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A South Korean lawmaker has proposed amending the country's Electronic Financial Transaction Act to more closely regulatecryptocurrencies.

According to several South Korean media outlets, including theFinancial NewsandSeoul Economic Daily, the proposal was put forth this week by Park Yong-Jin, a representative from theDemocratic Party who has been at the center of recent regulatory deliberations.

The amendments would seek todefine digital currency businesses and classify different partiesas digital currency traders, brokers, issuers and managers.

Itfurther mandates businesses hold deposits or provide insurance to hedge against potential cybercrime incidents, and aims toapply a 500 million South Korean won ($450,000) capital reserve threshold for any business that operates cryptocurrency trading service prior to seeking an approval from the authority.

Provisions for preventingmarket manipulation and money laundering usingdigital currencies are also included in the changes.

Parkis seeking a moreregulated environment amid recent surging prices of major cryptocurrencies like bitcoin and ethereum. Theproposalfollowsa recent panel hosted by the politicianat a public hearing to argue for regulations coveringdigital currency.

As for a next step, the bill is expected to be presented to the regular session of the National Assembly in September, at which point, it needs the approval of the country's Financial Services Commission.

As reported by CoinDesk, the financial regulator convened its first initiative last November to launcha regulatory policy on cryptocurrency. However, as of today, its policy plans still remain unclear.

Seoul, South Korea image via Shutterstock

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South Korean Lawmaker Seeks to Tighten Cryptocurrency Rules - CoinDesk