Emily Walker
The cryptocurrency regulatory landscape in South Korea is undergoing changes, as authorities take a careful stance towards corporate investments in digital currencies.
On January 15, the Financial Services Commission (FSC) held its second meeting of the Virtual Asset Committee to discuss advancements in laws aimed at protecting crypto investors.
Despite discussions on multiple regulatory aspects, the long-awaited decision on permitting corporate accounts for cryptocurrency trading has been put off for additional evaluation.
Postponement of Corporate Crypto Trading Accounts
In the meeting, the FSC reiterated its commitment to refining the rules concerning corporate cryptocurrency trading accounts. There isn’t an official prohibition against such accounts in South Korea, but banks are reportedly hesitant to offer them due to “regulatory uncertainties.”
This decision delay on corporate trading accounts comes as the FSC works towards finalizing its policy guidelines, which have faced thorough examination recently.
The matter has been a primary topic in discussions among various subcommittees and task forces, as noted by FSC Vice Chairman Kim So-young. Reports indicate that the review process is nearing completion, with Kim promising a swift update: “We will report on our findings shortly and move forward with the next steps.”
While there’s anticipation for clearer guidance on corporate investments, regulators have chosen to prioritize other comprehensive policy matters, primarily focused on investor safety and regulatory oversight.
Recent Regulatory Updates and Future Directions
Additionally, discussions during the meeting addressed the second phase of South Korea’s investor protection law for cryptocurrencies, which is set to take effect in July 2024.
The initial phase was aimed at protecting user deposits and preventing unfair trading, whereas the upcoming phase targets existing regulatory gaps concerning crypto asset issuance, distribution, and necessary disclosures.
Regulators stressed the necessity of a holistic strategy that balances the interests of businesses, markets, and users. The committee also intends to investigate the establishment of a distinct regulatory framework for stablecoin transactions and related businesses.
This initiative underscores the increasing significance of stablecoins within the global financial landscape and highlights the need to manage their associated risks in South Korea’s regulatory setup. The postponement regarding corporate crypto accounts has left many eager for a definitive plan.
Given Kim’s assurance that the review will conclude soon, a gradual introduction of corporate trading accounts may be on the horizon, with real-name account issuance being a critical aspect of this plan.
This shift could lead to greater institutional involvement in South Korea’s digital currency sector, which continues to grow despite regulatory challenges.
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