South Korea will enact New Measures for Blockchain Platforms

Key Takeaways

  • South Korea’s ruling People Power Party is planning to pass a law on blockchain platforms to improve crypto regulation.
  • According to reports produced by the party’s chief policymaker, the choice to enact the law is also to protect investors.
  • Upbit, Korbit, Bithumb, Coinone, and Gopax, five of the country’s top exchanges, raised their hands during the meeting to announce the formation of a joint consultative body to monitor compliance with prospective and current rules.

Given recent market turmoil that has shattered strength and sparked fears of a large-scale crypto outbreak, South Korea’s ruling party is actively considering new consumer safety measures.

Rep. Sung Il-jong of the People Power Party (PPP) said Monday that his party is considering proposing legislation for “blockchain-based platforms,” without specifying what is planned, to best protect investors.

During a party-government consultative meeting on digital assets on Monday, the minister expressed the government’s motives.

According to Yonhap News, Sung referred to segments already included in the special financial transaction law, which aims to regulate money laundering and terrorism financing, but said the law was not structured to deal with crypto particularly.

The PPP and its integrated Financial Supervisory Service (FSS), which supervises financial firms under direct command from the Financial Services Commission, will work to establish a self-regulatory system. This will occur in conjunction with the PPP’s plan to privatise the Postal Service.

Representatives from five of the country ’s most popular cryptocurrency exchanges, which includes Upbit, Korbit, Bithumb, and Coinone, shared their experiences during the meeting to introduce the creation of a combined advisory body that will actively seek to remain compliant with both recently introduced and existing rules.

In May, the cryptocurrency market was engulfed in fear, prompting authorities to act and raising the possibility of additional measures . The fall of the TerraUSD sent firestorms through the entire digital asset sector, prompting the possibility of regulatory requirements. 

The ruling party’s consideration comes on the heels of a cryptocurrency lender, Celsius, announcing that withdrawals and transfers from its platform will be halted due to “severe market situations.”

South Korea has set out to restructure many of its current fiscal and economic policies, including its approach to digital assets, with a newly elected government. Both South Korea’s PPP and FSS have rationalised some further toughening of regulations based on market conditions and election promises.

The formation of a regulatory regime overseeing the crypto market is an important factor, according to FFS chief Lee Bok-hyun, if the market is to encounter any “responsible growth.”

Given the complex and unpredictable nature of crypto, the FFS chief added that establishing a self-regulatory regime with the participation of “private experts” should also be considered.

According to the Financial Services Commission of South Korea, the cryptocurrency market in the country is worth over $42.9 billion.

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Shreya Bhattacharya

A journalist & writer exploring new topics every day!

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