South Korea's FSS Drafting Crypto Regulations; Joint Crypto Crime Investigation Unit on Horizon
Summary:
The Financial Supervisory Service (FSS) of South Korea is formulating additional regulations to support the Virtual Asset Users Protection Act, with the guidelines expected by January. The rules will establish standards for listing, auditing, issuance and distribution of virtual assets, and incorporate a supervisory system for the virtual asset market. These regulations are being discussed with the Digital Asset eXchange Association. Additionally, a Joint Investigation Centre for Crypto Crimes, staffed with personnel from various government bodies, is being established for virtual asset crime investigation.
The Financial Supervisory Service (FSS) of South Korea is in the process of creating regulations to support the Virtual Asset Users Protection Act that was approved earlier this year, as per local media reports. The new set of rules are anticipated to be unveiled by January, ahead of the law's enforcement, announced the chief of FSS. The South Korean National Assembly Political Affairs Committee held an audit session for the FSS on October 17th, wherein, Lee Bok-hyeon, the chief of FSS, addressed the concerns related to losses experienced by South Koreans from the trade of foreign cryptocurrencies, commonly known as ‘burger coins’. Lee Bok-hyun, the governor of FSS, recently visited China without prior announcement, which marked the first official trip to China by an FSS chief in over half a decade.
Under the new regulations, the FSS aims to create standard protocols for listing processes, internal auditing, as well as issuance and distribution of virtual assets, along with building a system for the supervision and examination of the virtual asset market, as reported by South Korean media covering the audit. Lee revealed that these upcoming rules are being consulted upon with the Digital Asset eXchange Association (DAXA), a body comprising of domestic cryptocurrency exchanges such as Upbit, Bithumb, Coinone, Korbit, and Gopax. He stated that the law enacted in June was not explicit and specific enough in terms of regulatory details. Although the law has set criminal liability for contravening acts, the FSS, according to Lee, does not have enough powers. "In case of an act that constitutes distribution volume manipulation through staking or any unfair disclosure, we will be having discussions with DAXA" Lee added. He further elaborated, “While the securities sector has systems related to various screenings concerned with the issuance market, DAXA or the individual exchanges do not possess such mechanisms.”Plans for the formation of a combined virtual asset crime investigative committee referred to as the Joint Investigation Centre for Crypto Crimes have been announced by South Korean law enforcement. The team consisting of around 30 personnel will be derived from various government bodies, such as the FSS, National Tax Service, Korea Customs Service among others.
Published At
10/17/2023 8:30:55 PM
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