The implementation of comprehensive regulations for virtual assets by the FSS of South Korea reshapes the crypto landscape.
The forthcoming publication of exhaustive guidelines by the Financial Supervisory Service (FSS) will profoundly impact the trajectory of cryptocurrency regulation in South Korea.
This will be an instrumental moment in the oversight of virtual assets. The primary objective of the FSS is to establish a comprehensive framework that effectively addresses the concerns about issuance, circulation, and listing standards in the rapidly expanding digital asset market.
This advancement is consistent with worldwide endeavors to regulate cryptocurrencies, emphasizing South Korea’s dedication to promoting openness and thwarting unlawful operations within this domain.
South Korea Will Declare New Cryptocurrency Regulations
Unveiled on January 8, 2024, the Financial Supervisory Service (FSS) is causing a stir in the cryptocurrency industry by introducing ground-breaking guidelines for virtual assets.
Ahn Byeong-nam, the chief of the Digital Asset Research Team at the FSS, reportedly disclosed that the guidelines include issuance volume, circulation, and listing standards during a policy discussion (as cited in the report).
Due to the heterogeneous character of cryptocurrency markets, Byeong-nam underscored the importance of nuanced guidelines and emphasized the collaborative effort with exchanges.
Meanwhile, this announcement follows the disclosure in mid-October that financial regulatory authorities in South Korea were developing new regulations for the virtual asset market, including listing procedures, internal controls, and the volume of issuance and circulation. According to a previous report, the National Assembly commissioned extensive research that led to the development of these regulations.
Redefining The Crypto Landscape
The most recent action to disclose the listing and distribution guidelines is consistent with a larger pattern in the evolving cryptocurrency landscape of South Korea.
To mitigate potential misuse of funds and speculative activities, the Financial Services Commission (FSC) recently amended the Credit Finance Act, which imposes limitations on using credit cards in cryptocurrency transactions.
Significantly, this action is designed to restrict the ability of citizens to acquire cryptocurrencies on foreign exchanges, with explicit mention of apprehensions regarding the outflow of illicit funds, money laundering, and speculative conduct. The National Tax Service of South Korea also clarified its position on virtual assets, reassuring the proprietors of decentralized wallets.
In the meantime, this declaration reaffirms that users of decentralized, non-custodial wallets will not be obligated to disclose foreign financial accounts, offering reassurance amid apprehensions regarding reporting obligations. This decision is in response to the June 2023 inclusion of virtual assets in overseas financial account reporting by the National Tax Service.
Furthermore, commencing January 1, 2024, the South Korean government has ordered nearly 6,000 officials to divulge their cryptocurrency holdings to increase accountability and transparency. This action signifies a substantial advancement in the country’s digital asset management strategy, strengthening the dedication to ethical cryptocurrency administration.
