The Korean Bar Association is urging the South Korean government to create bitcoin and cryptocurrency legislation, a rare public lobbying move by the legal group.

The bar association, in which all local lawyers must be members, issued a press release that asked for financial technology regulations and government clarity on cyrptocurrency. 

Specifically, the bar called for regulations to protect users from hacking, insider trading and money laundering, and suggested subjecting initial coin offering tokens to existing securities laws such as the Capital Market and Financial Investment Business Act. The organization also asked the government to allow cryptocurrency transactions in banks and more investing in cryptocurrencies. 

The bar's push for more regulation, which included a press conference Nov. 8, according to media reports, comes as the South Korean government is scheduled to announce its stance on ICOs later this month. The country previously banned ICOs in September 2017. The bar said the government should be acting fast.

“If such a situation persists, it is very worrisome that Korea will fall behind the times due to limitations of the legal system, even though it has favorable conditions for developing the blockchain industry in other fields such as technology, market and culture,” the bar wrote in its press release.

Such sparsely regulated “favorable conditions” have lead to some investment fraud, said a Washington, D.C.-based attorney.

“South Korea's market is so hot, a lot of fraud and Ponzi schemes are happening at a crazy level,” said Kobre & Kim of counsel Nathan Park. “The government has been looking into protecting systems for regular investors and not necessarily big companies.”

South Korea's won is the third-most traded national currency for bitcoins, behind Japan's yen and the U.S. dollar, according to bitcoin-tracking website Coinhills. Park said fintech is popular in South Korea without government regulations because of the fast speed of innovation in the country, although government oversight and clear laws are needed to protect investors and regulate companies.

Currently, there aren't many laws regulating blockchain or crypotcurrencies in South Korea except for a ban on ICOs and a requirement to have anti-money laundering guidelines on virtual currencies in place, Park explained.

Park said Korean fintech exchanges are therefore struggling to operate, while larger, multinational exchanges are operating but not smoothly.

South Korea's flurry of activity and the popularity of fintech are, Park explained, “subject to a very uncertain regulation regime.”