South Korea’s financial watchdog has proposed changes requiring new executives involved in crypto projects to obtain regulatory approval before starting work at crypto companies. On February 5th, the Financial Services Commission (FSC) proposed significant changes to the reporting requirements for crypto asset service providers (VASP). The proposal aims to give the FSC the authority to screen executives joining crypto companies. If the law is enacted, it will compel crypto firms to report personnel changes to the financial regulator.
Noteworthy Details of the Process
However, executives will not be able to start their positions until the FSC approves the personnel change report. The local news source Money Today expects the changes to come into effect by the end of March 2024, after going through various procedures, including review by the Ministry of Government Legislation and the decision of the FSC. After the regulations are revised, the rules will apply to VASP renewal reports to be made in the second half of 2024.
The proposed rules will also affect companies’ abilities to renew their VASP licenses. The changes aim to give the FSC the authority to suspend the review of VASP license records if local or international authorities are investigating the personnel.
South Korea’s regulatory authority is seeking public feedback on the proposed changes. The public has until March 4th to comment on the proposal.
South Korea and the Crypto Industry
South Korea’s legal regulatory bodies are moving to introduce stricter regulations for the crypto space in the country. On January 15th, the local publication Decenter reported that South Korea’s Financial Intelligence Unit is working on legislation related to crypto mixers. The regulatory body aims to introduce similar regulatory laws to those in the United States as the use of crypto mixers for money laundering increases.
In early January, the FSC expressed concerns about illegal outflows and money laundering that could occur when South Koreans purchase crypto from foreign exchanges. On January 3rd, the regulatory body issued a legislative announcement proposing a change in credit financing laws that would ban locals from purchasing crypto with credit cards. South Korea may continue to take stricter steps in this area.
