South Korean officials are bringing out proposed amendments to the Digital Assets Bill in an effort to impose more control over cryptocurrency exchanges.
As reported by News1 Korea that to prevent another FTX disaster, Rep. Yoon Chang-Hyun, a People’s Power party member, drafted a proposal for an amendment that will increase the power of Financial Regulatory Agencies such as the Financial Services Commission and the Financial Supervisory Service instead of letting exchanges regulate themselves.
The report states that following the crypto market crisis, there is a demand for the Financial Services Commission to take over the regulation of “client deposits,” which had previously been left under the control of the private sector.
Additionally, to protect clients’ investments, the Financial Supervisory Service Governor will be given greater authority to keep an eye out for those who provide virtual assets, such as the authority to inspect virtual operators.
According to the National Assembly and political circles:
Rep. Yoon Chang-hyun of People’s Power plans to propose a revision to the digital asset safe transaction bill at the 1st subcommittee on legislative review of the National Assembly Political Affairs Committee held on the same day.
The Newly Proposed Digital Assets Act
Customers’ deposits will now be managed separately, and financial regulators will now have the power to stop unfair business practices, according to the amended Digital Assets Act. In addition, “trust and management methods were entrusted to the Presidential Decree.”
The newly proposed bill also stipulates that a digital assets operator cannot unilaterally confiscate a user’s deposit if the user has given their deposit to a management institution.
Financial authorities also took control of self-regulation on unfair trade practices, which had been left in the hands of existing virtual asset operators. Moreover, company owners cannot self-regulate; instead, they must adhere to the procedures decided upon and announced by the FSC.
Furthermore, the report also highlighted the FSC and FSS both share the duty of overseeing businesses engaged in digital assets. The FSC has the power to supervise whether they comply with orders or dispositions under the law. If necessary, it can also entrust some authority to the Governor of the FSS.
An official from the National Assembly said:
The bill was submitted to reflect on the FTX incident and prevent a recurrence, and the financial authorities’ influence was strong.