South Korea’s financial regulatory authorities are currently developing a new set of regulations for the virtual asset market, including listing procedures, internal controls, and the issuance and circulation volume of virtual assets. The new rules will be announced in January of next year, following an in-depth research service commissioned by the National Assembly.
Virtual Asset User Protection Act
The Financial Supervisory Service (FSS) submitted a business report to the National Assembly Political Affairs Committee on 17 Oct. In the report, they stated their goal of establishing a ‘virtual asset market supervision and inspection system’.
FSS also mentioned their intention to support the establishment of standards for virtual asset listing process internal control issuance and circulation. These efforts aim to address dissenting opinions from the National Assembly regarding the implementation of the Virtual Asset User Protection Act.
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The Virtual Asset User Protection Act contains regulations on customer deposit custody rules and unfair trade practices for virtual asset service providers. While it focuses on creating urgent rules to protect users, it fails to fully include the basic rules needed by the virtual asset industry.
Therefore, upon request from the National Assembly, both the Financial Services Commission (FSC) and FSS will review and report on additional necessary virtual asset regulatory systems, including legislative opinions.
Review Items and Research Service
The deadline for the report is set before July 19 of the upcoming year, aligning with the enforcement date of the law. The review items include resolving conflicts of interest in the issuance and distribution process establishing a regulatory system for stablecoins and virtual asset evaluation.
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The establishment and operation of an integrated price and disclosure system, as well as the initiation of a burden of proof reversal rule similar to the ‘Electronic Financial Transactions Act‘ in case of an accident regulation of business activities of virtual asset service providers, etc.
The outline of the virtual asset regulatory system, consisting of standards on issuance and circulation, is slated to be unveiled by next January when research analyzing dissenting opinions from the National Assembly will conclude.
FSS’s Plans and Goals
The Financial Supervisory Service (FSS) stated in their business report its commitment to the steady implementation of the Virtual Asset User Protection Act and other related laws.
“The FSS actively supports responsible innovation in the financial industry. We will create a foundation for a healthy virtual asset market,” said Lee Bok-hyun, head of FSS.
They also expressed their intention to collaborate with industry partners in establishing guidelines for virtual asset listing and investigating unfair trading practices.
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