South Korea Inches Closer to Wide-Ranging Crypto Regulations

In Brief

• South Korean officials are all set to discuss wide-ranging regulations for the crypto market.
• The discussion will move forward next month and will include the opinions of experts and the public.
• South Korea has accelerated its focus on regulation over the last year, as it seeks to prevent another UST incident.

The South Korean parliament is beginning a discussion about robust and wide-ranging crypto regulations. The focus is on investor protection and the issuance and disclosure of assets.

South Korea is taking more steps to regulate the crypto market, with local media outlets reporting that the country’s parliament has had a robust discussion on the Digital Asset Act. The focus of the discussion was investor protection, a point that the country’s lawmakers have been mulling over for a long time. Another major talking point was the issuance and disclosure of virtual assets.

The report notes that the market for cryptocurrencies in South Korea has exceeded 55 trillion won (~$42 billion) in the second half of 2021. Data estimate that around 15 million users are using crypto in total.

As such, authorities think putting investor protection and disclosure measures in place is necessary. The recent discussion is a major step towards that, and incidents such as the downfall of the UST stablecoin have only made this much more of a priority.

South Korea’s National Assembly Executive Committee has legislation related to cryptocurrencies pending. This includes a total of 18 bills, including 11 enactments on virtual assets, four amendments to the Electronic Financial Transactions Act, two amendments to certain financial information laws, and one amendment to the Financial Services Commission.

In April, officials will ask experts for their opinion and hold public hearings. The legislation will then be able to move forward after being held up in the early stages.

Crypto Regulation Expected This Year
It has long been known that South Korea strongly focuses on regulating the cryptocurrency market. The country houses numerous cryptocurrency investors. Authorities appear to be on the verge of implementing a comprehensive regulatory framework.

Recently, Lawmakers released guidelines for Security Token Offerings, which was a positive step forward for businesses. Meanwhile, the Financial Services Commission said that it would monitor crypto whales. Moreover, officials are also working on creating a Metaverse Industry Promotion Law.

South Korea Making Progress With Crypto Controls
South Korea’s regulatory spotlight has focused on both promoting certain aspects of the market and imposing controls on others. Web3 and the metaverse are major target areas. The country has invested $1.6 million in a metaverse fund.

To continue operations, crypto exchanges in the country have renewed their banking deals. Local media outlets report that illegal exchanges continue to be a problem, with traders using them for over $4.3 billion in trades.

Disclaimer
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.