The South Korean lawmakers is exploring a new cryptolicensing scheme
South Korean authorities have recently published a report with a slew of suggestions for how to effectively regulate the nation’s bitcoin business.
According to a paper prepared by the South Korean authorities, the local crypto business should establish a licensing structure for platforms and currency holders to the capital market.
The Financial Services Commission (FSC) has made a submission to the Constituent Assembly, which recommends additional measures to combat market manipulation, push and pull scams, and whitewash investing.
The proposed legislation would be more stringent, with stiffer punishments for non-compliance, than that of the Capital Markets Law, which the local cryptocurrency business already follows.
According to the Study Entitled of the Virtual Key Business Act method of gathering data privately by Korea Economic Daily on May 17, currency producers, including such organizations operating initial coin launches (ICO) and digital marketplaces, should be licensed. Depending on the project, several levels of licenses would be awarded.
The “highest critically needed safeguard” in the marketplace now is to regulate currency producers through a comprehensive licensing structure. The premature economic crisis triggered by the collapse of the Terra (LUNA) venture, whose South Korean inventor Do Kwon could see itself called well before the National Assembly to describe what happened, may bolster that viewpoint.
One proposed law would require coin producers to publish a white paper to the FSC regarding their enterprise, which would enter information about the industry’s officials, how the cash obtained through an ICO will be used, and the program’s dangers. Before suggested modifications could remain in effect, revisions to the white paper would have to be filed at least 7 days ahead of time.
Businesses with offices outside of Korea that only want their assets exchanged on Korean platforms must follow the white paper policy.
The FSC was possible considering stable coins that were before troubles with Terra USD (UST), Dei (DEI), and Tether (USDT) the other week (USDT). Yet, there have been suggestions to impose financial advisory criteria on stable coin issuers, along with how they handle security and how many tokens they can produce.
The study also intends to stop unscrupulous investment behaviour that has been blamed on regulated exchanges and coin producers for years. Secret dealing, price gouging, push and drop tactics, wash investing, and industry norm service charges were all considered rules.
An expert in the field addressing reporters in April told Cointelegraph that measures in the Global Investment Act may not be sufficient to adequately manage the bitcoin business.
Yoon Seok-yeol, the current leader of South Korea, was chosen in part because of his desire to learn more about the cryptocurrency sector. He said on May 3 that his administration will press through such a law that would prolong the tax-free position of bitcoin profits until a solid regulatory structure is in existence.
The research released this morning could be the first step toward President Yoon’s bitcoin sector foundation.
