A senior agency official revealed plans by South Korea’s Financial Services Commission (FSC) to introduce regulations for Bitcoin and other digital currencies, as well as to lift the blanket ban on initial coin offerings (ICO) in the country. The plans were discussed on Dec. 6, 2017.
In his statement at a public hearing of the National Assembly to tackle a proposed legislation for the creation of a legal framework on cryptocurrencies, FSC vice-chairman Kim Yong-beom confirmed the commission’s plan to regulate the local digital currency market in order to prevent illegal activities like money laundering and tax evasion.
He also claimed that the agency is closely monitoring the developments in the virtual currency trading markets and is prepared to impose tougher measures if required.
“The government doesn’t consider cryptocurrencies as money or financial products. We will regulate Bitcoins to curtail money laundering and tax dodging.”
In his statement, Yong-beom claimed that the agency may also lift the complete ban on ICOs that was implemented in late September 2017. He also mentioned that they may allow only professional investors to participate in the new model of raising capital for startup companies.
He said that the everyday retail investors will not be allowed to take part in ICOs for startups and companies’ financing using virtual currencies.
Meanwhile, the South Korean government is currently implementing regulations for the Bitcoin exchanges in its jurisdiction. Under the new rules, exchanges are required to comply with several consumer protection standards, as well as know-your-customer (KYC) norms in order to be allowed to operate in the country.
About the Korean Financial Services Commission
The Financial Services Commission is a government agency with the statutory authority over financial policy and regulatory supervision. The FSC’s functional responsibilities are shared among the Securities and Futures Commission (SFC) and subordinate bureaus.
Korea’s financial supervisory structure underwent major changes following the Asian financial crisis in 1997. To ensure effective and efficient supervision of all financial sectors, the Financial Supervisory Commission was established in April 2008 as an integrated supervisory agency with consolidating financial supervisory authorities across all financial sectors.
The Financial Supervisory Commission was reorganized into the current Financial Services Commission (FSC) on February 29, 2008 with the integration of the Financial Policy Bureau of the former Ministry of Finance and Economy. The FSC thus has the statutory authority to draft and amend financial laws and regulations and issue regulatory licenses to financial institutions.
In addition, the FSC oversees cross-border matters such as supervising foreign exchange transactions conducted by financial institutions to ensure their financial soundness. Korea Financial Intelligence Unit (KoFIU), which was also integrated into the FSC as part of the reorganization, leads the government’s anti-money laundering and counter-terrorism financial efforts.
The FSC contributes to the development and growth of the economy by advancing the financial industry, preserving financial market stability, enforcing fair market practices, and protecting financial consumers.
The FSC is responsible for formulating financial policies, supervising financial institutions and financial markets, protecting consumers,
and advancing Korea’s financial industry.