Financial Services Commission to Oversee Virtual Assets... "Prohibition on Brokerage and Mediation of Self-Issued Coins" (Comprehensive)

[Asia Economy Reporter Park Jihwan] The Financial Services Commission has been designated as the main government agency to manage and supervise the virtual asset market, including Bitcoin.

On the afternoon of the 28th, the government announced the "Virtual Asset Transaction Management Plan" at the Seoul Government Complex, which includes this decision. The main point of this plan is to designate the Financial Services Commission as the main agency for virtual assets and to make every effort to prevent illegal activities caused by the expanding market size.

The government plans to promote the management, supervision, and institutional improvements of virtual asset service providers to enhance transaction transparency under the leadership of the Financial Services Commission. The FSC will primarily oversee the management, supervision, and institutional improvements aimed at enhancing transaction transparency. Related organizations and personnel will be reinforced within the FSC.

The FSC's management and supervision of virtual asset service providers will be conducted in two phases, before and after the reporting grace period (September 24) under the Act on Reporting and Using Specified Financial Transaction Information (hereinafter referred to as the Specified Financial Transaction Act). Until September 24, the FSC, the Financial Supervisory Service, and the Ministry of Science and ICT will provide consulting on reporting requirements and necessary improvements to encourage prompt reporting by virtual asset service providers. Once reports are received, they will be promptly reviewed to reorganize the market around early reporters.

After the reporting grace period, supervision of reported service providers will be strengthened. The focus will be on compliance with reporting requirements, anti-money laundering, prevention of embezzlement, and hacking prevention. In particular, unreported operators will face penalties of up to five years imprisonment or fines up to 50 million KRW. If transaction transparency is uncertain or anti-money laundering obligations are violated, sanctions such as fines or business suspension will also be possible.

Amendments to the enforcement decree of the Specified Financial Transaction Act will also be pursued. By the end of September, the FSC plans to amend the enforcement decree to prohibit virtual asset service providers from directly mediating or brokering the trading or exchange of virtual assets they have issued themselves. Additionally, an amendment banning virtual asset service providers and their executives and employees from trading virtual assets through their own service will be promoted. Furthermore, measures to increase the cold wallet storage ratio to over 70% to securely store virtual assets against hacking will also be considered.

An FSC official stated, "The reinforcement of virtual asset organizations and personnel is a matter to be discussed with the Ministry of the Interior and Safety in the future," and added, "Management of virtual asset service providers will be primarily promoted under the Financial Intelligence Unit (FIU)."

This content was produced with the assistance of AI translation services.