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.
Authorities are required by this new legislation to develop guidelines for internal controls, issuance and distribution volumes, and procedures for virtual asset listings.
The upcoming standards are expected to be published in January of the subsequent year and are being developed in conjunction with research services that the National Assembly has commissioned.
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 primary goals of the Virtual Asset User Protection Act are to enforce fair trading practices and protect consumer deposits held by virtual asset operators.
It does not, however, have the comprehensive regulatory framework required to handle the complexities of the quickly developing cryptocurrency market.
The Financial Services Commission and the Financial Supervisory Service have been urged by the National Assembly to create new laws and regulations in order to close these regulatory gaps.
These upcoming regulations will address important issues like conflicts of interest in the issuance and distribution process of virtual assets, the creation of a discipline system for stablecoins, and the regulation of businesses that provide virtual asset valuation, advice, and public disclosure. The regulations are scheduled to be implemented on July 19th of the following year.
New Standards for Crypto Issuance to be Unveiled in January
When the research service’s findings are released to the public in January, it is expected that the framework for this new virtual asset regulatory system—which includes guidelines for distribution volumes and issuance—will be revealed.
In order to develop practical regulatory solutions, these findings—obtained with the support of the Seoul National University Industry-Academic Cooperation Foundation—will be used to draw on global precedents and consult with stakeholders and industry experts.
In an effort to speed up the Virtual Asset User Protection Act’s implementation, the Financial Supervisory Service will collaborate closely with the sector to develop standards for listing virtual assets and stopping dishonest trading practices.
The agency works to guarantee the steady and safe operation of the virtual asset market by closely observing the developments in the financial market.
The Financial Supervisory Service’s Head, Lee Bok-hyeon, emphasized the regulator’s dedication to supporting ethical innovation in the financial sector. 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.”