The Bank of Korea (BoK) has been granted increased power to investigate cryptocurrency service providers and issuers, as discussions on virtual asset legislation continue in South Korea. According to a report by The Korea Herald, the BoK will now have the right to scrutinize cryptocurrency-related businesses and request transaction data from digital currency operators.
The BoK has been in competition with the country’s financial regulator, the Financial Services Commission (FSC), over who should govern the regulation of the digital asset sector. While the BoK has expressed concerns over the financial stability risks associated with stablecoins, the FSC has warned that if the central bank governs crypto, it will send the message that digital assets have the same standing as traditional finance.
Despite the ongoing debate, the BoK’s right to request data from crypto exchanges has been confirmed by an official from the National Assembly’s Political Affairs Committee. The FSC will express its official position at a subcommittee meeting on April 25, which is expected to accelerate the rollout of South Korea’s virtual asset laws.
The South Korean government has been trying to push forward crypto legislation, but there have been arguments between the central bank and the FSC over who should control it. Democratic Party lawmaker Kim Han-gyu, who proposed the Crypto Assets Act, said that while the FSC admits it is necessary for the BoK to have the right to request data, it is refusing to include it in the bill.
The latest development means that both the South Korean central bank and its financial regulator will have increased power to investigate crypto operators and have full access to transaction data. This move follows several years of disagreement between the two institutions over crypto regulations.
The FSC has been active recently with enforcement actions against crypto companies and takes the same position as the United States Securities and Exchange Commission in that it considers crypto assets securities. South Korea’s Financial Supervisory Service, which operates under the FSC, announced the creation of an investigative body called the Digital Assets Committee in mid-2022.
In conclusion, the South Korean government is continuing its efforts to regulate the cryptocurrency sector. The Bank of Korea has been granted more power to investigate cryptocurrency-related businesses, and the Financial Services Commission is expected to accelerate the rollout of South Korea’s virtual asset laws. Despite disagreements between the two institutions, both will now have full access to transaction data and be able to investigate crypto operators.