South Korea is taking steps to protect investors by introducing regulations to prevent unfair trade in the crypto industry. The Financial Services Commission (FSC) has issued instructions to five major crypto exchanges in the country to delist and classify digital assets that have similar properties to that of securities. The implosion of the once-prominent Terra ecosystem tokens and other high-profile collapses of exchanges and lenders such as Celsius Network, Voyager Digital, Genesis, and FTX have greatly impacted the South Korean market.
In response to this, the FSC has called for setting up comprehensive crypto regulations. The DAXA – a crypto exchange group representing South Korea’s largest firms – will be tasked with collecting the necessary feedback from each company and delivering them to the regulator. The FSC has also stressed the need to revamp the regulatory system on “the issuance and distribution of fractional investment items and digital asset securities (security tokens).”
The Ministry of Justice in South Korea has also revealed plans to develop a crypto-tracking system called the Virtual Currency Tracking System to tackle money laundering initiatives and recover funds linked to criminal activities. The system is slated to be deployed in the first half of 2023, with the development of the tracking and analysis system starting in the second half of the year. The Korean police department has also increased the headcount for blockchain security experts to help strengthen its investigations.
