2025 will see South Korea revealing the next stage of its regulations for cryptocurrencies during the second part of the year.
On the 15th of January, the Financial Services Commission (FSC) held their second meeting of the Virtual Asset Committee, discussing the upcoming stages of the Virtual Asset User Protection Act.
Key Legislative Tasks Under South Korea’s Next Regulatory Era
According to reports coming from the local news outlets, a significant meeting took place at the government headquarters in Seoul. The focal points of this gathering seemed to revolve around key legislative matters. More specifically, the Virtual Asset Committee presented several critical tasks for the upcoming phase.
For digital asset overseers, the initial duty of the committee involves enhancing rules regarding entry and operations. This aims to promote openness and shield users against dubious dealings.
Task number two centers around the development of guidelines for fair trading. This framework aims to create an open, clear system for listing and disclosing information to improve user safety. Proposals were made regarding the implementation of regular disclosure methods akin to those used in financial markets.
Additionally, it examined global tendencies in stablecoin regulations. Moving forward, the Virtual Asset Committee intends to scrutinize worldwide developments and regulatory structures related to these digital assets. The aim is to establish stronger requirements for stablecoin issuers, focusing on maintaining sufficient reserves and upholding redemption rights.
According to reports, Vice Chairman Kim So-young emphasized that South Korea needs to follow the global direction in regulatory matters. He pointed out examples like the European Union’s Virtual Asset Market Act (MiCA) and comparable regulations in Hong Kong and Singapore. Additionally, he mentioned that the U.S. has given priority to regulating stablecoins, an area of focus for South Korea as it moves into its next legislative phase.
According to reports in local media, citing Kim So-young, our regulatory system is striving for a unified legal framework. After 12 subcommittee meetings and discussions within the working-level task force, the policy review is almost complete. As soon as we can, we will present the results to the Virtual Asset Committee and make sure that any subsequent actions align with these findings.
The Forest Stewardship Council intends to establish task groups and subcommittees to scrutinize these initiatives, with the goal of drafting a comprehensive second-phase legislation by the end of 2025.
To start, the onset of South Korea’s regulatory period was signaled by the first phase of the Virtual Asset User Protection Act. As BeInCrypto detailed, this early stage brought about substantial advancements, such as Upbit revealing its operations in compliance with the newly enacted legislation.
Nevertheless, South Korea’s largest cryptocurrency exchange, Upbit, encountered antitrust probes, due to approximately 600,000 suspected KYC (Know-Your-Customer) infractions flagged by the FSC (Financial Services Commission). The investigation has sparked concerns over the platform’s operations, with Vice Chairman Kim advocating for a thorough regulatory revamp in response.
Addressing Past Controversies
South Korea’s regulatory path has had its hurdles. A significant incident occurred in 2019 when North Korea managed to steal 342,000 Ethereum (ETH) from Upbit, highlighting the importance of improved security measures. The Financial Services Commission is working to strengthen regulations by addressing these security loopholes while maintaining a balance between fostering innovation and ensuring stability.
The government has additionally disclosed intentions to remove the prohibition on corporations investing in cryptocurrency, demonstrating their dedication to encouraging institutional involvement in this sector.
Regardless of its high rate of digital asset removal from exchanges, South Korea remains a substantial contributor to the worldwide cryptocurrency market. According to BeInCrypto, it holds the third position among major crypto centers, following Dubai and Switzerland. Furthermore, South Korea experienced an increase in crypto transactions, demonstrating rising acceptance and public determination despite regulatory changes.
The Forest Stewardship Council (FSC) demonstrates a blend of innovation and consistency in dealing with the Virtual Asset User Protection Act. By cultivating an open and secure environment, South Korea aspires to take the helm globally in the regulation of virtual assets.
In the process of establishing a second stage for its cryptocurrency regulatory system, this nation is paving the way for similar moves in other countries, given the swift development of the digital asset marketplace.
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2025-01-15 18:29