South Korean Government to Form Digital Assets Committee in Response to Terra Collapse
The South Korean Government is set to inaugurate a virtual asset control committee as early as June in response to the collapse of the Terra Network (LUNA) and its stablecoin, UST, as reported by Newspim, a South Korean news outlet.
More than 280,000 South Korean citizens were hurt in the attack as there is no policy to regulate the cryptocurrency market in South Korea to protect its citizens from mishaps similar to LUNA’s. Therefore, the crypto agenda was included in the two-day House of Assembly emergency meeting to discuss the disaster and prepare measures that will address similar occurrences.
“We need to make exchanges play their proper role, and toward that end, it is crucial for watchdogs to supervise them thoroughly,” “When exchanges violate rules, they should be held legally responsible to ensure that the market functions well without any troubles.”
Rep. Sung Il-jong of the ruling People Power Party said to the Korean Times.
The Digital Assets Committee
This Committee has been set up to serve as the control tower of virtual assets in the country. It could be launched any moment this month as stated by the report. This indicates the urgent need to put in place and enforce regulatory laws.
Before the collapse of LUNA, there had been speculations about a government-only organization that would act as a control body, but it was not until recently that the creation of the ‘Digital Assets Committee’ was officially confirmed. The Committee’s job has been revealed to be policy preparation and supervision of the virtual asset industry until the enactment of the Digital Assets Framework Act and the establishment of an exclusive agency within the government.
News from the political and financial circles suggests that the ruling People Power Party will expand and reorganize the current virtual asset special committee within the party into the digital asset committee. An official from the ruling party said, “the launch of the Digital Assets Committee will be immediately after the inauguration of the new Financial Services Commission Chairman.
The Committee’s responsibilities would be to prepare guidelines for listing screening criteria by exchanges, monitor the market for unfair trading, monitor the designation of certain stocks, insider trading or disclosure system, oversee investor protection measures, etc.
After the LUNA incident, problems such as the scramble for coin listing, delisting standards for virtual asset exchanges, and an outdated market monitoring system have surfaced.
The present State Of Crypto in South Korean
Currently, the five major domestic exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax, have formed a joint consultative body in order to reduce the chances of a second Luna incident and agree on standards for listing and unification of the timing of designation of significant stocks. Opinions have not been shared but are expected to be taken into account.
However, based on the fact that if the listing standards are specifically merged, the identity of individual exchanges will disappear, and the monopoly circumstances of a specific exchange will increase, it is highly likely that the related guidelines will be prepared negatively.
After the launch of the Digital Assets Committee, the schedule for allowing virtual asset disclosures (ICOs) and enacting the Digital Assets Framework Act is also planned to be implemented earlier than anticipated.
However, considering that it will take at least a year or more for the law to be fully enforced, the party is also considering a plan to revise the enforcement ordinance of the Specific Financial Transaction Information Act (Special Provisions Act). This is because it is determined that measures to protect investors in virtual assets are urgently needed.
“it seems that the director of the Financial Intelligence Unit (FIU) will change with the inauguration of the new chairman. Currently, the Enforcement Decree of the Special Act contains only limited regulations in the case of virtual asset business obligations and business status and money laundering.”
An official from the ruling party.
Barry Pene is a stern blockchain research/copywriter. Barry has been trading cryptos since 2017 and has been invested in issues that would put the blockchain industry on the right pedestal. Barry's research expertise cuts across blockchain as a disruptive technology, DeFis, NFTs, Web3, and reduction of energy consumption levels of cryptocurrency mining.
