South Korea’s regulatory landscape for cryptocurrency is in a continuous state of change, with authorities taking a measured stance towards corporate investments in digital currencies.
On January 15, the Financial Services Commission (FSC) convened its second Virtual Asset Committee gathering, focusing on advancements in laws designed to protect crypto investors.
A key point of interest was the potential approval of corporate accounts for cryptocurrency trading, but this topic was postponed for further evaluation.
Deliberations on Corporate Crypto Investments Still Pending
During this meeting, the FSC reiterated its commitment to enhancing policies about corporate crypto trading accounts. While South Korea doesn’t outright prohibit these accounts, there’s been some hesitancy from banks to offer them due to "regulatory uncertainties."
Notably, this postponement happens as the FSC nears the end of its extensive policy framework review for corporate crypto accounts, a matter subject to detailed scrutiny over the past months.
This topic has been a central theme in twelve different subcommittee and task force discussions, according to FSC Vice Chairman Kim So-young. He mentioned, “We’ll soon report our findings and swiftly take the necessary steps forward.”
Despite a keen interest from the South Korean community for more clarity on corporate crypto investments, the regulatory body has chosen to concentrate on broader issues such as investor protection and regulatory supervision for now.
Regulatory Advances and Upcoming Actions
The meeting also delved into the second phase of South Korea’s crypto investor protection laws, which are set to become effective in July 2024.
While the initial phase focused on safeguarding users’ deposits and curbing unfair trading practices, the upcoming phase aims to tighten regulations around crypto asset issuance, distribution, and transparency.
Regulators are stressing the need for a well-rounded approach that takes into account the interests of businesses, marketplaces, and consumers. The committee also intends to develop a distinct regulatory framework aimed at stablecoin transactions and the businesses associated with them.
This initiative acknowledges the rising significance of stablecoins in the global financial landscape and highlights the necessity to manage their risks and opportunities within South Korea’s regulatory scheme. The delay in resolving the issue of corporate crypto accounts continues to leave the market in anticipation of definite guidelines.
In light of Kim’s remarks about concluding the review soon, there’s speculation about a gradual introduction of corporate trading accounts in the near future, with real-name account issuance expected to be a crucial element of this framework.
Such a development could encourage more institutional engagement in South Korea’s digital currency market, which has been gradually expanding despite facing regulatory challenges.
Image created with DALL-E, Chart from TradingView
