Finance Monthly July 2019 Edition

22 www.finance-monthly.com FINANCIAL INNOVATION & FINTECH - CRYPTO ASSETS The law in China The primary regulator to monitor crypto asset regulation in China is the People’s Bank of China (the “PBOC”). Since the rise in interest and respective price of crypto assets towards the end of 2017, different concepts and activities have been created by the crypto asset market participants. Some of these activities include the creation and issue of different types of crypto asset such as Security Tokens, Stable Coins and Exchange Coins. The concept of crypto asset mining is a regular and profitable (for some) activity, which involves owners of powerful computers connected to particular blockchains and mining particular crypto assets. The increase in popularity has led to the creation of a large number of crypto assets with speculative prices, which were then traded on crypto asset exchanges in exchange for FIAT currency or another crypto asset. These activities encouraged the PBOC to regulate the market. It is important to distinguish what exactly is prohibited in China and what is not. Initial Coin Offerings (ICO) or activities undertaken for fundraising purposes with a crypto asset element are prohibited. This is due to widespread criminal activity and fraud, which accompanied the ICO trend in early 2018. Issuing new crypto assets is not prohibited, however, issuing them in exchange for mass funding is. Financing activities and trading relating to crypto assets are also prohibited. This includes crypto asset exchanges, which allows for the public purchase and sale of crypto assets for FIAT Crypto assets have been discussed in the mainstream media for almost two years now and in that short period of time, we have seen rapid change in the sub-culture spawned out of them, adoption by some commercial entities and adaptation of laws across the globe. In this article, Thomas Anthony Hulme explores the existing laws that affect the crypto asset markets in both China and South Korea, compares each of themand then applies the law to the current crypto asset market, whilst also briefly discussing Facebook’s recently announced crypto asset, Libra. Thomas Anthony Hulme Mackrell Turner Garrett www.mackrell.com WHAT CAN CHINA LEARN FROM SOUTH KOREA AND COULD ONE OF THE WORLD’S LARGEST ECONOMIES ONE DAY RE-OPEN THE DOORS TO CRYPTO ASSETS?