By March 2024, the proposed amendment to South Korea’s virtual asset service provider reporting requirements is anticipated to take effect.
Amendments proposed by South Korea’s financial watchdog would require regulatory approval for new executives of crypto initiatives before their employment with crypto companies.
The Financial Services Commission (FSC) significantly altered its reporting obligations for virtual asset service providers (VASPs) on February 5. The proposal intends to grant the FSC the power to vet executives who join cryptocurrency companies.
The financial regulator would require crypto firms to disclose personnel changes if the legislation were to be implemented. This would prevent executives from commencing their positions pending FSC approval of their personnel change report.
Money Today, a local news outlet, projects that the amendment will be implemented by the conclusion of March 2024, subsequent to undergoing multiple procedures, which encompass an evaluation by the FSC and a review by the Ministry of Government Legislation. The revised ordinance will subsequently be implemented in VASP renewal reports and due during the latter part of 2024.
Furthermore, the proposed regulations would impact businesses’ ability to renew their VASP licenses. The amendments intend to grant the FSC the authority to halt the review process for VASP license registrations while its personnel are under investigation by local or international authorities.
The regulator in South Korea is soliciting public opinion regarding the proposed amendment. The proposal is open to public comment until March 4.
The regulators of South Korea have been implementing stricter regulations for the cryptocurrency industry. Decenter, a local news source, reported on January 15 that the Financial Intelligence Unit of South Korea is drafting legislation regarding cryptocurrency mixers.
The regulator endeavors to establish regulatory bodies akin to those in the United States in response to the increasing prevalence of cryptocurrency intermediaries utilized for money laundering.
The FSC expressed apprehensions earlier in January regarding the potential for illicit outflows and money laundering when South Koreans purchase cryptocurrencies on foreign exchanges. A legislative notice issued by the regulator on January 3 proposed changing its credit finance laws to prohibit residents from using credit cards to purchase cryptocurrencies.
