March 27, 2024
S. Korea Proposes FSC Screening for Crypto Execs
Latest Cryptocurrency News

S. Korea Proposes FSC Screening for Crypto Execs

South Korea’s financial regulatory body, the Financial Services Commission (FSC), has proposed significant amendments to virtual asset service provider (VASP) reporting requirements, focusing on personnel changes within crypto companies. The proposed change, presented on Feb. 5, seeks to grant the FSC authority to review and approve new executives joining crypto firms.

The regulatory move mandates crypto companies to report any changes in personnel to the FSC, and executives would require FSC approval before assuming their roles. The proposal aims to enhance regulatory oversight and is expected to be effective by the end of March 2024, following procedural steps, including review by the Ministry of Government Legislation and approval by the FSC. Once enacted, the rules will impact VASP license renewal reports in the latter half of 2024.

Additionally, the proposed regulations would influence the renewal of VASP licenses, enabling the FSC to halt the license review process if local or international authorities are investigating the company’s personnel. The amendments aim to fortify regulatory control over personnel changes within crypto companies and align with broader efforts to tighten cryptocurrency regulations in South Korea. The FSC is currently seeking public feedback on the proposed amendment, with a comment period extending until March 4.

South Korea has been progressively introducing stringent measures to regulate its cryptocurrency space. In January, the Financial Intelligence Unit, a regulatory body in South Korea, was reported to be developing legislation related to crypto mixers to combat the rising use of these tools for money laundering. The objective is to establish regulations similar to those in the United States, where crypto mixers are closely monitored.

Earlier in the same month, the FSC expressed concerns about potential illegal outflows and money laundering associated with South Koreans purchasing crypto from foreign exchanges. Consequently, on Jan. 3, The regulatory body issued a legislative notice suggesting changes to credit finance laws, aiming to disallow residents from purchasing cryptocurrencies with credit cards. These regulatory initiatives underscore South Korea’s commitment to enhancing oversight and addressing potential risks in the rapidly evolving crypto industry.

Photo by aboodi vesakaran

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