- FSC South Korea mandates regulatory approval for new crypto executives before they assume roles.
- Proposed changes to VASP rules require firms to report executive changes for FSC approval.
- Amendments could affect VASP license renewals, with public feedback deadline set for March 4.
The Financial Services Commission (FSC) of South Korea has unveiled proposed changes that mandate new leaders of cryptocurrency initiatives to secure regulatory consent prior to assuming their roles within crypto enterprises.
On February 5, the FSC outlined a significant update to its rules for reporting by virtual asset service providers (VASP). This update is designed to empower the FSC with the capability to evaluate executives entering the cryptocurrency sector. Should this proposal become law, it would require cryptocurrency organizations to inform the financial oversight body about changes in their executive team. Consequently, executives would be barred from commencing their roles until the FSC has greenlit their personnel change submission.
According to the local publication Money Today, the amendment is anticipated to be enacted by the end of March 2024, following various stages including an assessment by the Ministry of Government Legislation and a decision from the FSC. Following the amendment of the ordinance, the new regulations will be applicable to VASP renewal applications slated for the latter half of 2024.
Moreover, the suggested regulations would impact the process for companies to renew their VASP licenses. The amendments seek to grant the FSC the authority to halt the review process for VASP license applications if the personnel involved are under investigation by local or international bodies.
The South Korean regulator is soliciting input from the public on this proposed amendment, with a deadline for comments set for March 4.
The push for stricter regulations in South Korea’s cryptocurrency landscape continues. On January 15, the local news source Decenter reported that the country’s Financial Intelligence Unit is crafting legislation targeting crypto mixers, with plans to align these regulations closely with those in the United States to combat the rising misuse of crypto mixers for money laundering purposes.
In early January, the FSC raised alarms over potential illegal capital flight and money laundering risks associated with South Koreans purchasing cryptocurrencies through foreign exchanges. On January 3, the regulator proposed a legislative update to its credit finance laws aiming to ban the purchase of cryptocurrencies with credit cards.
