Korea prepares to regulate cryptocurrencies: new laws and powers for the Financial Services Commission

South Korean lawmakers have approved a preliminary assessment of new laws that would give the country’s Financial Services Commission the power to investigate and monitor financial behavior related to “digital assets,” including bitcoin.

The proposed measures contain several provisions restricting the sale, storage and trading of cryptocurrencies, with a focus on consumer protection and compliance reporting.

Hwang Suk-jin, a member of the ruling People’s Power Party’s special committee on digital assets, told Forkast that “both the ruling and opposition parties have reached an agreement on the issue,” before predicting that the legislation will be passed by the end of the year.

Bank of Korea has been authorized to inspect local cryptocurrency businesses.

If passed, the law would be one of the most comprehensive national cryptocurrency regulations ever enacted. Exchanges and similar service providers will be required to segregate internal assets from customer assets, carry insurance, and maintain reserves for non-market losses.

The only documented exceptions are the central bank’s digital currency and assets directly related to the Bank of Korea.

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