In a bid to bolster investor protection and bring clarity to the cryptocurrency market, South Korea’s Financial Supervisory Service (FSS) is taking proactive steps to enhance the existing Virtual Asset Users Protection Act. Local reports reveal that the FSS is diligently preparing a set of comprehensive regulations to complement the Act, with the goal of ensuring a more secure environment for cryptocurrency users. These regulations are expected to be finalized by January, well in advance of the law’s enforcement.
The FSS’s determination to safeguard the interests of South Korean investors was reaffirmed during a recent audit conducted by the National Assembly Political Affairs Committee. The FSS head, Lee Bok-hyeon, responded to concerns that some South Koreans were losing money on “burger coins,” a colloquial term for foreign-issued cryptocurrencies traded in the country.
To achieve this, the FSS will establish rigorous standards governing listing procedures, internal controls, and the issuance and distribution of virtual assets. Furthermore, a robust “virtual asset market supervision and inspection system” will be put in place to monitor the crypto market closely.
Collaboration is also on the agenda, as Lee revealed that discussions are underway with the Digital Asset eXchange Association (DAXA), representing major local crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax.
Lee acknowledged the need for enhanced regulatory authority, as he found the legislation passed in June somewhat lacking in this regard. The new regulations aim to combat activities like manipulation of distribution volume through staking or unfair disclosure.
South Korean law enforcement is equally committed to the cause, with plans to establish a dedicated Joint Investigation Centre for Crypto Crimes, staffed by 30 experts drawn from various government agencies. This initiative underscores South Korea’s commitment to ensuring a safe and transparent cryptocurrency ecosystem.