By Kim Dong-uk
This is the first in a weekly series of blog posts on issues where the law meets new technologies.
Generally, laws that regulate new technologies appear well after the technologies are popularized, and this also is true in Korea. Such regulations are generally designed to reduce adverse effects on society from these new technologies, since it is naturally only after their introduction and dissemination throughout society that we can gauge any side effects.
A good example is cryptocurrency, which has lately emerged as a hot topic of conversation, as well as a feverish target of speculative investors. The concept of cryptocurrencies is a totally new one that goes beyond mere technological advancement and many governments have been caught on the back foot.
Like the Korean government, some are now rushing to pass relevant legislation and establish new regulations. In some cases, there is clear confusion on the part of governments ― as well as financial markets and wider society ― about things such as “What is the legal definition of a cryptocurrency?,” “How can fraud in issuing cryptocurrencies be prevented?” and “How can cryptocurrency exchanges be effectively regulated?”
In Korea, a social consensus has formed around the necessity of dealing with the social side effects such as excessive speculation.
But there are many conflicting arguments, such as “All cryptocurrency transactions should be illegal” or “Cryptocurrencies should be legalized and taxed.”
I personally agree with the necessity of cryptocurrency regulation, but the approach should be to reduce side effects such as speculation and to enhance the advantages of blockchain technology.
It goes against global trends to prohibit the issuance or trading of cryptocurrencies entirely. If the government pushes ahead with such excessive legislation, it will cause negative effects not only on the cryptocurrency market, but also on the potential of new technology development.
Even at this late stage, I hope that the Korean government will actively study the nature of cryptocurrency technology and introduce proper regulations to reflect the realities of the market.
Tech & Comms team
The thoughts and opinions expressed in this column are those of its author and do not necessarily reflect those of HMP Law.