More on Virtual Currencies

Here is another article on the law to make virtual currencies illegal in Korea.

Click the link below:

http://virtual-economy.org/blog/finally_korean_governement_are

The language of the prohibition appears broad as it appears in the original Korean newspaper article: 게임머니 거래를 `중개'하는 행위가 불법으로 규정된다 (the act of "mediating" trading in game money is provided as illegal).

Is Harvard University "mediating" in online game money if it accepts Linden dollars from Korean students at its Second Life campus? Also, where does the "mediating" have to take place? There are other jurisdictional questions - one could recall the already existing problems of people (possibly including Korean citizens) opening a virtual casino HQed in the Cayman Islands, which might for instance be called "Pada Iyagi". Is the proposed law worth the "chilling effect" on the Korean online gaming industry for the nine months until amendments are expected to be passed?

It appears to be a "shoot first, ask questions" later approach. First, the broad language of the prohibition could result in the online gaming community being made potential criminals; only later, as potential criminals, would you be able to give your community views. Very Machiavellian.

To be fair though the Pada Iyagi online gambling scandal seems to have been a major motivation behind the move - yet questions of proportionality have to be asked as the language of the prohibited conduct appears to be not limited to gambling on MMORPG sites.

The Ministry of Culture and Tourism states that it is investigating basic regulatory proposals in relation to "Item Currency Trading" to be excepted from this proposed law. It plans to hold a public inquiry to gather community views, and then aim to pass yet another amendment to the Game Industry Promotion Act by September 2007 and will submit its proposal for this amendment in early 2007.

This will amount to people explaining to the Ministry why their particular business activities should not be illegal. Be prepared for some interesting criteria to emerge which may leave everyone in the dark except for those who are best at lobbying the Ministry.

There are claims made on the blog that Linden dollars, etc., would be not subject to regulation but I am not convinced that it would not be illegal (now or with subsequent amendments) to withdraw Linden dollars in Korea because the legal criteria are not clear.

E.g., Would there be an exemption for spreading Korean culture?