South Korea has made important progress in the regulation of virtual assets. According to Korean media reports, the Korean Financial Supervisory Service is about to formulate a comprehensive set of guidelines covering the issuance, circulation and listing standards of virtual assets (cryptocurrencies).
At a discussion on the "Virtual Asset User Protection Act" hosted by Congressman Min Byung-deok, An Byung-nam, the digital asset research team leader of the Korean Financial Supervisory Service, said that the The formulation process of the guidelines was developed in close cooperation with multiple virtual asset exchanges, and after half a year of hard work, it is now nearing completion.
He emphasized that considering that this is the first regulation formulated for emerging markets, market diversity should be taken into account during the formulation process. The guidelines are designed to cover not just the local Korean market, but also consider the interactions and differences between Korea and the global market.
The "Virtual Asset User Protection Act" is a law passed by the Korean Congress in June last year to strengthen the protection of investors, and is planned to be officially implemented in July this year. The law consolidates 19 crypto-asset-related bills and clearly defines digital assets. In addition, the law provides for penalties for the use of inside information, market manipulation and unfair trading practices. The introduction of this law will further promote the healthy development of South Korea’s crypto asset market and protect the interests of investors.
Today’s Korean media reports pointed out that lawyer Cui Zhenhong is targeting the upcoming implementation of the “Virtual Asset User Protection Law” and its subsequent “Virtual Asset Commercial Rights Law” Comments were made. He is particularly concerned about the risks in the exchange’s business model, especially since its main source of income is transaction fees.
This may lead to exchanges supporting higher-risk virtual asset trading while ignoring unfair trading practices.
Virtual asset exchanges may support virtual asset transactions that cannot repay debts in pursuit of profits from high handling fees, thus leading to unfair transactions.
Therefore, Attorney Cui suggested that the exchange’s listing and delisting operations should be separated to reduce conflicts of interest and increase fairness and transparency in transactions. He suggested setting up independent review boards or self-regulatory organizations to carry out these functions.
In addition, he also suggested that the monitoring of abnormal transactions should be the responsibility of an independent agency, and suggested that market supervision work be entrusted to a third party or self-regulatory organization to further strengthen market supervision and self-discipline.
Considering the importance of establishing an international cooperation mechanism to investigate unfair trading practices, Attorney Cui also proposed the necessity of establishing a specialized legal agency. However, before amending the User Protection Law and establishing a new agency, it is recommended that each exchange entrust market supervision work to self-regulatory organizations.
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