The latest development in the South Korean crypto crackdown saw the South Korean Financial Services Commission (FSC) ban Virtual Asset Service Providers (VASP) and their employees from trading their platforms’ Native tokens.
The government has introduced this ban using the conflict-of-interest rule, followed by proposing a revision to the Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information. The proposal was further approved in lieu of encouraging and enabling further transparency in the crypto sphere, at a cabinet meeting held on September 28.
“The conflict-of-interest rule prohibits VASPs from trading virtual assets issued by their own platforms or by other specially related entities and restricts operators and staff members of VASPs from trading virtual assets via their own platforms. The measures are intended to prevent damages to users and improve transparency in virtual asset transactions.”
The FSC has given one month notice period. The commission noted that VASPs will be required to set forth internal control standards that will regulate insider trading. The time frame to set these standards will be one month from the date of the announcement. Failure to do will result in the suspension of services and will further lead to a fine of up to 100 million won, i.e., $85,000.
“VASPs are required to set up internal standards regarding the conflict-of-interest rule within one month. A failure to implement the rule may be subject to suspension of a business or up to KRW100 million in fine.”
South Korea moves past the crypto licensing deadline
Amid the expanding South Korean Crypto Crackdown, China’s top exchange, OKEx announced halting any further business expansion in the nation. Furthermore, Cryptocurrency derivatives exchange, Bybit also revealed the suspension of Korean language support from its platforms, along with its official South Korean community on social media from September 20 onwards, as licensing deadline of 24th September passes away.
South Korean Regulators are standing strong with their crypto regulations’ structure. The FSC demanded crypto exchanges to register with Korea’s anti-money laundering agency, the Financial Intelligence Unit, as well as obtain partnerships with banks to facilitate real-name accounts.