Ruling Party and Government Discuss Measures to Protect Virtual Asset Investors and Stabilize Exchanges

Sung Il-jong: "Will Review Virtual Asset Issuance and Distribution System for Legalization"
Yoon Chang-hyun: "Approach in Two Phases to Balance Regulation, Promotion, and Support"
Kim So-young: "Establish Regulations for User Protection and Gradually Supplement"

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Hyun-ji] The People Power Party and the government sought legislative measures to protect virtual asset investors and stabilize the market on the 14th amid growing instability in the digital asset market following the Luna-Terra incident and the bankruptcy of cryptocurrency exchange FTX.

On the day, the party and government held a meeting hosted by the party’s Digital Asset Special Committee at the National Assembly to discuss these issues. Seong Il-jong, the policy chief of the People Power Party, stated, “Due to the instability caused by FTX, there is a renewed concern that instability in the domestic digital market may increase, so more meticulous and proactive responses are necessary.” He added, “We will first establish investor protection systems and then, considering global standards, thoroughly review the issuance and distribution systems of virtual assets and operational vulnerabilities of virtual asset exchanges to legislate accordingly.”

Yoon Chang-hyun, chairman of the party’s Digital Asset Special Committee, also referred to the FTX incident, saying, “If the virtual asset market had grown with all proper laws and systems in place, such issues would have been less likely to occur, but problems arose because it grew without adequate preparation.” He diagnosed, “If regulations are to be implemented, they must be done well, and support must also be provided properly, but it is difficult to strike a balance.”

He further proposed, “If attention is paid to regulating trading order and this is well organized, it would be good to move to a second phase involving promotion and various supports.” Introducing the ‘Act on Restoring Fairness and Creating a Safe Trading Environment in the Digital Asset Market (Digital Asset Act)’ which he sponsored, Yoon explained, “The reason we did not name it a ‘basic law’ is that before properly including promotion or listing regulations, we first incorporated amendments to the trading law and plan to approach it in two phases, moving to a basic law later.”

Kim So-young, vice chairman of the Financial Services Commission, related to this, said, “We need to seek a balance between innovation through new technologies such as blockchain, consumer protection, and financial stability,” and presented three principles: ▲ regulatory flexibility ▲ same finance, same risk, same regulation for consumer protection ▲ and global consistency.

Vice Chairman Kim added, “Since effective regulation requires consideration of international consistency, there are some limitations that require time,” but also noted, “Considering the urgency of user protection, rather than blindly waiting for international standards, it would be an effective alternative to first establish the minimum necessary regulations and then gradually and stepwise supplement them.”

Lee Myung-soon, senior deputy governor of the Financial Supervisory Service, also commented on these legislative movements, saying, “Considering the rapid changes and transnational nature of the digital asset market, the purpose is to restore market trust damaged by unfair trading practices and strengthen investor protection,” and added, “The Financial Supervisory Service will actively support legislation by continuously monitoring overseas legislative trends.”

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