The monetary authority of South Korea has received approval to intensify its examination of cryptocurrency providers and creators as discussions on laws pertaining to virtual assets continue in the nation.
As per the report by The Korea Herald on April 20, the Bank of Korea (BoK) will be authorized to scrutinize companies involved in cryptocurrency-related operations. The digital asset sector’s regulation has been a point of contention between the Financial Services Commission (FSC) and the central bank of South Korea. Despite the central bank’s efforts, the FSC has the ultimate authority to govern crypto jurisdiction.
The Bank of Korea has raised apprehensions about the potential risks to financial stability posed by stablecoins. In light of this, the bank will be authorized to demand transaction data from cryptocurrency exchanges.
Last week, a representative from the Political Affairs Committee of the National Assembly confirmed the BoK’s authority to demand information from digital currency operators. The FSC will present its formal stance during a subcommittee session on April 25th.
As per the report, the conference will hasten the implementation of South Korea’s regulations pertaining to virtual assets. Kim Han-gyu, a member of the Democratic Party and the initiator of the Crypto Assets Act, which outlines the regulations on cryptocurrencies in the country, stated:
“The Financial Services Commission admits that it is necessary for the Bank of Korea to have the right to request data, but it is refusing to include it in the bill.”
Nevertheless, the FSC cautioned that if the central bank regulates cryptocurrency, it would convey the impression that virtual assets are equivalent to conventional/traditional finance. The FSC leader has formerly stated that he does not regard cryptocurrency as a financial instrument.
For the last three years, there has been a disagreement between the two organizations regarding crypto regulations. According to members of the Political Affairs Committee, a subdivision of the State Affairs Commission, the FSC has attempted to dominate its authority as a crypto regulator.
For the last three years, there has been a disagreement between the two organizations regarding crypto regulations. According to members of the Political Affairs Committee, a subdivision of the State Affairs Commission, the FSC has attempted to dominate its authority as a crypto regulator.
The FSC has been active recently with enforcement actions against crypto companies and takes the same position as the United States Securities and Exchange Commission in that it considers crypto assets securities. South Korea’s Financial Supervisory Service, which operates under the FSC, announced an investigative body called the Digital Assets Committee in mid-2022.
