South Korea’s Financial Supervisory Service (FSS) to Establish Comprehensive Guidelines for Cryptocurrencies
The Financial Supervisory Service (FSS) in South Korea is working on developing comprehensive guidelines for the issuance and distribution of cryptocurrencies. This move aims to enhance the Virtual Asset Users Protection Act, which was passed earlier this year. Under the new legislation, authorities are required to establish standards for virtual asset listing procedures, internal controls, and issuance and distribution volumes. The FSS plans to release these guidelines in January of the following year in collaboration with research services commissioned by the National Assembly. The objective is to create a clear regulatory framework and strengthen supervision and inspection within the virtual asset market.
New Crypto Act Lacks Regulatory Detail
The Virtual Asset User Protection Act primarily focuses on safeguarding customer deposits and cracking down on unfair trading practices. However, it falls short in addressing the complexities of the rapidly evolving cryptocurrency industry. To bridge this regulatory gap, the National Assembly has urged the Financial Services Commission and the FSS to devise additional rules and regulations, including legislation. These forthcoming regulations, set to be implemented when the law takes effect on July 19th of the following year, will address issues such as conflicts of interest, stablecoin discipline, and virtual asset valuation.
New Standards for Crypto Issuance to be Unveiled in January
In January, an outline for a new virtual asset regulatory system will be revealed. This system will encompass standards for issuance and distribution volumes and will be based on research findings obtained with input from industry experts and stakeholders. The Seoul National University Industry-Academic Cooperation Foundation will assist in gathering these opinions and leveraging international precedents to formulate effective regulatory solutions. The FSS aims to collaborate closely with the industry to develop guidelines for listing virtual assets and preventing unfair trading practices. By monitoring market developments, the agency seeks to ensure the stable and secure operation of the virtual asset market.
Hot Take: FSS Takes Steps Towards a Stronger Virtual Asset Market
The Financial Supervisory Service of South Korea is actively working towards establishing comprehensive guidelines for cryptocurrencies. By creating a clear regulatory framework and strengthening supervision within the virtual asset market, they aim to enhance customer protection and prevent unfair trading practices. The forthcoming regulations will address key issues in the industry and bridge the regulatory gaps left by the Virtual Asset User Protection Act. Through collaboration with industry experts and stakeholders, the FSS seeks to develop effective regulatory solutions based on international precedents. This proactive approach demonstrates their commitment to fostering responsible innovation and ensuring a sound virtual asset market in South Korea.
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