About SuperCryptoNews

SuperCryptoNews is a global leading blockchain & crypto news provider, covering daily news focused on trading and investment developments in bitcoin and crypto. We bring you expansive crypto news coverage around the world. We offer many thought leadership opinions from blockchain experts and leaders of the industry.

Subscribe to SCN

© Copyright of Novum Global Consultancy Pte Ltd {2020, 2021}. All rights reserved.

111 North Bridge Road, 21-01, Peninsula Plaza, Singapore 179098.

Phone: +65-80282938

Contact Us   |   T&Cs   |   Privacy Policy   |   About Us

About SuperCryptoNews

SuperCryptoNews is a global leading blockchain and crypto news provider, covering daily news on the latest tech and trading developments in crypto. We bring you expansive crypto news coverage especially in Asia, with a focus on Singapore, Thailand and Southeast Asia.

Follow Us On

© Copyright of Novum Global Consultancy Pte Ltd {2020, 2021}. All rights reserved.

Contact Us   |   T&Cs   |   Privacy Policy   |   About Us