South Korea’s Top Financial Regulator to Expedite Crypto Legislation

South Korea’s Financial Service Commissioner (FSC) chairman, Kim Joo-Hyun, has announced plans to accelerate the formation of cryptocurrency regulations.

Kim declared at the National Assembly that a task force comprising private sector experts and relevant ministries would speed up the review of virtual asset taxation. The Korean government believes that the crypto community generates a lot of profits for users hence the need for taxation.

South Korea to Create Bills on Digital Assets

South Korea Korean regulators have decided to join the bandwagon to accept cryptocurrency operations. The government noticed the impact on states such as the US and Europe. Moreover, these lawmakers have decided to expedite legislation. It is believed that these assets will have immediate functionality beginning in the first half of 2023.

According to local reports, Kim said the imminent virtual asset legislation would utilize an equilibrium approach. The strategy is to protect the investors and acquire market stability and enhance the development of blockchain technology. Recent reports from the Korean Financial Intelligence Unit (KOFIU) depict that 5.6 million Korean Citizens utilize the digital asset market. The market was valued at $42 billion.  

Additionally, the FSC chairman said that digital virtual assets are temporary and have anonymity features that could threaten security and decentralization. Therefore, the FSC will communicate to match crypto global regulation consistency. Yoon Suk- Yeol, South Korea’s president, has promised quick legislation dubbed the Digital Asset Basic Act. It is a comprehensive set of cryptocurrency regulations that will arise from 13 proposals debated in the National assembly. 

The newly elected FSC chairman (Kim Joo-Hyun) told the National Assembly that digital currencies would accelerate financial innovation and employment in the country. However, virtual assets pose highly valued risks as they are unstable(volatile), and investors must be protected. The FSC will actively engage in decentralized asset legislation so its market can develop based on investors’ trust. 

The legislation debate escalated after the collapse of Terra- Luna that affected 280,000individuals in the state. Luna is the native token of Terra, a blockchain innovated by the Korean Firm Terraform labs. The project had raised $32 million of funding via the Luna coins private sales. It had acquired investments from centralized sources such as Binance, Okex, and Huobi. 

Since Kim was appointed FSC chairman in July, he announced sweeping changes to the state’s financial regulations. These regulations are similar to the global digital transition that may permit South Korean banks to pursue crypto businesses. 

Progressive FSC Development on Virtual Asset Regulations 

A statement from the FSC manager stated that even though cryptos impose high risks to investors, they can be a form of passive income. Strict regulations might not fully advertise the investing organization hence the crypto airspace in Korea will never develop. Therefore, minimal regulations protecting native users from insecurities will do a great job. 

Currently, South Korea has described regulations on crypto assets known as The act on Reporting and Use of Certain Financial Transaction Information. The act will empower crypto trading platforms to acquire information security certificates and give real-name accounts to users. 

According to reports earlier in August, Crypto.com, a Singapore-based exchange, secured the Virtual Asset Service Provider(VASP) and Electronic Financial Transaction (ETFA). The two regulatory licenses enable the organization to operate as a trading venue and payment Service provider(PSP) in South Korea.