As the Virtual Currency Market Heats Up, Calls for Investor Protection Grow
It Takes Time to Introduce Industry-Specific Laws... Investor Protection Possible Through Amendments to Existing Laws
Kim Byung-wook, Chairman of the Subcommittee on Bill Review of the National Assembly's Political Affairs Committee, is presiding over the 1st Subcommittee on Bill Review meeting held at the National Assembly on the 23rd. Photo by Yoon Dong-joo doso7@
As Coinbase, the largest cryptocurrency exchange in the United States, successfully listed on the NASDAQ market, voices are rising in Korea calling for the enactment of a specialized law for the cryptocurrency industry to institutionalize the virtual currency market. However, since it will take a long time for such legislation to be implemented, there are also opinions that existing regulations should be revised first.
According to the related industry on the 16th, on the 9th, Kim Byung-wook, a member of the Democratic Party of Korea, held an online seminar titled "Why is a Cryptocurrency Industry Act Necessary?" together with the Korea Blockchain Association and CoinDesk Korea. At the seminar, the presenters emphasized the necessity of a cryptocurrency industry law. Representative Kim pointed out, "While changes in the cryptocurrency market are accelerating, related regulations are virtually nonexistent except for the amendment to the Act on Reporting and Using Specified Financial Transaction Information."
The reason why calls for a cryptocurrency industry law that defines virtual currencies and regulates industry behavior are increasing is to protect investors. As the cryptocurrency market has heated up recently, calls for investor protection have also continued. In fact, from January last year to last month, a total of 124 cryptocurrencies were delisted from the four major domestic cryptocurrency exchanges.
Japan has established a basis for crypto asset exchange businesses under the Payment Services Act and operates a whitelist system. Exchanges in Japan must undergo screening by the Financial Services Agency to list cryptocurrencies. Unlike Upbit, the largest domestic exchange with 178 cryptocurrencies listed, Coincheck, Japan's largest exchange, has only 16 cryptocurrencies listed.
However, there are also criticisms that the introduction of an industry law may not immediately address the problems of the cryptocurrency market. This is because it takes a long time for a bill to pass and be enforced. Professor Lee Byung-wook of Seoul School of Integrated Sciences and Technologies said, "It took two years just for the amendment to the Act on Reporting and Using Specified Financial Transaction Information to pass, and a one-year grace period was given. The industry law is likely to go through a similar process."
Therefore, there is an opinion that existing laws should be revised. Professor Lee said, "The amendment to the Act on Reporting and Using Specified Financial Transaction Information expanded the scope of regulation by changing Article 1's 'financial transactions' to 'financial transactions, etc.' If the scope of financial transactions defined in the Electronic Financial Transactions Act is also broadened, it will have the same effect as a cryptocurrency industry law." An industry insider also explained, "While the industry law is welcomed in terms of institutionalizing the cryptocurrency market, investors can be protected well by effectively utilizing existing laws."
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