South Korean Regulators Set Crypto Guideline for 2022

  • South Korean regulators believe the crypto industry needs clear definitions and policies.
  • The Korea Exchange will operate a separate South Korean security token market.

The chief South Korean financial regulator, the Financial Services Commission (FSC), has announced the country’s plans to unveil its crypto guidelines by the end of 2022. The regulator made this known in a joint seminar with the Korea Exchange, Capital Market Research Institute, Korea Securities Depository, and the Financial Supervisory Service. The attendees convened to talk about the distribution and issue of security tokens on a national level.

The FSC determined that it was necessary to create separate guidelines in order to support the sound development of the market and industry since the nation’s current capital market and electronic securities system do not contain any legal definitions of non-standardized securities issued via blockchain.

The FSC will draft and release the security token guidelines in Q4 2022. Then, the regulator will move forward with amending current laws, including the Electronic Securities Act and Capital Market Act, to set up the “Security Token Discipline System.”

As part of the new arrangements, the Korea Exchange will run the market for digital securities, and the Korea Securities Depository will evaluate the tokens prior to their registration and listing. Regulators in South Korea are stepping up plans to expand the crypto market and set up guidelines for the industry. The country’s new government has set its sights on making the Asian country a crypto hub.

Last month, South Korea’s Financial Services Commission called for a quick review of crypto regulation in the country. The commission’s chair, Kim Joo-Hyun, announced that the agency plans to expedite its review of 13 laws pertaining to digital assets that are now being discussed in the country’s National Assembly.

Kim added that the regulatory body for the financial industry would implement institutional changes to establish a comprehensive strategy for blockchain development, investor protection, and market stability.

South Korea Cracks Down on Unregistered Exchanges

Amidst the growth of crypto activities in South Korea, authorities are working towards improving security and investor safety. As a result, regulators are cracking down on unregistered crypto exchanges. Crypto exchanges have until September 24 to register their operations with the appropriate agencies or risk legal action and other punitive measures.

The Financial Intelligence Unit (FIU)  is also set to ban 16 foreign exchanges, which it says have been operating without a license. Some of the exchanges include Poloniex, KuCoin, and Phemex.

Lawrence Woriji
Lawrence Woriji Verified Author

I have covered some exciting stories in my career as a journalist and find blockchain-related stories very intriguing. I believe Web3 will change the world and want everyone to be a part of it.

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