Bank of Korea argues it has the right to access data of VASPs due to the risks tied to offering digital asset services, a move opposed by the Financial Services Commission, as digital assets aren't widely used as payments.
The bill moved past the first legislative hurdle on April 25 after members of the National Assembly voted in its favor, and the Financial Services Commission will be acting as the chief regulator for the sector.
To promote transparency and protect users in the digital asset space, South Korea is giving its central bank the power to access the full transaction data of digital asset service operators.
The proposed amendments to the Telecom Fraud Damage Refund Act will include heightened monitoring of the asset class and the ability to seize and freeze funds tied to scams.
The new rules are designed to "prevent potential violations of the law" and protect investors' interests, according to the Financial Services Commission.
Paycoin, whose token is used in South Korea for payments, was ordered to secure a bank partner or have its services suspended by February 5—it chose the former.
Both the Financial Services Commission (FSC) and the Financial Intelligence Unit (FIU) are pushing for the listing of new tokens to be removed from the purview of digital asset exchanges.
The Financial Services Commission supports a new bill that will require exchanges to compensate users if they halt withdrawals as they’ve been doing amid the FTX collapse.
The Financial Services Commission is hinging its argument on the grounds that digital assets is an umbrella term covering virtual currencies and CBDC and should not be used interchangeably.
South Korea’s Financial Services Commission is investigating exchanges that have listed their native tokens, with Flata exchange as the main target, following FTX’s FTT collapse this month.
If the law scale through the legislative processes, it could bring the penalties for digital asset fraud to be at par with traditional finance fraud in the country.
South Korea is going hard on its efforts to monitor the digital asset industry as money laundering cases become rampant, with the Financial Services Commission saying it will be on the lookout for 'crypto' whales.
