The South Korean financial regulator is set to appoint a number of new crypto officials, and forms a new crypto department. But its probable new chief has reiterated assertions that there will be no stay of execution for scores of crypto exchanges that could be forced to close as a result of its actions.
Per News1 and Newsis, the Financial Intelligence Unit (FIU), an agency of the Financial Services Commission (FSC), will establish a “virtual asset inspection division,” which will be charged with the “management and supervision of virtual asset service providers (VASPs),” such as “cryptocurrency exchanges.” The department will also be charged with helping build a regulatory framework for crypto policing and crypto-related anti-money laundering matters.
The division will initially comprise of nine members, but the shake-up will see the FIU hire 14 more staff members and overhaul its structure to accommodate the new crypto division.
The crypto sector will need to pay heed to the new department, as it will be the part of the FIU that conducts crypto exchange operating license application reviews, issues operating permits, and carries out monitoring and on-site inspections efforts.
The FIU also pledged to “improve the existing system” to provide “customer protection” for exchange users.
Meanwhile, Koh Seung-beom, the government’s choice for the soon-to-be-vacant position of FSC chairperson, has sent a stinging warning to the nation’s flagging crypto sector.
Exchanges and political opponents have pleaded with the FSC to grant them six months longer to prepare for new anti-money laundering and banking protocols. These protocols will come into force in under a month – on September 24 – but thus far only one exchange has filed the necessary paperwork.
As things stand, that means that as of the end of next month, South Korea’s 60+-strong crypto exchange sector will be reduced to a de facto monopoly. Even this would not be sure, as the exchange in question – the market-leader Upbit – faces a nervous wait while the FIU reviews its application. The process could take up to three months.
Seoul Kyungjae reported that Ko stated that there would be “no extension” to the deadline. Ko, who appears ready to shoulder the brunt of a looming “shutdown crisis,” added:
“We will quickly share relevant information and make a careful effort to minimize the damage caused to [crypto market] participants.”