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South Korea: Financial authorities to review digital asset legislation

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South Korean financial regulators have indicated an interest in revisiting current legislation on digital currencies. Adoption has recently flowed into the asset class, with South Korean investors following the trend. As a consequence, greater risks involving digital assets have come into the limelight. The South Korean financial authorities wish to further mitigate these risks.

Kim Joo-hyun, Chairman of the Korean Financial Services Commission (FSC), disclosed this on August 11. Speaking at the 3rd Democratic Party Meeting and Inauguration Ceremony of the Special Committee on Digital Assets, Kim highlighted the need for better consumer protection in the digital asset corridor.

“We will quickly review the virtual asset bill through a task force with private experts and relevant ministries,” Kim said. He addressed the urgency of the matter. This is expected, considering the Terra collapse that led to a loss of investor funds to the tune of billions in Won.

Kim mentioned plans to integrate institutional supplements into the FSC’s approach to regulating the sector. According to Kim, the FSC will maintain a balance that fosters innovation in blockchain development while protecting investors. Market stability will also be a top priority.

Currently, the Korean National Assembly is looking into 13 bills that make provisions for investor protection. The bills also look into measures that will ensure the stability of the digital asset sector.

Speaking further, Chairman Kim promised efforts to regulate the markets as an attempt to safeguard investor funds, even before a fully established legislation. To do this, Kim noted that the FSC would take self-regulatory measures in the industry. 

“We will continue to work through the consultative body,” he added.

South Korea is relentless in its fight against digital currency-related crimes

Speaking on the matter, the President of the Financial Supervisory Service, Lee Bok-hyun, highlighted the importance of self-regulation. Lee noted that the FSS would continue to support efforts at self-regulation as the space awaits proper regulation.

The FSS has left no stone unturned in its attempts to scrutinize the South Korean financial space. Last month, the financial regulator uncovered an alleged money laundering scheme involving digital currencies in the country. Following an investigation, the FSS discovered that two banks were involved in the scheme that laundered $3.1 billion

Earlier, reports revealing aggressive measures in the Terra collapse investigation surfaced. Apparently, South Korean prosecutors conducted a raid of seven local exchanges connected to Terra. This is in addition to eight other places, which included the homes and offices of personnel. 

The prosecutors also seized properties belonging to the exchanges, which would assist in the ongoing investigation. Following the Terra debacle, South Korean authorities have been on their toes with regard to investor protection. This recent promised review is another move towards safeguarding funds and stabilizing the digital currency space.

Watch: The BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets

https://www.youtube.com/watch?v=R58jiNcC5mA

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