Apparently, a new Digital Assets Framework Act (literal translation) will deal with issues pertaining to “non-security tokens,” while crypto assets that are categorised as securities will be governed by the terms of the current Financial Investment Services and Capital Markets Act, according to a South Korean news outlet.
According to reports, political leaders are optimistic that the act will be unveiled before the year is over.
Therefore, in response to the “Terra/LUNA event,” they will take action to control stablecoins. Seoul, however, wants to follow the lead of its international peers, especially when it comes to stablecoin legislation. The FSS and other authorities have repeatedly emphasised that a policy must be developed “in a manner that is consistent with overseas regulations.”
A new crypto task force was also established today by the Financial Services Commission, the primary financial regulator, with the goal of formulating policy recommendations before the creation of the new act.
There has been an agreement among policymakers and regulators that “the regulation of stablecoins” needs to be “strengthened,” according to Lee Bok-Hyeon, the head of the FSS. However, according to Lee, discussions “between global authorities” about “various issues” involving crypto assets are “ongoing.”
The abrupt detachment of TerraUSD from its U.S. dollar peg in May caused overexposure for a number of hedge funds and exchanges, with repercussions felt throughout the whole industry. In the same month, some South Korean investors in Luna (LUNA) complained against Terraform Labs and co-founder Do Kwon, accusing them of defrauding investors and violating local securities laws.
Yoon Chang-Hyeon, a member of South Korea’s ruling party and the head of the special virtual assets committee of the parliament, mentioned the Terra incident in a Facebook post in which he also promised to check for investor safety measures.
The National Assembly had been called to an urgent meeting by Chang-Hayeon to request that the house members officially launch an investigation into the Terra incident.
Do Kwon, the founder of Terraform Labs, is being investigated by the government on suspicion of tax evasion.