South Korea is a shining example of the potential for prosperity and liberty that democracy can provide for a nation. The contrast to its autocratic neighbor to its north is stark. Yet, new cryptocurrency regulations are threatening to stifle growth in this bourgeoning sector. In an attempt to enact new anti-money laundering safeguards, it has instead erected regulatory hurdles that have already led to its first major financial casualty.
The South Korean division of crypto exchange OKEx announced that it will be shutting down rather than try to comply with the onerous new regulations. The Financial Transaction Reports Act details the new processes that South Korean crypto exchanges are now required to follow. As part of the new guidelines, Virtual Asset Service Providers (VASPs) are required to adhere to compliance inspections and must verify customer identities. VASPs must also file suspicious transaction reports with the Korea Financial Intelligence Unit and they fall under the auspices of the Korean Financial Services Commission (FCS).
To help alleviate the initial compliance burden, providers have been granted a grace period of six months. Despite this initial reprieve, a spokesperson for OKEx said, “Up until now we’ve provided most of our services with fiat on-ramps, but forming a bank partnership (for real-name accounts) is realistically out of reach.”
Changes to crypto regulations began in late 2020 when revised legislation mandated that VASPs must report the names of their customers to the FSC. It appears this was the beginning of the end of a crypto free market in the Asian nation. Indeed, whenever governments begin gathering names of innocent people, the results usually do not end well.
Herein lies the problem with crypto regulatory compliance. If crypto exchanges and projects attempt to adhere to regulations, it usually begins a downward spiral toward increasingly oppressive rules. Ultimately, the gradually restrictive policies create an environment that makes it virtually impossible for newcomers to exist or thrive. So, we see the endgame of these attempts to control markets is to preserve the power of the most funded and established entities and to push out new competition.
The irony is that the banks and financial powerbrokers who are able and willing to comply would not have survived if these same restrictive policies were in effect during their infancy. This is part of their well-known strategy of moving the goalposts as it suits them. They create rules that are so cumbersome that it forces projects to exist beyond jurisdiction. Then they hurl accusations at these projects for their lack of compliance and refusal to play their rigged game.
META 1 Coin Trust decided long ago that crypto regulatory compliance is not a winning game. We set up a private non-statutory trust as a secure party creditor to retain our honor in the legal system and operate beyond the jurisdiction of any specific Federal or State agency. META 1 Coin is neither a security, commodity nor a currency – it is a private token traded on a private exchange that serves as a replacement for sovereign currency. Customer accounts are verified following Know Your Customer (KYC) processes to ensure that only Humans are purchasing the coin – not corporations or other institutions – so there is no valid basis for any contract attempts by any agencies. This approach will likely form the basis for other crypto projects in the future as more nations begin tightening their grip on civil liberties with unlawful attempted regulations of private transactions.