In recent news, the South Korea’s Financial Services Commission (FSC) is planning to enhance transparency for the businesses operating in the region. Reportedly, the government is implementing rules that mandate public disclosures of the results of supervision and inspections conducted.
According to local media reports, the FSC’s new rules applies to crypto and virtual asset inspections as well. Following the collapse of Terra ecosystem last year which sent shock waves through the industry, the authorities increased the scrutiny of the crypto markets.
Sources reveal that the current update highlight the previous announcement from the FSC to change the “inspection and sanctions regulations on reporting specific financial transaction information.” The related processes include not just virtual asset operators but financial companies, post offices, and casino operators as well.
According to the reporting guidelines, the revision mandates disclosing major details on the homepage. It also applies to the action taken by the Financial Intelligence Unit (FIU) or others.
Additionally, this action is necessary within ten days of the final notification of inspection results. The agency added that it would further expand the scope of disclosure with respect to inspections and sanctions against South Korea crypto operators.
Considering the types of major crimes related to virtual assets, we will present the main inspection items in advance and raise awareness in the market by disclosing cases of business operators’ violations and unfair practices from time to time.– Lee Yoon-soo, director of the FIU
Simultaneously, the FIU recently held a meeting with five local virtual asset services providers, supporting them in their endeavors. The agency will work with them to bolster compliance capabilities.
The goal is to reduce crypto-related crimes by ensuring that all stakeholders are on the same page and can plug loopholes where possible. Yoon-soo said that it was important to protect investors and establish market transaction orders.
Recently, the FSC mandated disclosure regimes for its employees’ crypto holdings. Details required include the type of crypto assets held, date of acquisition, quantity, and amount. This is to keep an eye over government officials’ engagement with crypto trading or investing.
The actions from the authorities are a result of the troubles from the increasing crimes and threats from digital assets. Recently, the parliament passed a legislation titled “Virtual Asset User Protection” prioritizing investors’ safety and preventing incidents that jeopardize customers’ funds along with prioritizing investors’ safety and preventing incidents that jeopardize customers’ funds.
Notably, the conditions for these digital assets companies include the need to insure customer funds, hold a certain percentage of reserve capital, and keep necessary records. Additionally, the regulators have also expedited the regulation process and especially stablecoin after the crash of the tokens.