South Korea is gradually promoting corporations to explore VDAs
Donald Trump’s pro-crypto vision has opened dialogue on VDAs
The FSC will also be regulating stablecoins, crypto-related transactions
FSC’s upcoming guidelines will clarify rules to handle corporate criminals as well
Photo Credit: Pixabay/ Big_Heart
South Korea's Financial Services Commission (FSC) has announced that it will be adding more layers to its crypto regulations over the next month. The guidelines for corporate firms' participation in cryptocurrencies will be finalised by April, the FSC said Wednesday. The rules will allow professional investors and listed corporations to safely engage with virtual digital assets (VDAs), dodging the risks linked to the volatile market.
The FSC said it conducted a meeting with experts from the virtual asset industry to discuss supplementary measures that could keep institutional investors safeguarded against scams, hacks, and market fluctuations among other risks.
Kim So-young, the vice chairperson of the FSC, chaired the meeting. He said that US President Donald Trump's pro-crypto actions had sharpened dialogue on the institutionalisation of VDAs. According to him, the crypto sector could be given a fair margin to grow only after computer system security was strengthened and rules to prevent money laundering were put in place.
“Following the inauguration of the Trump administration, our Ministry of Foreign Affairs is also accelerating the establishment of a virtual asset system for ‘user protection' and ‘virtual asset market development' centered on the ‘Virtual Asset Committee.',” the agency quoted So-young as saying.
FSC's upcoming guidelines will clarify rules to handle corporate criminals as well as methods to disclose and report virtual asset transactions. Details on these guidelines remain undisclosed for now.
South Korea is gradually promoting corporations to explore the VDA market, presently valued at $2.65 trillion (roughly Rs. 2,31,11,842 crore). The nation recently implemented the ‘Virtual Asset User Protection Act' to strengthen investor safeguards, and decided that large investors, too, should get a chance to explore the sector under FSC's oversight.
Last month, the agency had said that once these guidelines were finalised, the country would start allowing select institutional investors to open real name trading accounts for VDA engagements. Eligible corporations would need to hold a balance of KRW 5 million (roughly Rs. 3 lakh) to KRW 10 million (roughly Rs. 6 lakh) in financial investment products to qualify for the pilot programme.
The country has also begun the preparation of the ‘Virtual Asset 2nd Phase Integrated Act', as per the FSC. This will focus on regulating stablecoins and crypto-related business transactions.
“We are actively supporting discussions on legislation related to the reorganisation of the token issuance and liquidity regulation system (amendment of the Capital Market Act, etc.) and promoting legislation related to virtual assets that reflects global regulatory trends,” the FSC said.
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