South Korea’s financial authorities are preparing for the second phase of virtual asset legislation to regulate various aspects of the country’s crypto market, local media ChosunBiz reported on June 5.
This second phase of legislation will focus on regulating issues such as the issuance of virtual assets, addressing conflicts of interest that may arise during issuance, and establishing a stablecoin regulatory framework.
The National Assembly of South Korea ordered FSC to submit a report on cryptocurrency issuance.
Following the passage of the Virtual Asset User Protection Act, South Korean lawmakers ordered the country’s Financial Services Commission (FSC) to file a report on crypto issuance issues and the conflict of interest that “virtual asset operators generate during the issuance and distribution process” these assets.
Because of this, the financial bureau plans to initiate a research process aimed at resolving these conflicts of interest, regulating stablecoins, and setting standards for virtual asset evaluation, advisory services, and issuance.
FSC is considering expanding the Virtual Asset User Protection Act
In addition, the FSC is also considering expanding the Virtual Asset User Protection Act through decrees in response to the problems faced by local crypto investment platforms, Delio and Haru.
On June 13, Haru Investments suspended users’ withdrawals due to false information provided by an unnamed consignment operator. The other investment platform, Dellio, halted withdrawals on June 14 due to exposure to Haru.
Following this incident, South Korean prosecutors have banned the executives of these companies from traveling abroad.
At a July 3 meeting, the FSC reportedly stated it would consider drafting the Virtual Asset User Protection Act to cover virtual asset managers as these companies operate in a regulatory gray area, citing Helio and Daru’s withdrawal issues.
An unnamed FSC official said the regulator has held discussions with other financial institutions and ministries about the move.
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