South Korea is stepping up its regulatory oversight on cryptocurrency exchanges and virtual asset service providers (VASPs) with proposed amendments by the Financial Services Commission (FSC). These changes aim to enhance transparency and security within the crypto market by introducing stricter compliance requirements.
One of the key amendments involves mandatory regulatory approval for new executives in crypto firms before they can assume their roles. This measure is designed to prevent individuals with questionable backgrounds from influencing the industry. The FSC will also require crypto companies to report any changes in personnel, and executives cannot start their positions until they receive approval from the regulator. This new requirement is expected to come into effect by the end of March 2024, following reviews and resolutions by relevant authorities.
Additionally, South Korea is expanding its regulatory framework to include foreign VASPs operating within its jurisdiction. The Korea Financial Intelligence Unit (KoFIU) has mandated that offshore VASPs targeting South Korean users must register by September 24, 2024. Failure to comply could result in these platforms being blocked and their operations deemed illegal. This move aims to safeguard domestic users from unregistered and potentially fraudulent offshore platforms.
The proposed regulations also include obtaining Information Security Management Systems (ISMS) certification and using real-name accounts for transactions. This is part of a broader effort to combat money laundering and ensure the integrity of financial transactions within the crypto space.
These regulatory changes reflect South Korea's commitment to fostering a secure and transparent cryptocurrency market while balancing the need for innovation and investor protection. As the industry evolves, South Korean authorities are keen on setting a precedent for robust regulatory practices that other nations might follow.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
