Policy of Korean Government for Virtual Currency and Block Chains: from Absurd to Chaos

Virtual currency is one of the seriously controversial issues in Korea. Until now Korean government does not clarify the direction for virtual currency policy. So, this article tries to explore a proper way of Korean government for virtual currency. Upon the absence of any legal framework, at first, Korea should legally define what virtual currency is. It is necessary to distinguish virtual currency with blockchain technology which serves a platform for virtual currency. Second, based on the legal definition, the Korean government will try to find out real risks and anticipated potential risks of virtual currency transactions and the related financial services. This article recommends the government an objective and scientific risk assessment process for the better recognition. Particularly, the government should disregard certain abstract concepts describing virtual currencies. Third, the Korean government will design a system and instrument to eliminate, to avoid, to reduce, or to control the risks, particularly the serious ones. Above all things, the government should prevent virtual currency from funding criminal activities and from using for fraudulent scheme and money laundering. Young Koreans who are dreaming of getting rich overnight through virtual currency should be saved from their addictive speculation. Such a dream is likely to turn into a nightmare soon. Also, international cooperation is required to adopt minimum standards for virtual currency transactions and to make those standards enforceable. If the Korean government would assure that it could eliminate or control the risks of virtual currency transactions and related services, it could legitimize the transactions step-by-step.