South Korea’s Financial Services Commission Calls for a Quick Crypto Review
- South Korea has one of the most crypto-active markets in Asia.
- Terra’s crash alarmed authorities about the volatile nature of crypto assets.
South Korea’s Financial Services Commission has called for a quick review of crypto legislation in the country. The chair of the commission revealed that the institution intends to speed up its evaluation of 13 digital asset-related laws that are now being debated in the National Assembly of the nation.
Local reports noted that the Financial Services Commission chair, Kim Joo-Hyun, said that a task team made up of government departments and commercial specialists will soon evaluate draft legislation on cryptocurrency.
Kim further stated that the financial watchdog would make institutional adjustments that would adopt a comprehensive approach to blockchain development, investor protection, and market stability.
Even before legislation, we will introduce self-regulation efforts for the industry and do our best to protect investors. Efforts are being made internationally to stabilize the education system and reduce the risk of consumer protection without impeding technological development.
The chief of the financial watchdog made the remarks in response to reports that South Korea intends to build a comprehensive framework for cryptocurrencies by 2024 called the “Digital Asset Basic Act.”
In the wake of the Terra (LUNA) crash, which has since been renamed Terra Classic (LUNC), numerous reports stated that the South Korean government had stepped up its investigations and enforcement efforts, including a plan to establish the Digital Assets Committee with the goal of providing investor protection and listing standards.
South Korea’s newly elected President, Yoon Suk-yeol, has previously announced plans to set up crypto-friendly policies, including better tax rates. President Yoon’s pro-crypto stance was one of the factors that endeared him to the young voters, who are increasingly participating in crypto activities.
South Korea is one of Asia’s most crypto-active nations. According to research by the country’s top financial regulator, the crypto market in the country increased to 55.2 trillion won ($45.9 billion) by the end of 2021 and had over 5.58 million users, or about 10% of the population of the nation.
The growth of the crypto market in South Korea can be attributed in part to regulatory policies that stifle international competition. Five significant local exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—control the market in South Korea. But foreign and smaller players find it more difficult to comply with the government’s demand to work with regional commercial banks.
Following Terra’s crash, South Korea’s regulators became alarmed by the volatile nature of crypto assets and have sought to prevent similar crashes in the future. Many Korean marketplaces have since warned the public against investing in Luna, which has lost the bulk of its value.