In an effort to enhance the Virtual Asset Users Protection Act, South Korea’s Financial Supervisory Service (FSS) is working towards establishing comprehensive guidelines for the issuance and distribution of cryptocurrencies. These guidelines, set to be released in January of the following year, will create a clear regulatory framework and strengthen supervision and inspection within the virtual asset market.
Addressing Regulatory Gaps
The Virtual Asset User Protection Act, passed earlier this year, focuses on safeguarding customer deposits and cracking down on unfair trading practices. However, it lacks the comprehensive regulatory measures required to deal with the complexities of the rapidly evolving cryptocurrency industry. To bridge these gaps, the National Assembly has called on the Financial Services Commission and the Financial Supervisory Service to develop additional rules and regulations.
Scheduled for implementation when the law takes effect on July 19th of the following year, the forthcoming regulations will tackle key issues such as conflicts of interest in the virtual asset issuance and distribution process, the establishment of a stablecoin discipline system, and the regulation of virtual asset valuation, advisory, and public disclosure businesses.
Collaborative Approach and Industry Expertise
The Financial Supervisory Service is collaborating with research services commissioned by the National Assembly to formulate these regulations. By leveraging international precedents and gathering opinions from industry experts and stakeholders, effective solutions can be developed to address the challenges faced by the virtual asset market.
The agency is also working closely with the industry itself to create guidelines for listing virtual assets and preventing unfair trading practices. Through close monitoring of financial market developments, the Financial Supervisory Service aims to ensure the stable and secure operation of the virtual asset market.
“The new regulations aim to create a clear regulatory framework and bolster supervision and inspection in the virtual asset market.”
Lee Bok-hyeon, the Head of the Financial Supervisory Service, expressed the regulator’s commitment to fostering responsible innovation within the financial industry. He emphasized the importance of creating guidelines that promote the stable and secure operation of the virtual asset market.
