The central government of South Korea asked for a report that said cryptocurrency exchange and token issuers should think about getting licenses to keep investors safe.
In a report to the National Assembly, the Financial Services Commission (FSC) asks for new rules to stop insider trading, pump-and-dump schemes, and wash trading.
The new rules would be stricter, and the penalties for not following them would be worse than those in the Capital Markets Act, which bitcoin companies in the U.S. already have to follow.
The “Comparative Analysis of the Virtual Property Industry Act” paper came out for the first time on Tuesday in the Korea Economic Daily. It says that companies that do initial coin offerings (ICOs) and exchanges for cryptocurrencies should get licenses to sell coins.
Under the plan, if you wanted to sell coins, you would need a license. Depending on how dangerous the area is, different permissions and levels of permissions would be given.
For Crypto investment or crypto trading check website Bitcoin smart
Most people think that a full licensing system for people who make coins is the “most important safety step” right now. The sudden drop in the stock market after the Terra project failed could support this point of view. Do Kwon, who made it in South Korea, could be asked to tell the National Assembly what went wrong.
One change would mean that people who make coins would have to send a white paper to the Financial Stability Commission explaining what they plan to do (FSC). The document would have to include information about the people who started the company, how it plans to use the money it gets from an initial coin offering (ICO), and the risks involved.
Before any changes could be made, updated copies of the white paper would have to be sent. This would take at least seven days. Even companies with offices in other countries that want to sell their tokens on Korean exchanges have to follow the rules in the white paper.
Stablecoins were likely on the FSC’s list of things to do before TerraUSD (UST), Dei (DEI), and Tether had problems this week (USDT). But some people want to limit what stable coin creators can do with their own money. If these rules are followed, people who make stable coins will know how to use collateral and how many stable coins they can make.
People have said for years that local money changers and people who make coins are in the business of doing dirty things. One goal of this investigation is to put an end to this idea. It wanted to stop things like “pump and dump,” “wash trading,” “insider trading,” and “manipulating prices.” It also took into account what businesses actually have to pay.
In April, Cointelegraph wrote about a professional in the field who talked to local media. This person said that parts of the Capital Markets Act might not be enough to run a bitcoin business well.
A new report says that South Korea will have set up a cryptography infrastructure by 2024.
President Yoon may use today’s research report as the first step in his plan to regulate the cryptocurrency industry.
The government wants to make the current infrastructure for moving between crypto and fiat currency more widespread. This will let more banks set up places where the two currencies can be traded. There are only four banks in South Korea that use the same service right now. The country’s government also wants to make NFTs official and put out a plan for regulating ICOs .
CBDC, which stands for central bank digital currency, is also being discussed. The Bank of South Korea finished the first part of its mock tests in January of this year. Before this, Yoon’s government confirmed that the leaked document is real but also said that the draft will need some changes before it is finalized.
Yoon Suk-yeol said on May 3 that until the Digital Asset Basic Act is passed, he would try to get the profits from investing in cryptocurrencies taxed. According to the latest rules for taxing cryptocurrencies, the South Korean government will charge a 20% tax on annual crypto profits of more than $2,100.
