South Korea to Establish Virtual Asset Bureau for Monitoring Price Manipulation
In Brief
South Korean Financial Supervisory Service (FSS) plans to establish a Virtual Asset Bureau for supervision of virtual assets.
The South Korean Financial Supervisory Service (FSS) plans to establish a Virtual Asset Bureau, specifically responsible for the supervision, inspection, and examination of virtual assets. The newly established investigation team will have the power to probe “market manipulation” of virtual assets.
The Virtual Asset Bureau is expected to support the Financial Services Commission (FSC) in enacting sub-laws under the ‘Virtual Asset User Protection Act’ starting the beginning of 2024, while the inspection of virtual asset operators is expected to take place in the second half of the year.
It will also conduct inspections to ensure the legal compliance readiness of virtual asset operators.
There are currently 36 domestic virtual asset operators, including won and coin exchanges, wallet providers, and custody service providers, along with ‘Big 5’ exchanges targeted for FSS inspection. The newly established Virtual Asset Bureau, distinct from the previous Financial Intelligence Unit (FIU), will scrutinize property management, user protection, and transaction fairness.
Starting July 2024, the Virtual Asset Bureau will also carry out investigations into unfair trading practices such as market manipulation and the use of undisclosed information, marking the world’s first activity directed towards market manipulation in the virtual asset market.
However, there’s a potential delay as the FSS is yet to establish these investigation systems.
Virtual Asset Investigation Initiatives Across the World
Beyond the borders of South Korea, the United States’ Securities and Exchange Commission (SEC) conducts market investigations, specifically covering inquiries into the use of undisclosed information.
Other countries are still working in this direction, yet establishing regulatory frameworks that acknowledge and accommodate diverse uses of digital assets.
As a move towards regulatory transparency, the UK government has released a consultation paper outlining its plans to introduce formal legislation for crypto activities by 2024.
Switzerland adopted the Decentralized Ledger Technology Act in 2021, providing a legal basis for securities based on blockchains. Meanwhile, the EU is in the process of introducing the Market in Crypto Assets regulations (MiCA), aiming to capture and regulate all digital assets not already covered by existing legislation.
Other countries working on their own digital assets regulatory frameworks include Australia, Brazil, Dubai, Hong Kong and Singapore.
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
