South Korea’s central bank could soon be empowered to scrutinize crypto platforms as the government steps up its regulatory action following recent troubles in the industry. A government Political Affairs Committee member has said a proposal that allows the Bank of Korea to demand documents to digital asset firms has been “all but approved”. However, dissent was high from the Financial Services Commission (FSC), which said such regulation could further blur the separation between nascent crypto markets and broader financial institutions. The FSC has since relented on this stance, however, and conceded investigative powers to the BOK.
Why regulation in South Korea matters
The current assessment of South Korea’s digital asset landscape presents somewhat of a mixed bag. The Asian jurisdiction is in the midst of creating a regulatory framework much like the one surrounding the established securities sector, where investment scams and insider trading practices are more strictly guarded against.
Despite deliberations seemingly taking their time, the interesting facet regarding authorities in South Korea is the raising of BOK’s remit regarding tighter monitoring over crypto platforms. Therefore, it will be closely linked and informed by its own future regulatory demands.
In the specific case of this report, the evident opinions surrounding verifying relevant documentation hasn’t been specified. However, expect forthcoming suggestions on how this measure will be enforced.
[h/t Pedro Solimano]