As crypto-related companies shut down successively, voices of concern come from the cryptocurrency industry. Uncertainty over the years of regulatory gaps is the main reason for closure.
According to the cryptocurrency industry on the 30th, Bitberry, which is one of the leading cryptocurrency wallet companies in Korea, announced the termination of the service. This is due to worsening market conditions and regulatory uncertainties. This is why the cryptocurrency industry strongly insists on the need for the institutionalization of the cryptocurrency market.
The cryptocurrency industry pointed out ‘zero governmental regulation’ as the reason why Bitberry was not profitable despite its popularity due to user convenience. An industry insider said, “The blockchain market recession and the government’s zero regulation stance seem to make it difficult to expect a positive business outlook.”
Indiscriminate cryptocurrency exchanges also exacerbated low profitability. The cryptocurrency exchange PrixBit said, “We believe that the cryptocurrency market has a growth potential, but it is not possible to running the exchange normally due to internal and external negative effects.” “We wanted to provide incentives for our users and encourage mutual growth of everyone, however we had no choice but to close our business because of a lot of new exchanges,” he added.
Cryptocurrency industry looking forward to institutionalization… “Resolve regulatory uncertainty”
Especially, the cryptocurrency industry pointed out that the critical mistake was that the government excluded the designation of venture companies on cryptocurrency exchanges. In 2018, the Ministry of SMEs and Startups excluded cryptocurrency asset trading and brokerage businesses from designation of venture companies because of their illegal activities such as overheated speculation and fund raising business without permission. The government said, “As a result of illicit activities such as overheated speculation, fund raising business without permission, money laundering, and hacking related to the blockchain-based crypto asset trading and brokerage business, we designate it as an industry that is not included in venture companies, and we hope to form a healthy industrial ecosystem.”
An official from the industry said, “With the government excluding cryptocurrency exchanges from venture business, cryptocurrency exchanges are not different from entertainment business.” “This perception cannot be improved without institutionalization.” He also said, “The start-ups that have survived so far in the cryptocurrency market should not run their business unfairly outside the law.” “We are waiting for regulatory uncertainty to be resolved through the Specific Financial Transaction Information Act,” he added.
‘Special Financial Transaction Information Act’ is a bill that reflects standards of Financial Action Task Force (FATF). This bill includes Information Security Management System (ISMS) verification of cryptocurrency businesses and operation of real name accounts for deposit and withdrawal. The revised Special Financial Transaction Information Act does not pass in the National Assembly.
The cryptocurrency industry argues that the government’s zero regulation stance and regulatory uncertainty cause a huge risk to cryptocurrency industry, where is occupied by startups.
A cryptocurrecny exchange official said, “It is impossible to expect how the related enforcement decree will be enacted when the Special Financial Transaction Information Act does not pass in the National Assembly.” “Well-funded large companies can be prepared for it in lots of different ways, but the startups have limited sets of measures,” he added.
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