South Korea’s Legislature Plans To Introduce A New Licensing System For Crypto

South Korea-based federal government commissioned a report that suggests that a licensing system covering the token issuers as well as exchanges should be adopted by the domestic industry to protect the investors. The report that was issued on the behalf of the FSC (Financial Services Commission) to the legislature of the country – the National Assembly – additionally recommends having the latest regulations to minimize wash trading, pump-and-dump schemes, as well as insider trading.

The exclusive regulations would be severe, and punishments for being negligent in abiding by them would be tougher as compared to those mentioned in the Capital Markets Act that is presently complied with by the crypto industry. On Tuesday, the Korea Economic Daily acquired a report that discloses the suggestion to develop a system of licensing to encompass the coin issuers like the firms that operate ICO (initial coin offerings) as well as crypto exchanges.

Several licenses with distinctive extents would be released based on the hazard involved. The coin issuers’ regulation via a resilient system of licensing counts to be the instantly required protection at present in the market. The respective status may be emphasized by the catastrophic market crash that originated from the Terra project’s fall. Do Kwon – the project’s founder from South Korea – may get summoned in front of the National Assembly to elaborate on what took place.

The coin issuers would be pushed by a recommended regulation to file a white paper under the FSC regarding the project thereof taking into account the details regarding the officers in the firms, the strategy that they have devised to utilize the funds collected via an ICO, as well as the description of the hazards that are linked to the projects. A minimum of seven days in advance of the time of the proposed modifications’ implementation, the respective updates should be incorporated into the white paper.

Even the firms with having their headquarters in foreign regions would additionally need to comply with the white paper-related rule if they intend to trade their tokens on the exchanges in Korea. Stablecoins were perhaps included in the FSC’s framework well before the issues that were witnessed in the previous week regarding USDT (Tether), DEI (Dei), and UST (TerraUSD).

Nonetheless, there are suggestions to implement some requirements on the asset management of the stablecoin issuers, dealing with the utilization of collateral by them as well as the permissible way as well as the number of the coins to be minted.

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