FTX Fallout Adds Urgency to South Korea’s Push for Crypto Regulations: Report

An official at the Financial Services Commission says that unfair trade needs to be regulated.

AccessTimeIconNov 15, 2022 at 4:37 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Regulators stressed the need to have a regulatory framework in place during a meeting of South Korea’s National Assembly, given the failure of multi-billion dollar cryptocurrency exchange FTX, CoinDesk Korea reported on Monday.

The grouping was a follow-up to an emergency meeting held to protect investors after the collapse of Terraform Labs in May, the report said.

“As the market fell due to global austerity, Terra-Luna, Celsius and FTX failed one after another, making it a year of declining trust,” Lee Myung-soon, senior vice president of the Financial Supervisory Service (FSS), said at the meeting.

Kim So-young, vice chair at the Financial Services Commission (FSC) added that considering the urgency of protecting users, it was better to have minimum necessary regulatory standards in place and add to them, rather than waiting for international standards.

The FSS is responsible for examining and supervising financial institutions, under the broad oversight of the FSC which makes financial policy.

Kim said that the FTX crisis revealed the need to have regulatory mechanisms to prevent unfair trade and ensure virtual asset service providers fulfil obligations to protect user assets, and to forbid service providers from issuing tokens.

South Korea’s government officials are currently drawing up a comprehensive regulatory framework, the Digital Asset Basic Act, expected to be finalized next year. The act will be formed from 13 crypto legislative proposals currently before the National Assembly.

“Considering the rapid change in the digital asset market, the Financial Supervisory Service will actively support legislation through monitoring, so that overall regulations such as digital asset disclosure can be prepared,” Lee said.

Jey Kim contributed reporting.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Lavender Au

Lavender Au is a CoinDesk reporter with a focus on regulation in Asia. She holds BTC, ETH, NEAR, KSM and SAITO.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.