These are some of the most frequently asked questions about Bitcoin and Bitcoin Center Korea, followed by our general responses.
NOTE: Bitcoin is ever evolving technology, and thus the views related to its current trends are also ever evolving. For such reasons, the responses here should only be taken as general references. They should not be considered definitive answers or legal statements in any way. They should also not be quoted or used for any other purposes without permission.
- As far as we know, Bitcoin Center Korea is the only offline cryptocurrency-exchange establishment in Korea. How did it come to be, and what exactly do you guys do?
Contrary to popular belief, Bitcoin Center Korea is actually not an exchange but rather a community center and incubating space for software development. As a hub for Bitcoin enthusiast and travelers, we do allow P2P (peer to peer) exchange of Bitcoin to cash in Korean Won from time to time. We simply help educate our visitors how to use and trade Bitcoin, but the actual exchange happens amongst individual users. Since Bitcoin is a true peer to peer digital money, users can send/receive/exchange Bitcoins anywhere in the world without any third party trust as long as there is an internet connection. [Response Date: 2017-07-31]
- What is the demand for cryptocurrency exchange like in Korea?
Although it is hard to obtain statistics for offline cash exchange volumes, we assume that it probably is minimal compared to the online exchange volumes. As more and more online exchanges offer the convenience of trading Bitcoin using computers or smart phone with ease, most users these days tend to use online exchanges such as CoinOne, Korbit or Bithumb. Trading volume of Korean exchanges online currently is fourth largest in the world. [Response Date: 2017-07-31]
- Future plans, direction, etc.
We plan and continue to be the hub for all things Bitcoin, Blockchain and other innovative/disruptive technologies in the future. We would like to bridge the gaps between users, developers, startups and investors in Seoul and beyond by keep offering education and other resources related to Bitcoin and more. [Response Date: 2017-07-31]
- Initial Coin Offerings are gaining more momentum. What are legal issues for bitcoin investors for Korea specifically? How about cryptocurrency exchanges?
Currently the legal issues in Korea are not any different from other countries except maybe the US with the new SEC announcement. Basically, ICO’s that are not directly linked to Korean corporations or Korean banks are outside the jurisdiction of the Korean regulation. Most ICO’s today are in some neutral third countries such as Switzerland or Singapore for this reason. [Response Date: 2017-07-31]
- What are recent legal developments in cryptocurrency in Korea?
For Bitcoin, we are in the process of creating a bill to define what Bitcoin is and where in the regulation and tax code it belongs to. It is in the early discussion stage. [Response Date: 2017-07-31]
- How do these compare with other jurisdictions in Asia, especially Japan and Hong Kong?
Japan took the lead and already passed the law regarding Bitcoin but the local sources tell us that they are having some trouble enforcing it. Korea and Hong Kong are a step or two behind Japan and similar, we think. So far there really isn’t any hard regulation. Korea is also amending its foreign exchange regulation to include small remittance business license. Such license will allow non-banking license companies to do international remittance using other means including Bitcoin. [Response Date: 2017-07-31]
- How do these regulations fall short?
Obviously having some kind of regulation will have some side effects. If the regulation favors Bitcoin trading with no capital gains or VAT on Bitcoin trading, then exchanges would benefit. This, however, without the proper categorization of Bitcoin can create some conflict even among different branches of Korean government (Bank of Korea, Financial Services Commission, Ministry of Strategy and Finance, etc). When such conflicts exist, the industry experiences set back overall because many business activities can be held as hostages caught in the crossfire. In FinTech or any kind of tech industry, time is money and competitiveness. Any delay due to conflict of interest among different regulatory bodies will result in loss of time and competitive edge for Korean startup companies. [Response Date: 2017-07-31]