Bank of Korea has been given the go-ahead to increase its scrutiny of cryptocurrency service operators and issuers. This also grants them access to crypto transaction data from exchanges operating in the country.
The Korea Herald reported on April 20 that the Bank of Korea (BoK) would be authorized to examine operators of cryptocurrency-related enterprises.
The South Korean central bank has competed with the Financial Services Commission (FSC) over cryptocurrency jurisdiction. Nonetheless, the FSC will have an ultimate say in regulating the digital asset industry.
The Bank of Korea has expressed concern regarding hazards to financial stability posed by stablecoins and will now be able to request transaction data from cryptocurrency exchanges.
Last week, an official from the National Assembly’s Political Affairs Committee confirmed the BoK’s authority to request data from digital currency operators. On April 25, the FSC will convey its official position at a subcommittee meeting.
According to the report, the meeting will accelerate the implementation of South Korea’s virtual asset laws.
Kim Han-gyu, a lawmaker from the Democratic Party who proposed the country’s crypto regulations, the Crypto Assets Act, stated, “The Financial Services Commission admits that the Bank of Korea must have the right to request data, but it is refusing to include it in the bill.”
The South Korean government has been attempting to enact crypto legislation, but there have been disagreements between the central bank and the FSC regarding who should regulate it.
The FSC cautioned, however, that if the central bank regulates cryptocurrencies, it will convey the message that digital assets are on par with traditional finance. The chairman of the FSC has previously stated that he does not regard cryptocurrency as a financial asset.
The two institutions have been at odds over crypto regulations for the past three years. Officials from the Political Affairs Committee, a division of the State Affairs Commission, have accused the FSC of attempting to monopolize its position as a crypto regulator.
The most recent development means that the South Korean central bank and its financial regulator will have full access to transaction data and will be able to investigate crypto operators.
The FSC has recently been active in taking enforcement actions against crypto companies and, like the U.S. Securities and Exchange Commission, considers crypto assets to be securities.
Midway through 2022, the Financial Supervisory Service, which operates under the FSC, announced the formation of the Digital Assets Committee.
