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Korean Gov’s Urgent Measurements on Cryptocurrency Violate Constitutional Values

Korean Gov’s Urgent Measurements on Cryptocurrency Violate Constitutional Values

Korean Situation as of Jan 2018

I would like to present a news article(http://www.koreatimes.co.kr/www/biz/2018/01/488_241850.html) about our constitutional lawsuit:

Constitutional Court to decide on digital token

A Seoul-based law firm filed a constitutional appeal over the government’s regulations on cryptocurrency trading, saying regulating the trade through administrative guidance without any legal grounds is an infringement of property rights. According to Anguk Law Offices, Tuesday, it filed the appeal Dec. 30 through the Constitutional Court’s online appeal system.

The law firm is preparing a series of follow-up appeals filed by virtual currency investors and exchanges. In its appeal, the law office claimed cryptocurrencies are not legal tender but a property or an asset that can be exchanged through legitimate currencies or other goods with economic value.

But the government is exerting “unconstitutional” authority through its regulations released Dec. 13 and 28, according to the law office.

The government announced the regulations to control Korea’s coin trading frenzy, which became explosive during the past several months.

Through the regulations, the government has been guiding banks to stop allowing exchanges to open virtual accounts for traders. Instead, the government said it will have exchanges transfer money through investors’ “real-name accounts” that can verify not only the real name of the account holder but also other identity information, to deter money laundering and other illegalities.

Currently, most virtual currency exchanges here use virtual accounts linked to their bank accounts because virtual accounts allow exchanges to manage clients’ money more easily.

After the announcement, banks have stopped allowing exchanges to open new virtual accounts, thus making it impossible for exchanges to accept new investors. The real-name based trading is expected to begin as early as Jan. 20.

The government does not recognize virtual currency as a legitimate currency or a financial product. Since there is no financial law affecting those tokens, they are tantamount to commodities or goods, which can be traded freely unless there is no law affecting them, the law office claimed.

“The government’s regulation is devaluing virtual currencies by making trading very difficult,” the office said in a statement. “Thus, this is an infringement on people’s property rights by the government’s unlawful measures.”

“We agree that regulations are necessary,” said lawyer Jeong Hee-chan at the offices. “But regulation should come after related laws are implemented. The petition is also a request for the government to respect people’s property rights and introduce regulations after reaching a social consensus.”

“It is very worrisome that the government is likening investors’ success to a morally reprehensible speculation without sufficient review of it,” Jeong said.

Opportunity in Korean Market

Korean government is expected to make several acts and amendments within about 12 months. These legislations will relate to tax aspects of cryptocurrency trade.

We think these 12 months would be golden days for foreign cryptocurrency traders looking into Korean markets.

Actually, for now, there are few law firms with understandings of technical aspects of cryptoproperty here in Korea.

We have done many cryptoproperty-centered FDI projects including setting up Korean LLC, branches, etc.

If you set up a company, that company can buy cryptocurrencies from overseas as a trade affair. Of course, your company can exchange those for cash like KRW in Korea. After corporate income tax clearances, your company can remit the rest to shareholders residing in US as dividends by T/T.

We provide you with all legal advice and service for (1)office lease contract and related matters, (2)incorporation as a limited liablity company(stock company), (3)business registration for tax, and (4)bank account opening for only 6,000USD(v.a.t. and incorporation registration tax included). We also provide you with total legal advice on monthly basis(only 1,100USD per month) for sufficient advice hours and tax accounting matters.

Our services are provided in two steps :

(1) pre-incorporation advice : Time charge with hourly rate of 200USD/0.02BTC/0.2ETHE(700USD global cap)

(2) incorporation project : The amount of fee depends on the result of preincorporation advice and the amount of initial capital inflow (usually 6,000USD in case of 1million USD capital inflow)

If you would like to prepare for setting up some form of entity in Korea for your business, please start our ‘preincorporation advice’ track by depositing one hour charge in advance and noticing it to us.

Thank you.

Mr. Heechan Jeong

Anguk Law Offices (hcjeong@anguklaw.com +82-2-3210-3330)

+82-10-2774-3211 ( Mobile )

SOMERSET Palace Seoul Chamber No. 304, 85 Susong-dong, Jongno-gu, Seoul, 03143 KOREA

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