For the first time in history, the Korean government has officially recognized the codec trading platform as a legitimate financial and banking institution.
Local media in Korea has reported that Korean financial institutions have completed a plan to classify pre-coded trading floors as a sector known as "pre-coding and brokerage" to enable high performance transaction platforms with support from local authorities
- From suppliers to financial institutions
For years, the Korean government has looked at legalizing the pre-coded sector with practical rules and policies, mainly to prevent large-scale attacks and possible security breaches. out, as seen in the case of Bithumb and Coinrail in early 2018.
Local finance agencies, however, fear that regulating the pre-encoded market will make the public believe that the government has legalized coding. As a result, South Korea delayed regulating the pre-encoded exchanges.
This week, local newspapers have revealed that the Korean government has agreed that pre-coded trading platforms will be viewed as legalized financial businesses, creating a new industry dedicated to pre-codec trading platform.
In short, the new regulatory framework created for the pre-coded trading platform may have a negative impact on both the trading platform and the investor, because that means that the customer knowledge policy (KYC ), anti-money laundering (AML) and customer verification will become more difficult.
Pre-encrypted trading platforms such as Bithumb, Coinone and Korbit will also likely need to revise their internal management systems and significantly enhance security measures to maintain compliance with new policies.
However, in the long run, local analysts have said that the government's decision to legalize codecs will bring large-scale investment institutions and retailers into the money market. Encryption, which allows digital assets to be considered an emerging asset type.
The Korean government will also change existing regulations to facilitate the development of decentralized applications and base classes such as Ethereum and EOS.
