South Korea Steps Up Crypto Investigations and Regulations

On Friday, June 3, South Korea’s Financial Surveillance Service (FSS) began a survey of payment gateway services that work with digital ...



On Friday, June 3, South Korea’s Financial Surveillance Service (FSS) began a survey of payment gateway services that work with digital assets. The FSS is South Korea’s financial regulatory body that operates under the aegis of the Financial Services Commission (FSC), both of which are government institutions.

As local news outlet Money Today Co. reported, the FSS had recently demanded reports from 157 payment gateways on any crypto-related service, their plans for the future, and disclosure of digital assets. But an FSS report said only 6 held digital assets.

Related: How Terra’s Collapse Will Affect Future Stablecoin Regulations

Although the FSS is currently the main financial regulator, on May 31, 2022, South Korea announced the upcoming launch of the Digital Assets Committee. According to the announcement, it is a temporary solution to structure the virtual asset industry after the Luna-Terra crash.

According to the announcement, the guidelines include screening criteria for newly listed assets, market surveillance, transaction monitoring, a level of disclosure and other investor protections. The top five exchanges in the country appear to be in agreement on the standards and have formed their own committee to help prevent another Terra-like incident (LUNA).

Shortly after the FSS began its investigation, it announcement a remote meeting with other financial supervisors from five countries in the Asia-Pacific region. This event was organized by the Indonesian Financial Supervisory Service and also included Australia, China and Japan.

The meeting covered global market conditions as well as big tech and crypto. The Korean representative mentioned the need for cryptocurrency regulation, disciplinary action around virtual assets, and expanding financial regulatory frameworks.

On Tuesday, May 24, 2022, South Korean officials opened an investigation against Do Kwon, the main character of the Luna incident. Yoon Chang-Hyeon, chairman of People’s Strength’s Special Virtual Assets Committee, who had met with major exchanges in response, will lead the digital assets committee mentioned above.