Everything You Need to Know About South Korea’s Crypto Regulation: The ‘2024 Work Plan’
South Korea has unveiled its groundbreaking ‘2024 Work Plan,’ signaling a significant shift in its approach to regulating virtual assets. This comprehensive plan aims to eliminate oversight and combat money laundering, outlining robust measures to reshape the cryptocurrency industry.
To strengthen oversight, the Financial Intelligence Unit (FIU) plans to take decisive steps to expel ineligible exchanges from the Korean won market. Hugo Philion, CEO of Flare Network, highlights the importance of these measures, stating that the plan aims to prevent ineligible exchanges from entering the market.
One of the key initiatives is the introduction of a preemptive transaction suspension system to address suspicious transactions promptly. Philion emphasizes the significance of this system, as it aims to prevent attempts to conceal criminal proceeds by swiftly suspending suspicious transactions.
The FIU also intends to expand reporting requirements and screening processes for virtual asset exchanges to enhance regulatory compliance. This includes conducting a comprehensive review of renewal reports and intensifying anti-money laundering inspections.
In line with international best practices, the FIU plans to adopt Financial Action Task Force (FATF) guidelines to implement preemptive suspension systems for suspicious transactions. Philion emphasizes that aligning with global standards underscores South Korea’s commitment to combating financial crime and ensuring the integrity of the crypto market.
In addition to the FIU’s measures, the Financial Services Commission (FSC) in South Korea proposes amendments for regulatory oversight. These include requiring new executives at crypto companies to obtain regulatory approval and granting more authority to the financial watchdog.
The proposed regulations have evoked mixed reactions from stakeholders. While some industry players welcome the increased oversight as a step towards legitimacy and investor protection, others express concerns about potential regulatory burdens stifling innovation.
South Korea is taking a proactive stance by fortifying regulations on virtual assets. With enhanced regulations and proposed amendments, authorities aim to curb market manipulation, illegal trading practices, and money laundering in the crypto market, ushering in a new era of responsibility and accountability.