South Korea has recently enacted its first independent crypto bill to address the numerous scandals and scams plaguing its crypto industry. The bill, approved on June 29, 2023, aims to regulate the industry and protect investors.
Under the new legislation, the Financial Services Commission (FSC) will oversee the crypto industry, issuing licenses to crypto exchanges and investigating and penalizing crypto-related crimes. Additionally, crypto exchanges must now register with the FSC and meet specific financial and operational requirements.
The decision to pass the crypto bill was prompted by several high-profile incidents in South Korea’s crypto industry. In 2022, Do Kwon, the founder of Terraform Labs, experienced a collapse in the value of the Terra ecosystem due to the loss of peg of the TerraUSD (UST) stablecoin to the US dollar. Furthermore, the hacking of South Korean crypto exchange Upbit resulted in a $50 million loss of cryptocurrencies.
Regardless of the criticisms, the passage of the crypto bill represents a significant milestone in South Korea’s crypto regulation efforts. It is expected to have a substantial impact on the country’s crypto industry and will likely be closely observed by other nations grappling with their own regulatory frameworks.
Several countries, including South Korea, are strengthening their oversight of the crypto industry. The United States’ Securities and Exchange Commission (SEC) is actively combating crypto fraudsters. The European Union’s European Commission is proposing new regulations for the crypto sector.
China has imposed a complete ban on all crypto-related activities. Governments worldwide are increasingly recognizing the risks associated with cryptocurrencies. The long-term implications of these regulatory measures for the crypto industry are uncertain. The industry is entering a new era of oversight.
