South Korea’s Financial Supervisory Service (FSS) is looking to establish comprehensive guidelines for the issuance and distribution of cryptocurrencies to enhance the Virtual Asset Users Protection Act passed earlier this year.
Under this new legislation, authorities are mandated to formulate standards concerning virtual asset listing procedures, internal controls, and issuance and distribution volumes.
The forthcoming standards, scheduled for release in January of the following year, will be developed in collaboration with research services commissioned by the National Assembly.
The objectives are to create a clear regulatory framework and to bolster supervision and inspection within the virtual asset market, local media outlets reported.
New Crypto Act Lacks Regulatory Detail
The Virtual Asset User Protection Act focuses on safeguarding customer deposits held by virtual asset operators and cracking down on unfair trading practices.
However, it lacks the comprehensive regulatory measures needed to address the complexities of the rapidly evolving cryptocurrency industry.
To bridge these regulatory gaps, the National Assembly has called on the Financial Services Commission and the Financial Supervisory Service to devise additional rules and regulations, including legislation.
These forthcoming regulations, slated for implementation when the law takes effect on July 19th of the following year, 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.
New Standards for Crypto Issuance to be Unveiled in January
The outline for this new virtual asset regulatory system, which encompasses standards for issuance and distribution volumes, is anticipated to be unveiled in January when the research service’s findings are made public.
These findings, obtained with the aid of the Seoul National University Industry-Academic Cooperation Foundation, will leverage international precedents and gather opinions from industry experts and stakeholders to formulate effective regulatory solutions.
The Financial Supervisory Service, in a bid to facilitate the implementation of the Virtual Asset User Protection Act, is set to work closely with the industry to create guidelines for listing virtual assets and preventing unfair trading practices.
By closely monitoring the financial market’s developments, the agency aims to ensure the stable and secure operation of the virtual asset market.
Lee Bok-hyeon, Head of the Financial Supervisory Service, highlighted the regulator’s commitment to fostering responsible innovation within the financial industry. He stated,
“The Financial Supervisory Service is actively supporting responsible innovation in the financial industry. We will create the foundation for a sound virtual asset market.”
