The market grew due to a lack of regulations, but laws could become an obstacle in the future.
There is a need for new definitions and regulations divided by sector.

"Looking at the trading volume rankings of blockchain exchanges worldwide, Korean exchanges occupy three spots in the top 10. However, when looking at the rankings of cryptocurrencies, there are no Korean projects within the top 100."

Regarding the reason why South Korea, home to the world's largest exchange, does not have cryptocurrency, Attorney Jeong Ho-seok of Law Firm Seum stated, "One might think it is because the technology has not yet developed, but that is not the case," adding, "It is because the legal system and environment are not in place to support it."

Last month, an amendment to the Electronic Financial Transactions Act was proposed by Representative Park Yong-jin. The bill includes provisions requiring virtual currency handlers to have capital of at least 500 million won and obtain authorization from the Financial Services Commission to operate, as well as prohibiting the use of virtual currency for illegal activities such as market manipulation and money laundering.

Concerns are being raised regarding the necessity of regulation, given that the amendment is closer to regulation than promotion and blockchain has not even been defined as currency. Accordingly, a forum was organized to discuss the issues surrounding blockchain regulation.

First, we heard their position on the Electronic Financial Transactions Act. Seo-joon Kim, Vice President of Hashed Lounge, a blockchain-specialized meet-up group, said, “It has the largest trading volume in the world, and there was room for growth due to the lack of regulations. It is necessary to approach this by maintaining the current state.”

Attorney Jeong stated, “The legal definition of cryptocurrency is important, and if it remains ambiguous, fear may outweigh freedom. In this regard, it is significant that it has entered the institutional framework,” adding, “This has served as an opportunity to change perspectives on whether or not ICOs can be conducted domestically. It seems that the law can serve as a means of activation rather than a regulation.”

Decentralization is a key aspect of the blockchain concept. When discussing institutionalization, government intervention cannot be excluded; thus, a point of contention has arisen regarding how the government, as a centralized entity, should embrace decentralization to benefit the blockchain industry.

The development of institutions does not necessarily lead to the revitalization of the market.

Vice Representative Kim viewed it as natural for the government to feel burdened, given the unpredictable nature of social change and the situation where it appears to be entrusting networks of trust. However, he pointed out that considering the market has become more active during the political vacuum, the government should move toward negative regulation, while incidents and accidents within the market must be regulated. He stated that recognizing that the government cannot unilaterally control decentralized projects, systems must be established in a direction of coexistence.

In response to this, Attorney Jeong explained that while Europe has developed systems, its market has not been 활성화 (activated), advising that the development of systems does not necessarily lead to market activation. However, he said that from the government's perspective, equity must be considered, and while the market's role is significant, there are still things the government needs to do.

There was an incident in which the personal information of members was leaked after an employee's PC at Bithumb, the largest exchange in Korea, was hacked. Discussions also arose regarding how to regulate security. Attorney Jeong emphasized that it is crucial to clearly distinguish whether the regulation concerns the blockchain itself or the blockchain environment. This is because he believes that the requirements for physical and human resources, as well as security requirements, constituting the blockchain should be regulated within the environment.

Blockchain is a project designed to avoid the judgment of mediators, so having a review body make a judgment runs counter to that goal.

Vice President Kim likewise believed that regulations regarding blockchain and the environment require different approaches. “Personal information leakage is a problem not only for blockchain but for all online services. Strict regulation where necessary will serve as the driving force for market development,” he said.

Opinions were also expressed regarding the regulation of ICOs (Initial Coin Offerings), which are currently the most contentious issue concerning cryptocurrencies. The United States and China are moving in the direction of regulating ICOs. Vice President Kim explained, “Blockchain itself is a project designed to avoid the judgment of intermediaries, so having review bodies make judgments runs counter to that goal,” adding, “The emergence of nonsensical ICO projects is due to the market being in its early stages. As the market matures, they will naturally be filtered out.”

Concluding the discussion, Attorney Jeong stated, “The laws enacted to date were created on the premise that identity is verified.” "As a result, there are still many problems with applying laws that are not based on blockchain," he pointed out, adding, "It is desirable to redefine virtual currency and regulate it through new legislation as needed for each sector."