South Korea’s central bank has been given permission to increase its surveillance of cryptocurrency service providers and issuers as the government continues to debate virtual asset laws.
The Korea Herald stated on April 20 that the Bank of Korea (BoK) will be given the authority to probe operators of cryptocurrency-related enterprises. The South Korean central bank has been vying for crypto authority with the country’s financial regulator, the Financial Services Commission (FSC). The FSC, on the other hand, will have the last say in regulating the digital asset sector.
The Bank of Korea is concerned about the financial stability risks posed by stablecoins and will now be able to seek transaction data from cryptocurrency exchanges. An official from the National Assembly’s Political Affairs Committee affirmed the BoK’s power to request data from digital currency companies last week. The FSC will issue an official statement during a subcommittee meeting on April 25.
According to the article, the summit will hasten the implementation of South Korea’s virtual asset legislation. According to Democratic Party politician Kim Han-gyu, who introduced the country’s crypto rules, the Crypto Assets Act, “the Financial Services Commission admits that it is necessary for the Bank of Korea to have the right to request data, but it is refusing to include it in the bill.”
The South Korean government has been trying to push crypto legislation forward, but there have been disagreements between the central bank and the FSC about who should control it. However, the FSC warned that if the central bank regulates cryptocurrency, it will send the idea that digital assets are on par with traditional finance. The FSC chair has previously stated that he does not regard cryptocurrency as a financial asset.
For the past three years, the two organizations have been at odds over cryptocurrency laws. Officials from the country’s State Affairs Commission’s Political Affairs Committee have accused the FSC of attempting to monopolize its position as a crypto regulator.
The most recent step means that the South Korean central bank and financial authority will be able to probe cryptocurrency operators and have complete access to transaction data.
The FSC has recently been aggressive with enforcement actions against crypto businesses and, like the US Securities and Exchange Commission (SEC), considers crypto assets to be securities.
In mid-2022, South Korea’s Financial Supervisory Service, which operates under the FSC, announced the formation of an investigating body dubbed the Digital Assets Committee.