FSS Launches Thorough Investigation

On Friday, the Financial Supervisory Service (FSS) of South Korea kicked off an extensive investigation into payment gateways that are intricately linked with digital assets. This regulatory authority, operating under the Financial Services Commission (FSC), is fundamentally focused on maintaining stability in the increasingly complex world of digital finance.

Demand for Transparency

In a bold move, the FSS has requested reports from 157 payment gateways regarding their involvement with cryptocurrencies. The inquiry seeks information about current services, future plans, and necessary disclosures related to digital assets. However, a startling revelation from the FSS report indicates that only six of these entities actually hold any digital assets. Talk about a serious case of crypto FOMO!

Post-Terra Regulation Initiatives

This investigation comes in the wake of South Korea’s announcement, on May 31, 2022, of a forthcoming Digital Assets Committee. This initiative aims to create a structured environment for the virtual asset industry, particularly after the unfortunate fallout from the Terra crash. The committee is expected to implement:

• Screening criteria for newly-listed digital assets
• Regular market monitoring
• Trade surveillance
• Requirements for transparency and disclosure
• Enhanced investor protections

Even the big players in the industry are getting in line, as South Korea’s five major exchanges have agreed on these standards and formed a committee to prevent another catastrophic event.

International Collaboration on Crypto Regulation

As the FSS delves further into its investigation, they’ve also organized a remote meeting with financial supervisory bodies from five countries in the Asia-Pacific region. Hosted by Indonesia, this gathering included representatives from Australia, China, and Japan. The focus? Discussing global market conditions along with the imperatives of regulating crypto and instituting robust financial frameworks.

Upcoming Steps for Regulation

The future of cryptocurrency regulation in South Korea is poised for significant shifts, as the newly formed Digital Assets Committee is set to guide policy recommendations and implement investor protections. This is especially crucial as the country prepares for the enactment of the Digital Asset Basic Act (DABA), which promises to pave the way for a more orderly digital finance landscape.

Do Kwon’s Implications

In an intriguing twist, the FSS’s rigorous examination comes shortly after South Korean officials launched an investigation against Do Kwon, the key figure behind the recent Terra debacle. Leading the charge is Yoon Chang-Hyeon, the chairman of the People’s Strength Virtual Assets Special Committee, who has been in talks with major exchanges. One has to wonder if he’s wondering where it all went wrong!