The South Korean government and financial regulators seem keen to ensure that May Land The collapse of the ecosystem, an event they have dubbed the “terra/LUNA incident”, is set to become a watershed moment for the cryptocurrency sector, with a host of new regulations to come. The new head of a leading regulatory body has led those who have promised to implement changes, calling for the creation of a system that gives investors more “fairness”.
Chief among the new regulations will be the imminent launch of a new government-appointed regulatory body tasked with policing the cryptocurrency sector. As reported, this body has been tentatively designated Digital Assets Committee (literal English translation), and could be released in the next two weeks.
The body, unlike most other financial regulators that also deal with traditional finance-related issues, will be entirely dedicated to policing the crypto market. It will also be in charge of forming the policy for the industry.
A joint council made up of the five largest crypto exchanges in the country will also debut in the coming weeks or months: upbit, bithumb, Coinone, korbitY gopax. This council will be tasked with making coordinated decisions on the inclusion and exclusion of tokens and, as reported by Donga A Ilbo, is now working on an industry-wide set of standards.
On Monday, the government and the ruling People’s Power Party held a meeting in the National Assembly on the issue of crypto politics following the “terra/LUNA incident,” according to Segye Ilbo. The parties said their aim was to “restore fairness to the virtual asset market” and “protect investors”.
Also present was the newly appointed head of the Financial Supervision Service (FSS) Lee Bok-hyeon, who has already vowed to make crypto regulation one of his top priorities.
Lee, who took office on June 7, was quoted as saying:
“We will closely review the impact of the spread of virtual currency on the stability of the financial system and on the protection of consumers. We will also seek to close the gap in investor protection until a public regulatory system is established.”
However, Lee also echoed the sentiments expressed by the ruling party, stating that while regulators and politicians should help create a “reasonable regulatory system”, the industry should be given the power to “self-regulate”. . The head of the FSS called for the “active participation of private sector experts”, arguing that it was necessary to “emphasize” the role of industry in regulation.
The five exchanges stated that they would not allow a “repeat” of the “investor confusion” that occurred in the wake of the crash, when each platform made its own decision to delist the LUNAC (formerly LUNA) token at different times – leading to the market chaos.
For its part, the People’s Power Party also expressed its intention to accelerate the implementation of the new legislation. Seong Il-jong, chairman of the party’s policy committee, was quoted as saying that the party was now working on the “Blockchain Basic Law” (literal translation) in a bid to “support the Industry 4.0 era.”
The head of the FSS and other officials at the meeting also confirmed that the Financial Services Commission The (FSC)’s own investigation into the issuer LUNAC Terraform Laboratories and the accident itself was still ongoing.
Prosecutors are also conducting their own investigation.
Much may depend on whether financial regulators can establish whether they might consider LUNA a security. Under existing South Korean law, securities can be regulated under the terms of the Capital Markets Law, the Chosun Ilbo reported. Tokens that are not classified as securities cannot be supervised by either the FSC or the FSS.
Lee stated that he would “investigate” the matter.
He also pledged to push “fairness” in the crypto ecosystem, stating:
“In trading crypto assets, on a large scale and [anonymous] transactions can cause information asymmetry and unfair trade. Action Needed [to address this].”
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