"Reducing Exchange Operational Risks and Establishing Transparency for Coin Listings: Drafting Legislation" [The Swamp of Bad Coins]

[Report on 316 Victims of Fraudulent Coins - <3>] Fraudulent Coin Prevention Law Reaches National Assembly
Sung Il-jong, Special Committee Chair on Virtual Assets of People Power Party
Prior Review of Operator and Investor Protection
Reducing Operational Risks of Exchanges Producing 'Fraudulent Coins'
Establishing Transparency in Coin Listing and Delisting
Will Propose Systematic Legislation

[Asia Economy reporters Gong Byung-sun and Gu Chae-eun] "We will create legislation aimed at reducing exchange operation risks and establishing a systematic system to enhance transparency in coin listings and delistings." Sung Il-jong, chairman of the People Power Party's Special Committee on Virtual Assets, said this in an interview with Asia Economy regarding solutions to the rapidly increasing cryptocurrency scams. He also predicted that institutionalization would bring market stability in the long term.

Regarding the finding from our in-depth investigation that a significant number of scam victims wanted "stronger regulations" (reported on June 23, '63.6% of scam victims support stronger regulations'), Chairman Sung said, "We can eradicate cryptocurrency scams through institutionalization." He added, "Recent cryptocurrency scam incidents occurred because the market was not legitimized," emphasizing the importance of bringing the cryptocurrency market into the light to enhance transparency and ensure fairer operation. He diagnosed that the government’s failure to provide basic guidelines for cryptocurrencies in a 'lawless zone' situation led to a surge in scam incidents producing victims.

On issues such as price manipulation by exchanges and market disorderly conduct (withdrawal bans, pyramid schemes, false disclosures), he mentioned, "Strong measures are necessary through institutional review for the establishment of a relevant industry law." According to our in-depth investigation, among scam victims, 70.8% experienced withdrawal bans, 25.6% pyramid schemes, 18.4% price manipulation, and 17.1% false disclosures. However, regarding some opinions that cryptocurrencies should be regulated under the Capital Markets Act, he said, "We will first conduct various reviews on the direction of regulatory focus and how to protect operators and investors."

He also emphasized the need for institutionalization from a long-term perspective. He said, "It is true that there are concerns that institutionalization might trigger a speculative frenzy," but "nevertheless, institutionalization will bring market stability in the long term." In our in-depth investigation, 47.5% of scam victims responded that cryptocurrencies are high-risk, high-return investment assets, but institutionalization would help move away from this perception.

He also mentioned that blockchain technology must be actively supported to promote the market. Since the blockchain industry is already advancing into various fields such as art auctions through Non-Fungible Tokens (NFTs) and virtual real estate, there is a growing call for support measures to nurture the technology. He pointed out, "New technologies based on blockchain are creating new forms of business models in the virtual world, but government ministries still have unclear definitions and names for cryptocurrencies," adding, "When a new industry emerges, it is the nation's responsibility to facilitate progress, such as by forming task force (TF) teams."

Chairman Sung promised to propose legislation aimed at developing the cryptocurrency industry based on opinions gathered through the People Power Party's special committee. He said, "Although the amendment to the Act on Reporting and Using Specified Financial Transaction Information (Special Financial Transactions Act) was implemented last March, there are many criticisms that banks are in charge of consumer protection, leaving investors in blind spots," and added, "We will create legislation that can develop the cryptocurrency industry and establish a systematic system to enhance transparency in cryptocurrency listings and delistings."