The Financial Supervisory Service (FSS) announced on the 30th that it held an industry meeting in preparation for the enforcement of the Act on the Protection of Virtual Asset Users.
On the day, Lee Myung-soon, Senior Deputy Governor of the FSS, stated, "In light of issues such as the Terra-Luna incident and the FTX bankruptcy, which have highlighted problems like lack of transaction transparency and inadequate management systems in the virtual asset market, the enactment of the Act on the Protection of Virtual Asset Users is timely," adding, "We expect this to be a good opportunity to prevent user damages and restore market trust."
The National Assembly's Political Affairs Committee emphasized the concern over regulatory gaps until the final bill is enforced and requested active cooperation from the industry, highlighting the need for improvements in self-regulation such as monitoring abnormal transactions and establishing transparent listing procedures.
Deputy Governor Lee explained, "Above all, in accordance with the purpose of the law, we plan to establish a supervisory system with related agencies such as the Financial Services Commission to ensure that virtual asset supervision, inspection, and investigations into unfair trading can be conducted efficiently immediately upon enforcement," adding, "To this end, we also plan to prepare a market monitoring system for virtual asset transactions, including on-chain data."
He continued, "Currently, there are limits to responding to various unfair and illegal activities occurring in the virtual asset market solely through market self-regulation," and said, "Even before the law is enforced, the financial authorities will make active and continuous efforts, such as establishing a reporting center, to promptly establish market order and prevent damages."
During the meeting, discussions were held on the 'Current Status and Future Plans of Self-Regulation by Virtual Asset Exchanges' and 'Plans for Establishing a Supervisory System for the Virtual Asset Market.'
Regarding the current status and future plans of self-regulation by virtual asset exchanges, Kim Jae-jin, Vice Chairman of the Digital Asset Exchange Joint Council (DAXA), stated that the Trading Support Division has promoted the establishment of common guidelines for trading support reviews and plans to develop risk indicators and monitoring methods by virtual asset type, as well as establish common guidelines for terminating trading support in the future.
He added that the Anti-Money Laundering Division is developing common types of suspicious transaction reports and preparing risk assessment guidelines for virtual asset service providers, while the Market Surveillance Division is discussing the introduction of a virtual asset alert system. Additionally, the Compliance Division has been working on establishing standard internal control standards and inserting warning statements in advertisements, and plans to promote a code of ethics for operators and a compliance manual. The Education Division has produced and distributed videos on investment precautions and crime prevention related to virtual assets and is conducting investor protection and education activities.
Furthermore, Kim Bu-gon, Director of the Digital Financial Innovation Bureau at the FSS, stated that to establish a supervisory system for virtual assets, they will support the enactment of subordinate legislation and promote improvements in market self-regulation.
They plan to actively participate in discussions on subordinate regulations promoted by the Financial Services Commission and jointly review supervisory, inspection, and unfair trading investigation systems in preparation for the law's enforcement. If necessary, a provisional task force for investigating unfair trading in virtual assets, including market experts, will be operated. When virtual asset service providers develop self-regulation improvement plans, the FSS will also provide policy consulting and other support through the 'Virtual Asset Risk Council' regarding these improvement plans.
Meanwhile, the meeting was attended not only by exchanges operating in the Korean won market but also by those in the coin market, who participated in discussions on self-improvement and supervisory plans.
An FSS official said, "There was active exchange of opinions among participants, and the FSS will actively refer to the discussed contents to do its best to protect virtual asset users while also making every effort to establish a transparent and sound trading order," adding, "We will faithfully promote improvements in self-regulation by virtual asset service providers in accordance with the supplementary opinions on the Act on the Protection of Virtual Asset Users requested by the National Assembly's Political Affairs Committee."
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