The South Korean government will step up the launch of a new regulatory body to police the crypto sector – and could fast-track its creation as a direct response to what it has dubbed the “terra (LUNA) incident.”
In an exclusive article, Newspim reported that the body, to be named the Digital Assets Committee (literal English translation), will be launched “as early as next month.”
The committee will operate separately from the existing Financial Services Committee (FSC) and the Financial Supervisory Service (FSS), the country’s two top (tradfi) financial regulators. The FSC and its Financial Intelligence Unit (FIU) currently police the sector. The FSC deals with the sector in general, and helps form policy, while the FIU polices crypto exchanges.
The new committee would likely be one of the first dedicated crypto regulatory bodies in the world, and will likely take sole responsibility for controlling the sector – although the handover of power from the FSC and FIU may be done in a phased manner.
The media report, quoting sources from the People’s Power Party – the party of President Yoon Suk-yeol – explained that the body “is expected to become a control center for policy creation and the supervision of the cryptoasset industry.”
The committee’s work will also center on the creation of the so-called Digital Assets Framework Act. This draft law, which is still in its formative stages, is Yoon’s brainchild, and will likely contain a large set of crypto-specific rules, as well as a number of pro-crypto business measures.
The creation of a regulatory agency of this size will also require no shortage of legislation, which will likely be forthcoming in the months ahead. Instead – the new committee will likely function on a temporary basis until its existence can be enshrined into law.
An official from the party was quoted as stating that the Digital Assets Committee would be “launched immediately” once Yoon had appointed a new Chair of the FSC.
The media outlet added that the party had “decided to launch the Digital Assets Committee hastily” as a result of the LUNA incident.
The party says that it hopes the body will help “minimize market confusion and enhance policy effectiveness” by “unifying the system of the departments currently in charge of sector.”
As well as the FSC and the FIU, other bodies – such as the finance ministry, the science and ICT ministry, and the Personal Information Protection Committee – currently govern certain aspects of the crypto industry.
The Digital Assets Commission is expected to create guidelines for the crypto exchange industry, and will reportedly focus on the following areas:
- listing/delisting criteria
- token monitoring and warning systems
- the monitoring of “unfair” trading practices and insider trading
- transparency and disclosure
- investor protection measures.