The Financial Supervisory Service (FSS) in South Korea is working on regulations to complement the Virtual Asset Users Protection Act passed earlier in June. The FSS aims to have the new regulations in place by January, ahead of the law's enforcement. The regulations will cover listing procedures, internal controls, issuance and distribution of virtual assets, and the implementation of a virtual asset market supervision and inspection system. The FSS is collaborating with the Digital Asset eXchange Association (DAXA), consisting of major local crypto exchanges.



The Financial Supervisory Service (FSS) in South Korea is gearing up to introduce supplementary regulations for virtual assets, aligning with the Virtual Asset Users Protection Act enacted earlier this year. FSS Head Lee Bok-hyeon revealed that the new regulations are expected to be finalized by January, well in advance of the law coming into effect.


The upcoming regulations will encompass key aspects such as listing procedures, internal controls, and the issuance and distribution of virtual assets. Additionally, the FSS plans to implement a comprehensive "virtual asset market supervision and inspection system." This move is seen as a proactive step to address concerns related to the trading of foreign-issued cryptocurrencies, colloquially referred to as "burger coins."


Lee Bok-hyeon acknowledged that the legislation passed in June lacked the necessary regulatory detail, necessitating the formulation of supplementary rules. The FSS aims to work closely with the Digital Asset eXchange Association (DAXA), a consortium consisting of major South Korean cryptocurrency exchanges such as Upbit, Bithumb, Coinone, Korbit, and Gopax.


The collaboration with DAXA will involve discussions on various regulatory aspects, ensuring a comprehensive and effective regulatory framework for virtual assets. Lee emphasized the need for robust mechanisms, stating that the legislation passed in June established criminal liability for violations but fell short in providing adequate authority to the FSS. He highlighted the absence of related systems for screenings in the virtual asset sector, emphasizing the importance of addressing manipulation and unfair practices.


As part of the broader initiative to combat virtual asset-related crimes, South Korea's law enforcement plans to establish a Joint Investigation Centre for Crypto Crimes. This specialized unit, consisting of 30 personnel from various government agencies, including the FSS, National Tax Service, and Korea Customs Service, aims to enhance the investigative capabilities and regulatory oversight in the crypto space. The coordinated efforts underscore South Korea's commitment to fostering a secure and compliant environment for virtual asset trading.


(DEREK ANDERSEN, COINTELEGRAPH, 2023)