cryptocurrency companies that are operating within the country. This move has been initiated by the government as a part of its ongoing endeavors to regulate the cryptocurrency sector and prevent any illicit activities such as fraud and money laundering.
Bok in Charge of the Crypto
Under this new law, the Bank of Korea will be able to ask for any information from cryptocurrency exchanges and related businesses, as well as conduct on-site inspections. Furthermore, they can also impose fines and penalties for regulatory violations. This announcement has elicited mixed reactions from the cryptocurrency community.
Some view it as a necessary step towards legitimizing the industry and protecting investors, while others are apprehensive that it may hinder progress and lead to excessive regulation. South Korea has been a significant player in the cryptocurrency market, with high adoption and trading volumes. However, the government has been actively cracking down on the industry due to concerns about illicit activities.
The Bank of Korea’s recent decision is one of several regulatory measures put in place by the government. Last year, the country already passed a law requiring cryptocurrency exchanges to register with the Financial Services Commission and adhere to strict anti-money laundering protocols.
Dispute between FSC and BoK
As per the Democratic Party legislator Kim Han-gyu, the Financial Services Commission (FSC) recognizes the significance of empowering the Bank of Korea(BoK) to request data.
However, the FSC has decided against incorporating this provision into the bill. The South Korean government has been striving to enhance regulations for the crypto industry. Nevertheless, there have been disagreements between the FSC and the central bank concerning crypto jurisdiction.
According to the FSC, this new move could send a message that virtual assets hold the same status as traditional finance. It is important to note that the FSC chair has previously stated that he does not classify cryptocurrency as a financial asset. This disagreement over cryptocurrency regulations has been ongoing for the past three years between the two institutions. Officials from the Political Affairs Committee, a segment of the State Affairs Commission, have also accused the FSC of attempting to monopolize its role as a cryptocurrency regulator.