The South Korean government is set to come good on a promise to launch a new regulatory agency that will govern the domestic crypto sector in the wake of what it calls the “Terra (LUNAC) incident.”
As reported in late May, the body has been tentatively named the Digital Assets Committee (literal English translation), and its creation has been fast-tracked.
The committee will liaise with the Financial Services Committee (FSC) and the Financial Supervisory Service (FSS), South Korea’s main financial regulators. Currently, the Financial Intelligence Unit (FIU), a branch of the FSC, governs crypto exchanges. It is not clear if the new committee will eventually take over this role, but its first tasks will almost certainly be policy creation-related.
Chosun Ilbo reported that the committee was on track to launch “before the end of the month,” and revealed that many of its founding members had already been appointed.
These reportedly include Ju Hyun-cheol, a lawyer who has previously worked on crypto policy for the offices of President Yoon Seok-youl. Also reportedly sitting on the committee will be Kim Gap-rae, a senior research fellow at the Capital Market Research Institute, as well as Park Seon-yeong, a Professor of Economics at Seoul’s Dongguk University.
Yoon made a series of crypto-related pledges both in the run-up to his election earlier this year and shortly after winning power. And the committee will be tasked with turning those pledges into legislation. At the center of these pledges was a commitment to create the nation’s first dedicated crypto-related law. Yoon also pledged to promote growth in the crypto sector – while ensuring tighter levels of investor protection.
However, despite previous claims that the new committee would act independently from the FSC and FSS, it appears that, initially at least, this will not be the case.
The FSC will supervise the formation of the Digital Assets Committee, and the latter will report to the FSC – much as the FIU does currently.
But, long-term, Seoul sees the new regulator as striking off on its own.
An unnamed government source close to the matter was quoted as stating that “as the cryptoasset market grows,” it was likely that the body will move out of FSC supervision and become a body that reports directly to the offices of the President.