Setting the Stage for Regulation
In a bid to safeguard its citizens’ wallets, South Korea’s Financial Supervisory Service (FSS) is drafting new regulations to bolster the recently passed Virtual Asset Users Protection Act. Talk about a timely intervention! With the regulations expected by January—just in time for the law to kick off—FSS head Lee Bok-hyeon is carving out a safety net for virtual asset users.
The Literal Crypto Audit
During an audit by the National Assembly Political Affairs Committee on October 17, Lee faced the music regarding the distressing plight of South Koreans caught in the web of “burger coins.” This colorful term refers to foreign-issued cryptocurrencies that are giving local investors a serious case of indigestion. Lee assured politicians that robust frameworks are coming to prevent these financial faux pas.
Taking Notes from Our Neighbors
In a surprising move that was likely fueled by a mix of curiosity and perhaps a dash of envy, Lee embarked on an unannounced two-day trip to China. Why? That’s right! It was the first such visit by an FSS head in six years. China’s crypto landscape might hold some lessons, or at least theories, about how to navigate these turbulent waters.
Establishing Standards Galore
What’s on the FSS’s regulatory wish list, you ask? The agency plans to introduce guidelines around listing procedures, internal controls, and the issuance and distribution of virtual assets. Fancy terms, we know! But critically, the upcoming regulations aim to create a structure for a virtual asset market supervision and inspection system. This is the stuff that could keep rogue coin promoters up at night!
More Than Just Legislation
After the legislation passed in June, Lee acknowledged it left much to be desired in terms of specifics. It established criminal liability for violations—great! But without the necessary enforcement power, it’s like having a car with no engine. In discussions with the Digital Asset eXchange Association (DAXA), which represents local trading giants like Upbit, Bithumb, and Coinone, Lee expressed a need for a more backbone-like regulation to prevent things like distribution manipulation or information shenanigans.
Joint Forces Against Crypto Crime
In a move indicating that the FSS means business, South Korean law enforcement has announced the formation of a Joint Investigation Centre for Crypto Crimes. With a team of 30 investigators pulled from various governmental agencies, they’ll work together to tackle virtual asset-related shenanigans. Consider it the dream team for catching the not-so-innocent crypto crooks.
