South Korea Recognizes Crypto Exchanges With Launch of Blockchain Classification System

South Korea has taken another step towards the legitimization of cryptocurrency with the announcement of a new regulatory initiative that will see blockchain platforms and businesses governed by a new classification system.

The new system officially recognizes cryptocurrency exchanges as legal entities, marking the first time the South Korean government has acknowledged exchanges as an industry.

First reported by South Korean crypto news platform The BChain, the new classification system will consider crypto exchanges as "Asset exchange and brokerage," while Blockchain platforms and networks such as Ethereum will be classified as "Blockchain-based software supply and development businesses."

For the first time, the gov't of South Korea will recognize crypto exchanges as regulated financial institutions.

Previously, crypto exchanges were considered as "Communication vendors." Now, they are categorized as crypto asset exchange and brokerage.

The new classification system developed as a joint initiative between the South Korean National Statistical Office, the Ministry of Science and Technology and the Ministry of Information and Communication, will consist of a series of main classification areas, with subdivisions within each classification allowing for significant nuance in the labeling of blockchain enterprises and platforms.

Some of the classification subdivisions have been released by South Korean state officials, however - such as categories that govern the development and distribution of blockchain-based mobile game software, or specific subcategories for blockchain-based cloud hosting services.

Submitted at the general meeting of the Special Committee on the Fourth Industrial Revolution on May 28, the proposal would allow South Korea-based ICOs to launch and operate under the proviso that they meet investor protection requirements.

Announced by the Ministry of Science and ICT of South Korea, the Blockchain Technology Development Strategy is focused on accelerating distributed ledger technology development, nurturing 10,000 professionals and 100 blockchain-focused companies.

While the South Korean government has traditionally retained an anti-cryptocurrency stance, the economic benefits demonstrated by other pro-blockchain countries appears to be incentivizing the government of the technologically forward leaning nation to establish a more nuanced position on the future of blockchain development.