FTX Fallout Adds Urgency to South Korea’s Push for Crypto Regulations: Report

An official at the Financial Services Commission says that unfair trade needs to be regulated.

AccessTimeIconNov 15, 2022 at 4:37 p.m. UTC
Drive the Crypto Policy Conversation Forward
October 24, 2023 • Convene • Washington D.C.Where the industry establishes the digital economy’s legal, regulatory and compliance best practices for the future.Register Now

Regulators stressed the need to have a regulatory framework in place during a meeting of South Korea’s National Assembly, given the failure of multi-billion dollar cryptocurrency exchange FTX, CoinDesk Korea reported on Monday.

The grouping was a follow-up to an emergency meeting held to protect investors after the collapse of Terraform Labs in May, the report said.

“As the market fell due to global austerity, Terra-Luna, Celsius and FTX failed one after another, making it a year of declining trust,” Lee Myung-soon, senior vice president of the Financial Supervisory Service (FSS), said at the meeting.

Kim So-young, vice chair at the Financial Services Commission (FSC) added that considering the urgency of protecting users, it was better to have minimum necessary regulatory standards in place and add to them, rather than waiting for international standards.

The FSS is responsible for examining and supervising financial institutions, under the broad oversight of the FSC which makes financial policy.

Kim said that the FTX crisis revealed the need to have regulatory mechanisms to prevent unfair trade and ensure virtual asset service providers fulfil obligations to protect user assets, and to forbid service providers from issuing tokens.

South Korea’s government officials are currently drawing up a comprehensive regulatory framework, the Digital Asset Basic Act, expected to be finalized next year. The act will be formed from 13 crypto legislative proposals currently before the National Assembly.

“Considering the rapid change in the digital asset market, the Financial Supervisory Service will actively support legislation through monitoring, so that overall regulations such as digital asset disclosure can be prepared,” Lee said.

Jey Kim contributed reporting.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Lavender Au

Lavender Au is a CoinDesk reporter with a focus on regulation in Asia. She holds BTC, ETH, NEAR, KSM and SAITO.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.