South Korea cryptocurrency exchanges have submitted a legal challenge to the government claiming its new restrictions are “unconstitutional.”
Law Firm: Govt. Is ‘Devaluing’ Virtual Currencies
As local news outlet Korea Times reports today and Wednesday, Seoul-based law firm Anguk Law Offices has filed a complaint on behalf of a group of investors and exchanges, and is “preparing follow-up appeals.”
South Korea enacted restrictions last month as Bitcoin and altcoins shot up in value.
Among them, lawmakers will now require traders to use their real name when converting cryptocurrency, while from as early as January 20, a raft of identity data will be visible from those who engage in the practice.
This, Anguk claims, is in breach of constitutional law, and a different approach to regulation should be sought in what was once the world’s biggest trading hub.
“The government’s regulation is devaluing virtual currencies by making trading very difficult,” it said in a statement. “Thus, this is an infringement on people’s property rights by the government’s unlawful measures.”
Taxation of gains made from Bitcoin and others is also becoming a major focus for the country’s authorities, with plans to tighten up reporting obligations causing a stir among investors.
Korea’s Crypto-Battle On Several Fronts
The increasingly draconian approach to regulation contrasts strongly with that taken by neighboring Japan, Bitcoinist has reported, with the country continuing to foster adoption and use of Bitcoin. Analysts have even suggested it could add 0.3% to Japan’s GDP.
“We agree that regulations are necessary,” Anguk lawyer Jeong Hee-chan meanwhile continued.
But regulation should come after related laws are implemented. The petition is also a request for the government to respect people’s property rights and introduce regulations after reaching a social consensus.
Seoul is also facing broad suspicions that North Korea is hacking cryptocurrency exchanges in order to stockpile coins for its own ends, and has been doing so for a number of years.
An experiment last month also saw a media outlet hire private white-hat hackers to test exchange security, leading to multiple successful account compromises.
What do you think about Korea’s cryptocurrency trading restrictions? Let us know in the comments below!
Images courtesy of Shutterstock