Korea’s FSC proposes regulatory approval requirement for crypto executives

South Korea’s Financial Services Commission (FSC) is weighing a new proposal that would require crypto executives to obtain regulatory approval before taking up a role.

In a document published on its official website on Feb. 5, the FSC says it is working on a set of new improvements that would require new executives of crypto businesses to obtain regulatory approvals before taking up a position.

While specific details of the proposed initiative remain pending revision by the Ministry of Government Legislation, it is understood that the amendments are anticipated to come into effect by the end of Q1, 2024.

This regulatory move extends beyond crypto though, reflecting the FSC’s broader aim to assert increased authority over the financial market. FSC Chair Lee Bok-hyun emphasized a commitment to cracking down on lax risk management practices, stating that authorities “will not tolerate practices of passing on risks to consumers and society by privatizing short-term profits without thorough risk management,” as reported by Reuters.

Meanwhile, the office of the South Korean President has urged the country’s financial regulator to reconsider the possibility of permitting spot Bitcoin (BTC) exchange-traded funds (ETFs) to trade within the country. Notably, the local FSC had previously cautioned South Korean firms against brokering transactions in foreign spot Bitcoin ETFs, citing potential violations of capital market rules.

Tae Yoon Seong, head of the political department of the presidential administration, noted that given the approval for spot Bitcoin ETFs in the U.S., Korean authorities are trying to make “appropriate changes in our country’s legal system or consider whether what happens abroad can be accepted in our country.”