The South Korean Central Bank is taking steps to increase its oversight of virtual asset service providers (VASPs) and cryptocurrency issuers.
To better monitor these entities, the Bank of Korea will now request transaction data from cryptocurrency exchanges, a move that has been approved by the Political Affairs Committee of the National Assembly.
The decision to tighten control over cryptocurrency issuers was prompted by concerns over the potential risks posed by stablecoins, which were highlighted by the collapse of the Terra ecosystem and resulting losses suffered by investors.
The aim of this increased regulation is to protect investors and create a more stable environment for the digital asset industry in South Korea.
The South Korean Financial Services Commission (FSC) will ultimately have the final say on the regulation of the digital asset industry.
However, there is ongoing debate between the FSC and the Bank of Korea over which entity should have oversight powers.
While the FSC has been accused of over-regulating crypto assets, the Bank of Korea believes that it should have the right to request transaction data from cryptocurrency exchanges.
The outcome of this debate will be crucial in determining the future of the digital asset industry in South Korea.
Last year, the FSC announced that it would monitor investors’ crypto transactions worth more than 100 million won ($70,000) and began working on a bill to punish crypto exchanges for hiding information and manipulating prices.
By tightening regulations and increasing oversight, the South Korean government hopes to create a safer and more stable environment for investors and cryptocurrency issuers alike.