South Korea, on its part, has begun the second stage of crypto regulation, pushing in line with the law on the use of cryptocurrency. The Financial Services Commission (FSC) promised on September 20 that they would step up regulation levels.
Appropriate steps would be taken to expand the virtual assets market and enhance investor protection. It demonstrates both the enthusiasm of Korean authorities to nurture new sectors and the appropriate solutions to the risks posed by digitalizing assets.
South Korea Enhances Crypto Market Transparency
The FSC plans to fill the holes in the legislation by creating real-name accounts for the corporations and bodies participating in the virtual assets arena. This basis will be more transparent and them-oriented.
Legal certainty will be offered to those corporations that have been limited due to the absence of revolving laws. With the crypto market maturing in South Korea, more shifts are being made towards corporate rather than individual investors to meet international needs.
The ethnic accounts catering to such changes are not enough; the FSC will also review the Capital Market Act. This will allow unemployment policy immigrants to hear about capital movements for digital assets like security tokens and central bank digital currency. This way, Korea is also seeking to address how to allow traditional and virtual mounted financial markets to compete fairly.
FSS to Scrutinize Crypto Exchanges for Risks
The second phase of legislation will also focus on the operation and qualification requirements for virtual asset service providers. These providers will face stricter anti-money laundering (AML) and know-your-customer (KYC) standards.
These steps are crucial for preventing illicit financial activities. They can ensure the virtual asset industry operates with integrity and security. In line with this, South Korean authorities plan to investigate crypto exchanges involved in irregular activities.
The Financial Supervisory Service (FSS) will focus on two Korean won-based exchanges and several other digital asset platforms to curb potential risks. The recent Virtual Asset User Protection Act enactment underscores the government’s resolve to tackle fraudulent activities.
South Korea Targets Safer Crypto Investment Climate
The FSC emphasized the importance of collaborating with international regulatory bodies to maintain global compatibility in its regulatory approach. This cooperation aims to reduce the risk of regulatory arbitrage. Further, it ensures that digital asset activities in South Korea align with evolving global standards.
By working with global regulators, the FSC seeks to create a safer environment for investors while promoting innovation in the crypto space. Investor protection remains a key priority, with the FSC taking measures to prevent fraud and market manipulation.
Over the past year, South Korea’s Joint Virtual Asset Investigation Team seized $107 million in assets linked to crypto-related fraud. The team has effectively prosecuted high-profile cases involving luxury assets, demonstrating the government’s serious approach to regulation and enforcement.
