Bitcoin guilty of’policy uncertainty’ increases

(Seoul = Yonhap News) Reporter Kim Jong-hyun = As the cryptocurrency market such as bitcoin is heating up hot, the attention of policy and supervisory authorities is becoming more sensitive as investors flock.

Bitcoin jumped over 1,000% to 50,000 dollars on the 16th from 4,900 dollars per piece in March last year, and the market cap also exceeded 1 trillion dollars (about 1100 trillion won). The market capitalization is smaller than Apple’s over $2 trillion, but Tesla (approximately $685 billion) far exceeded it.

Will Bitcoin continue to soar like the mythical Pegasus (winged horse) in the future? The key is whether to maintain the investment enthusiasm of’shut up and rise’ and policy uncertainty. Regulatory risk is a variable that cannot be ignored. For the US and other governments and central banks, Bitcoin is still just a’fake currency’ that has no intrinsic value.

◇ Storm rising bitcoin… Sensitive policy authorities

On the 22nd (local time), US Treasury Secretary Janet Yellen, the epicenter of the Bitcoin surge, said, “Bitcoin is a speculative asset, cannot be a payment method, and is extremely volatile, so investors are concerned about potential losses.” Blown up. It mobilized the highest level to define Bitcoin as a speculative asset.

At a hearing on the approval of the US Senate on the 19th of last month, he said, “I think a lot of cryptocurrencies are mainly used for illegal finance,” he said. “It is necessary to consider ways to reduce such use and prevent money laundering.”

Bank of Korea governor Lee Ju-yeol attended the plenary meeting of the National Assembly’s Planning and Finance Committee on the 23rd and said, “crypto assets have no intrinsic value and will show very high price volatility in the future.” Although I didn’t talk directly, it is a message to refrain from speculating on assets that have no intrinsic value or price stability.

Central banks and governments in each country are thinking the same as Minister Yellen and Governor Lee Ju-yeol. It agrees with the view of New York University professor Nouriel Rubini that it is not a currency because there is no mediating function of value, storage and exchange, which is the three conditions of money.

Countries are extremely wary of the use of cryptocurrencies such as bitcoin as a means of black transactions such as money laundering, property concealment, terrorist fundraising, and cyber crime. Accordingly, international cooperation on cryptocurrency regulations is expected to be further strengthened.

Professor Seong Tae-yoon of the Yonsei University Department of Economics said, “From the perspective of governments and central banks in various countries, there may be concerns that cryptocurrency is used as a means to bypass money laundering or normal foreign exchange transactions, which undermines the transparency of international financial transactions and disrupts the financial market.” .

An official from the Bank of Korea said, “The world’s major countries such as the United States, Europe, and Japan have already taken or are preparing legislative measures related to investor protection and money laundering, and the relevant regulatory system is expected to continue to be supplemented or strengthened in the future.”

◇ Monitor cryptocurrency money laundering like palmistry

Virtual currency is not an asset within the institutional sphere like stocks or bonds, so there was no government department dedicated to it. There is also no industry classification code of the National Statistical Office. Until now, when there is a problem in the cryptocurrency market, it has been discussed at a meeting of the vice ministers of the Prime Minister’s Office.

However, based on the revised Specific Financial Information Act, which will take effect on the 25th of next month, the Financial Information Analysis Institute (FIU) under the Financial Services Commission will begin direct supervision with a clue that it is’related to money laundering’. The Financial Services Commission is now in charge of management and supervision.

FIU has been monitoring the suspicious flow of funds in virtual currency transactions through banks, but in the future, it receives reports directly from virtual asset providers (cryptocurrency exchanges). First of all, from the 25th of the following month to September 25th, after receiving a business report for 6 months, the reception screening and related training will be completed by the end of the year, and full-scale surveillance and supervision will begin next year.

Virtual asset providers such as Bithumb, Upbit, and Coinone must verify the identity of cryptocurrency traders, report suspicious transactions or high cash transactions of more than 10 million won, and also have a duty to keep records.

For example, you can withdraw a large amount of transaction funds in cash from your Bitcoin account and transfer them to several different accounts, appear directly on the exchange to make large amounts of transactions, or come to the exchange frequently without having a special job to send the transaction amount without using account transfer. The case of withdrawing in cash can be a suspicious case.

An official from FIU said, “I will go to the site directly from next year after training on suspicious transactions or risky transactions for virtual asset providers within the year and check whether they are properly complying with the reporting obligations.”

Domestic cryptocurrency investors are required to pay a 20% tax on profits exceeding 2.5 million won starting next year. This is because cryptocurrency is not recognized as a financial asset, so it is a heavy tax compared to stock transfer tax.

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2021/02/24 05:51 sent