Korean Lawyers Take Government to Court over Crypto Regulation
A law firm from Seoul has decided to address arbitrary measures taken by authorities to regulate cryptocurrency trade. Korean lawyers have filed an appeal accusing their government of “unconstitutional” infringement on property rights. Newly imposed rules are devaluing virtual currencies, they say.
Also read: Koreans Deposited 64 Times More Fiat Into Crypto Exchanges in 2017
Order! Constitutional Court to Decide
Anguk Law Offices filed their appeal through the Constitutional Court’s online system at the end of December, The Korean Times reports. Regulating the trade of cryptocurrencies through administrative guidance has no legal grounds, its justification reads. “We agree that regulations are necessary. But they should come after related laws are implemented”, lawyer Jeong Hee-chan said, quoted by the newspaper. Jeong and his colleagues also called for the government to respect the property rights of its citizens and regulate only after reaching a social consensus.
The Seoul-based firm believes ministers are exerting “unconstitutional” authority through regulations on cryptocurrency trade introduced last month. The measures were meant to control Korea’s coin trading frenzy in a year that saw Bitcoin reaching $20,000 USD. The south of the divided peninsula is a major cryptocurrency hub hosting large-scale exchange operations.
The recent market explosion presented new challenges to Korean authorities and they attempted to dampen crypto markets. The government discussed measures to deal with growing cryptocurrency speculation and local exchanges were forced to revise policies in order to comply with new regulation. A system to enforce identity verification of cryptocurrency traders should be implemented around January 20, preventing anonymous trading.
It Ain’t Over Till It’s Over
With the new regulations, Seoul has attempted to prevent exchanges from opening virtual bank accounts for traders. The government has insisted on implementing “real-name” policies to verify personal details of account holders. The stated goal being “to deter money laundering and other illegalities”. Cryptocurrency exchanges in the country have largely complied with changes to restrict certain traders and end the “virtual accounts” practice that helped them manage clients’ money more easily.
Currently, the South Korean government does not recognize bitcoin and other cryptos as legitimate currencies. They are not considered financial products either. Well, since financial law is not applicable to the digital coins, they should be perceived as commodities and traded freely, the smart lawyers claim. They admit cryptocurrencies are not legal tender but then a crypto could only be a property or an asset. And assets can be exchanged with legitimate currencies or other goods.
It doesn’t stop there: Anguk Law Offices went even further, accusing the government of devaluing coins by creating obstacles to trading. “Thus, this is an infringement on people’s property rights by unlawful measures”, the law firm said in a statement. It is also preparing a series of follow-up appeals filed by cryptocurrency investors and exchanges. Lawyers have also expressed real concerns that “the government is likening investors’ success to a morally reprehensible speculation without sufficient review of it… It is very worrisome!”
Do you think Korean lawyers will succeed in their attempt to change government policies on cryptocurrency trading? Tell us in the comments section below!
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