South Korea Introduces New Amendments to Regulate Cryptocurrency Companies

South Korea's financial regulator has proposed new amendments that would mandate regulatory approval for new executives in the cryptocurrency industry.

South Korea’s financial regulators want to require approval for cryptocurrency executives.

📅 Last updated: February 5, 2024 | ⌛ 2 min read

Source: CJ Nattanai/Adobe

South Korea’s financial regulator has proposed new amendments that would require regulatory approval for executives joining cryptocurrency companies. In an official announcement, the Financial Services Commission (FSC) aims to address pain points in the current legislation governing the country’s crypto industry while enhancing the authority of the financial watchdog.

🕵️‍♀️ What are these proposed amendments and how will they affect South Korean crypto companies?

• Head of Financial Supervisory Service to Discuss Bitcoin Spot ETF with SEC Chairman
• Beware of Deepfakes: Scammers Targeting Andrew “Twiggy” Forrest
• India’s Controversial Crypto Tax Policy Stays Put

If these amendments are enacted, newly appointed executives in South Korean crypto companies will have to obtain approval from the FSC before assuming their roles. This move aims to strengthen regulation and ensure that individuals who hold influential positions in the crypto industry meet the necessary regulatory standards.

The proposed amendments also grant the FSC the power to suspend the review of a crypto company’s license registration if the company or its members are under investigation by local or international regulators. This additional regulatory oversight will help maintain the integrity of the industry and protect investors.

It’s important to note that currently, such a requirement is not outlined in the country’s law regarding the use and reporting of financial transaction information.

🚀 New Amendments to Come into Effect by March

According to a report by local news outlet Money Today, the amendments are expected to come into effect by the end of March. However, before they are implemented, the proposed amendments will undergo revision by the Ministry of Government Legislation and will be subject to a voting process by the FSC.

Just last week, Binance, one of the largest cryptocurrency exchanges, disclosed that it is exploring options to reduce its stake in the South Korean exchange Gopax. This move comes as a response to concerns raised by the FSC, which has delayed approving Gopax’s structural change since Binance acquired a majority stake. The FSC’s hesitation may stem from legal issues Binance is facing in the United States.

The FSC is currently seeking public feedback on these proposed amendments until March 4. This demonstrates the regulatory body’s commitment to transparency and inclusion in the decision-making process.

🔒 South Korea to Mandate Officials Disclose Crypto Holdings

In December of last year, South Korea announced that high-ranking public officials would be required to disclose their cryptocurrency holdings starting this year. This proactive approach aims to address potential conflicts of interest and promote integrity within the public sector.

By mandating the disclosure of cryptocurrency holdings, the government aims to ensure that public officials maintain the highest ethical standards and avoid any potential conflicts that may arise from their involvement in the crypto market. This requirement applies to high-ranking officials across various government agencies and departments.

🗣️ Future Outlook and Discussions with the SEC

Lee Bok-hyun, South Korea’s head of the Financial Supervisory Service, plans to visit the United States and discuss the crypto industry with U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler. One of the key topics of discussion will be spot Bitcoin exchange-traded funds (ETFs).

These discussions between regulatory authorities from different countries highlight the increasing global cooperation and efforts to shape the future of the crypto industry.

💡 Key Takeaways

• South Korea’s financial regulator is proposing new amendments to require regulatory approval for executives joining cryptocurrency companies.
• These amendments aim to enhance regulatory control and protect investors in the crypto industry.
• The amendments are expected to come into effect by March, pending revision and voting processes.
• High-ranking public officials in South Korea will be required to disclose their cryptocurrency holdings to promote transparency and prevent conflicts of interest.
• South Korean authorities are engaging in discussions with international regulators to shape the future of the crypto industry.

🔍 References: 1. Fake Bitcoin ETF Announcement Proves SEC Approval is a ‘Sell-the-News’ Event (Cyber Magazines) 2. UN Report Highlights Tether’s Rising Role in Money Laundering in Southeast Asia (Money Today) 3. Jupiter (JUP) Set to Shine with Mega Binance Listing (Cyber Magazines) 4. Binance to Reduce Stake in South Korean Digital Asset Exchange Gopax (Blocking.net) 5. Spot Bitcoin ETFs Reduce the Power of Whales and Increase Stability (Nansen Analyst)

Q&A Content

Q: What is the objective of the proposed amendments? The objective of the proposed amendments is to strengthen regulatory control over the crypto industry in South Korea. By requiring regulatory approval for new executives joining cryptocurrency companies, the Financial Services Commission aims to protect investors and enhance oversight in the market.

Q: How will the proposed amendments affect South Korean crypto companies? If the proposed amendments are enacted, newly appointed executives in South Korean crypto companies will have to obtain approval from the Financial Services Commission before assuming their roles. This will ensure that individuals in influential positions meet the necessary regulatory standards and contribute to maintaining the integrity of the industry.

Q: Why does South Korea require high-ranking officials to disclose their cryptocurrency holdings? Requiring high-ranking officials to disclose their cryptocurrency holdings aims to address potential conflicts of interest and promote integrity within the public sector. By mandating such disclosures, the government ensures that officials adhere to ethical standards and avoid any conflicts that may arise from their involvement in the crypto market.

Q: What impact will the discussions between South Korea and the SEC have on the crypto industry? Discussions between South Korea’s Financial Supervisory Service and the U.S. Securities and Exchange Commission (SEC) demonstrate the increasing global cooperation in shaping the future of the crypto industry. The focus on spot Bitcoin exchange-traded funds (ETFs) during these discussions highlights the evolving regulatory landscape and the potential for new investment opportunities.

Wrapping Up

South Korea’s proposed amendments to enhance the regulation of cryptocurrency companies showcase the country’s commitment to creating a secure and transparent ecosystem. By requiring approval for new executives and mandating disclosure of holdings by high-ranking officials, South Korea aims to ensure ethical standards, protect investors, and align with global regulatory efforts. The upcoming discussions between South Korea and the SEC further indicate the industry’s growing maturity and collaboration. Stay tuned for more updates!

---

🔍 References: 1. Fake Bitcoin ETF Announcement Proves SEC Approval is a ‘Sell-the-News’ Event (Cyber Magazines) 2. [UN Report Highlights Tether’s Rising Role in Money Laundering in Southeast Asia (Money Today)](https://blocking.net/un-report-highlight…

We will continue to update Blocking; if you have any questions or suggestions, please contact us!