South Korea has announced that firms involved in digital assets and related products might soon be migrated to a brand new regulatory framework. According to the report, which claims a source from the government, the new framework will ensure regulations tailored to help investors. In the information, the new regulatory framework will specifically target known ills in the crypto sector. Some of the highlighted malicious activities include wash trading and insider trading, among others.
South Korea will move crypto from the Capital Market Act
According to the report, this new regulatory framework will command a stiffer penalty compared to the Capital Market Acts. Notably, the crypto sector and other related markets were grouped under the ministry under this act. The report noted that the process is still in a recommendation, while an adoption would see it focus on companies with crypto-related products like exchanges and the likes.
It also pointed out that there would be different licenses awarded in South Korea according to the importance of their service. The regulation of companies that offer crypto trading and custody services has been hinted at as one that needs the highest form of protection across the market. This narrative is bolstered by the market decline that is currently being spurred on by the massive crash of Terra’s crypto products.
A breakdown of the report
Reports across South Korea have pointed to the National Assembly calling on Terra founder Do Kwon to explain the situation surrounding the abrupt crash of his company’s token. One of the highlights of the regulation would see coin issuers submit a comprehensive list of the workers in the company in its Whitepaper to the FSC. The company will also be mandated to state what funds would be diverted in case of an ICO, and the risks of the projects should be highlighted in clear terms. If the company intends to make changes to the Whitepaper, they would be mandated to inform the agency seven days before the action.
The new rule would also see companies without roots in South Korea subjected to the regulation. Reports claim that the FSC was only looking towards crypto before the UST tragedy struck, forcing them to add stablecoins. The mandate also talks about eliminating shady practices that investors have levied on companies across the years. One of the reasons for the new update is that those at the top feel the Capital Market Act is not enough to oversee the crypto sector.
Source: https://www.cryptopolitan.com/south-korea-proposes-reg-for-crypto-firms/