Double exposure of Luna coin with declining price

South Korea to launch a Digital Assets Committee in continued reaction to Terra’s collapse

South Korea’s resolve to introduce sweeping regulations for digital currencies continues to solidify. The government has confirmed that it is launching a Digital Assets Committee that will oversee all policy formulation and supervision for digital assets. 

According to a report from local news outlet Newspim, the Digital Assets Committee is an initiative of the ruling People’s Power Party. The party intends to reorganize and broaden the Special Committee on Virtual Assets (SCVC) that it created in May as an emergency response to Terra’s UST and LUNA tokens’ crash. 

The committee will function as a unifying body for all digital currency regulations-related matters until the Digital Assets Basic Act (DABA) is enacted in 2023. This means it will have powers over departments from the Ministry of Strategy and Finance, the FSC, the Ministry of Science and ICT, and the Personal Information Protection Committee that make digital assets regulations. 

It will also have oversight over the listing and screening criteria of digital currency exchanges, as well as the disclosure system and investor protection measures of the digital currency industry in the country. 

One government official told the news outlet that the inauguration of the committee will follow the confirmation of a new chairman for the Financial Services Commission (FSC). Newly-elected Yoon Suk-yeol has not announced a candidate for the position but is expected to do so later this month. 

DABA bill still on a steady course for enforcement in 2024 

Before the announcement of the committee, the government has been emphasizing the need to move rapidly with digital currency regulations. Proposals have emerged to fast-track the enactment of the DABA bill, citing the growth of digital currency investment. 

“As of the end of last year, the daily transaction amount of virtual assets was 11.3 trillion won, which is similar to the average daily transaction of the KOSDAQ… A ministry should be established to protect digital asset investors at the level of stock investor protection,” Hwang Seok-jin, a member of the SCVC said. 

However, the government of newly-elected South Korean President Yoon Suk-yeol has not announced a deviation from its roadmap to begin enforcing the DABA bill from 2024. Suk-yeol has also stated that the government will only consider taxing digital assets after the bill is in place. 

Meanwhile, Terra, the source of the intensified concerns, continues to battle with the law and the court of public opinion. The Financial Times reports that the events surrounding the collapse of the ecosystem have made TFL’s CEO, Do Kwon, the “most hated man in South Korea.”

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