South Korea's ambition to regulate the digital asset ecosystem is gaining ground as it looks to draft new legislation for supervising security tokens, which it hopes to be finalized before yearend.
South Korea sees a nearly 10% rise in illegal forex transactions tied with digital assets this 2022, forcing authorities to widen the crackdown on the market that led to the arrest of 16 individuals.
The FSC said that the unregistered exchanges were brought to its notice by its sub-unit responsible for overseeing the registration of digital assets exchanges—the Korea Financial Intelligence Unit.
Financial Services Commission Chair Kim Joo-hyun said the commission will maintain a balance that fosters innovation in blockchain development while protecting investors.
The country's parliament plans to introduce laws that will increase the supervision of digital currency exchanges, as discussed during a two-day National Assembly emergency seminar held this week.
The FSC report highlights new regulations that introduce stricter licensing requirements for digital currency exchanges and token issuers based on the risks involved.
The unit is a joint financial and securities crime investigation team from the Financial Services Commission and the Financial Supervisory Service and was disbanded in 2020.
The country’s regulators have said they will use the Terra debacle to raise awareness among digital asset investors following the LUNA meltdown.
Newly-elected president Yoon Suk-yeol announced that his government would push back the tax scheduled for 2023 in favor of consumer protections.
The FSC’s first-ever comprehensive survey also showed that the daily transaction volume hit $9 billion as the number of traders surged to 15 million in 2021.
The vice chair of the Financial Services Commission has asked the National Assembly in South Korea to reverse the ICO ban and instead regulate the industry to weed out scammers.
The rule would require all businesses to verify and report the identity of any user that sends them digital currencies, which experts say will stifle growth.
