Crypto Trading Ban In South Korea Is Unconstitutional – Korean Law Firm

News, Regulation | January 4, 2018 By:

South Korean law firm Anguk Law Offices has filed a constitutional appeal over government’s upcoming cryptocurrency trading regulations. The law firm filed the appeal last week through the Constitutional Court’s online appeal system.

On December 28, the South Korean government announced that it will prohibit local cryptocurrency exchanges from allowing users to make transactions through anonymous accounts. The government said that only real-name bank accounts and matching accounts at cryptocurrency exchanges can be used for deposits and withdrawals. Issuance of new virtual accounts to cryptocurrency exchanges will be banned. Cryptocurrency exchanges will also be banned from issuing virtual accounts to new clients. The new measures are set to be introduced on or around January 20.

The law firm argues that the upcoming cryptocurrency trading regulations are “unconstitutional.” The law firm stated that regulating the trade through administrative guidance without any legal grounds is an infringement of property rights.

Anguk Law Offices asserted in its appeal that since cryptocurrency is not officially considered as a legal tender but a property in South Korea, it can be exchanged through legitimate currencies or other goods with economic value.

“The government’s regulation is devaluing virtual currencies by making trading very difficult,” the law firm said. “Thus, this is an infringement on people’s property rights by the government’s unlawful measures.”

Jeong Hee-chan, a lawyer at Anguk, said that they agree that regulations are necessary. But regulation should come after related laws are implemented. He added that the petition is also a request for the government to respect people’s property rights and introduce regulations after reaching a social consensus.

“It is very worrisome that the government is likening investors’ success to a morally reprehensible speculation without sufficient review of it,” Hee-chan said.

Anguk Law Offices said it is preparing a series of follow-up appeals filed by cryptocurrency investors and exchanges.