South Korea Passes New Bill to Pave Crypto Regulation Path
The new bill categorizes cryptocurrencies as digital assets and recognize crypto exchanges as financial businesses
After much deliberation in the past years, South Korea has recently taken important steps toward regulating the crypto space. Today, the National Assembly’s national policy committee passed a bill that will lead to effective crypto oversight, although it still needs the buy-in of lawmakers on the main floor.
The new bill officially categorizes cryptocurrencies as digital assets and recognizes crypto exchanges as regulated financial businesses. This is a significant step in the country that has long been at the forefront of cryptocurrency adoption and will have far-reaching implications.
More specifically, this regulatory framework will require cryptocurrency exchanges to report and to register with the South Korean financial regulator, the Financial Services Commission (FSC). They will also have to comply with strict Know-Your-Customer (KYC) rules, Anti-Money Laundering (AML) regulations, as well as customer verification policies.
As stated, exchanges will also have to beef up their security systems to continue operating. Existing cryptocurrency trading platforms will also be required to report to the FSC’s Financial Intelligence Unit (FIU), with those failing to be certified under the Information Security Management System (ISMS) will not be approved. This certificate is issued by state-owned Korea Internet and Security Agency (KISA) in order to strengthen security measures and comply with these new government-mandated regulations.