South Korean Financial Watchdog the Korean Financial Service Commission has announced that it is planning on setting up an independent bureau that will look into all cryptocurrency-related matters in the country.
The Korea Financial Intelligence Unit (KFIU) will take on the legal responsibility and power to handle the agency. Apart from the bureau, the KFUI will also be setting up a “Policy Management Planning Division,” a part of the new bureau launch.
Don’t Consider Cryptocurrencies As Financial Assets
The announcement by South Korea comes just a day after one of the leading candidates to lead the Korean Financial Service Commission revealed that South Korea would not be considering cryptocurrencies as financial assets similar to traditional financial instruments such as fiat currencies.
The FSC Statement
A statement put out by the FSC stated that the Korea Financial Intelligence Unit would be managing the newly created bureau. The new entity, known as the “crypto-asset monitoring bureau,” will take on the responsibility of monitoring suspicious financial activity and transactions when it comes to cryptocurrencies. It will also be the final authority to decide the extension of cryptocurrency operators’ licenses and look into how investor protection rules can be enhanced.
The “Policy Management Planning Division”
The Policy Management Planning Division will also be a part of the soon-to-be-launched bureau. However, the planning division chief will only be taking on an advisory role and report directly to the chief of the KFIU. The FSC has also allowed the KFIU to get more personnel monitoring all crypto-related operations in the market.
The official from the FSC commented:
“The FSC’s decision for the creation of an independent bureau inside KFIU with increased personnel is aimed at checking and monitoring cryptocurrency-related financial activity and preventing potential money laundering.”
Younger People Currently Hold Half Of The Country’s Debt
Data provided by lawmakers showed that Korea’s younger population holds more than half of the country’s “household debt,” which they pointed out resulted from them investing in crypto and other crypto-centric assets.
The FSC has also partnered with other financial authorities to draft tighter regulations against cryptocurrencies and has given the crypto exchange operators in the country a window of 6-months to start using real-name trading accounts. Exchanges that fail to register with KFIU will have to cease their operations in South Korea. The newly created bureau will begin operations in September.
FSC Nominee Not On Board
The nominee for the Financial Services Commission has expressed his reservations against cryptocurrencies . Koh Seung-beom, a monetary policy board member from the Bank of Korea, was named the chairman of the Financial Services Commission. In an interaction with journalists, he conveyed his stance, stating that it is challenging to recognize cryptocurrency as a financial asset, stating:
“I understand that the Group of 20, the International Monetary Fund, other international agencies, and a considerable number of experts find it difficult to see virtual currencies as a financial asset and think they could not function as a currency.”
With more and more Koreans building a portfolio in crypto, the comments are in line with Koh’s commitment to curbing South Korea’s household debt.