Lee Bok-hyun: "Strict Measures Will Be Taken Against Illegal Activities After Virtual Asset Law Enforcement"

Lee Bok-hyun, Governor of the Financial Supervisory Service. Photo by Younghan Heo younghan@

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Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), emphasized on July 7 that if any illegal cases are found after the enforcement of the 'Virtual Asset User Protection Act' on July 19, strict measures will be taken through focused inspections.

In his opening remarks at a meeting with about 20 CEOs of virtual asset service providers, including Lee Seok-woo, CEO of Dunamu, held at Front1 in Mapo, Lee stated, "Please fully prepare all aspects such as organization, systems, and internal control systems according to the roadmap presented by the FSS before the law is enforced."

This meeting was arranged to explain the FSS's roadmap ahead of the enforcement of the Virtual Asset User Protection Act on July 19. With the law's enforcement, virtual asset exchange operators must manage the deposits entrusted by virtual asset users for trading through banks. Additionally, more than 80% of the economic value of users' virtual assets must be securely stored offline, separated from the internet.

Lee said, "The virtual asset industry has experienced various controversies such as backdoor listings, price manipulation, and distribution volume manipulation disguised as hacking by issuing foundations under regulatory gaps," adding, "Please make thorough efforts to comply with the law along with strict listing reviews as the law is enforced."

Furthermore, Lee urged the virtual asset industry to do its best to protect users. He said, "In line with the purpose of the law's enactment, please cooperate to ensure that user asset protection is not compromised even if businesses transition or cease operations."

As part of this, Lee emphasized the industry's self-regulatory capabilities. He stated, "The 'Virtual Asset User Protection Act' contains only the minimum provisions for user protection, so some regulatory gaps are inevitable until the second phase of legislation. The market is rife with various illegal and unfair virtual asset activities such as coin leading rooms, illegal investment advice, and quasi-deposit-taking."

He continued, "Regarding illegal activities occurring outside the scope of law and supervision, please make efforts to restore market order by actively operating monitoring systems not only through the FSS reporting center but also within the industry."

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