Crypto regulation is becoming a top priority for countries with emerging risk factors and recent banking sector turmoil in the United States. The South Korean parliament has decided to discuss crypto regulatory frameworks like investor protection and asset disclosure.
This is not the first time that the Korean authorities have made crypto regulation its top priority. In October 2022 South Korea’s financial services commission announced the guidelines for the monitoring of crypto holders of more than 100 million won ($347,000). The measures were taken for strengthening anti-money laundering (AML) laws.
According to recent reports, the Korean authorities are keen to implement the crypto regulation as soon as possible. The collapse of three major crypto-friendly banks in the United States, the Silicon Valley Bank, the Silvergate bank, and the Signature bank forced governments worldwide to review their existing crypto laws.
Around 15 million users currently use crypto in South Korea and have a cryptocurrency market worth 55 trillion won. The Korean parliament is looking for more sophisticated technology and smooth regulatory frameworks for cryptocurrencies in the proposed legislation. Protection of stakeholders and the financial system are necessary to frame any regulation.
There’s legislation related to cryptocurrencies pending in South Korea’s national assembly executive committee. In the particular legislation, 18 bills include 11 enactments on virtual assets and 4 on electronic financial transactions.
Amidst the banking sector turmoil, the Korean parliament wants to implement full-fledged crypto legislation by the end of this year. South Korea is considered a digital economy worldwide with advanced technologies and numerous cryptocurrency investors.
However, there are certain challenges before the implementation of regulations because of illegal crypto trading in the country. In 2022 a total of 15 illegal foreign exchange transactions worth 5.6 trillion won were caught by authorities.
South Korean authorities want a transparent atmosphere for the use of cryptocurrencies with certain preventive policies. The discussions regarding the proposed legislation will be made public in April in front of experts and other stakeholders to seek recommendations on the proposed cryptocurrency regulation.