South Korea’s financial watchdog has put forward amendments that would require new executives in cryptocurrency projects to obtain regulatory approval before assuming positions in crypto companies.
On February 5, the Financial Services Commission (FSC) presented a significant alteration to its reporting requirements for virtual asset service providers (VASPs). The objective is to grant the FSC the authority to review executives joining crypto companies. If this proposal becomes law, crypto firms would be obligated to report personnel changes to the financial regulator, and executives would need FSC approval before taking up their positions.
Local news outlet Money Today anticipates that the amendment will come into effect by the end of March 2024, following various procedures, including review by the Ministry of Government Legislation and approval by the FSC. Once the ordinance is revised, these rules will apply to VASP renewal reports to be filed in the latter part of 2024.
Furthermore, the proposed rules could influence companies’ ability to renew their VASP licenses. These amendments aim to grant the FSC the power to halt the review of VASP license registrations if local or international authorities are investigating the personnel of these companies.
The South Korean regulator is soliciting public feedback on the proposed amendment, and the public has until March 4 to provide comments on the proposal.
South Korea’s regulatory bodies have been progressively introducing stricter regulations for the cryptocurrency space in the country. In January, it was reported that South Korea’s Financial Intelligence Unit is working on legislation related to crypto mixers, aiming to establish regulations similar to those in the United States to combat money laundering associated with crypto mixers.
Additionally, the FSC expressed concerns in January about illegal capital outflows and money laundering when South Korean individuals purchase cryptocurrencies from foreign exchanges. To address this, the regulator proposed changes to its credit finance laws that would prohibit locals from buying crypto with credit cards, further tightening oversight in the crypto sector.
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