The South Korean financial authority is planning to employ many new crypto officers and establish a new crypto department. However, its likely incoming CEO has stated that there will be no stay of execution for the scores of crypto exchanges that may be forced to close as a result of its activities.
The Financial Intelligence Unit (FIU), a component of the Financial Services Commission (FSC), would establish a “virtual asset inspection section” tasked with “management and supervision of virtual asset service providers (VASPs),” such as “cryptocurrency exchanges.” The agency will also be tasked with assisting in the development of a regulatory framework for crypto policing and crypto-related anti-money laundering issues.
The division will initially have nine personnel, but the FIU will hire 14 more staff members and restructure its structure to fit the new crypto section.
The crypto sector should pay attention to the new department since it will be the section of the FIU that conducts crypto exchange operating license application evaluations, issues operating permits, and conducts monitoring and on-site inspections.
The FIU also promised to “upgrade the present system” in order to guarantee “consumer protection” for exchange users.
Meanwhile, Koh Seung-beom, the government’s choice for the soon-to-be-vacant position of FSC chairperson, has issued a harsh warning to the country’s faltering cryptocurrency sector.
Exchanges and political opponents have petitioned the FSC for an extension of six months to prepare for new anti-money laundering and banking regulations. These protocols will go into effect in less than a month – on September 24 – but only one exchange has filed the relevant documentation so far.
As things now stand, South Korea’s 60+ crypto exchange market will be reduced to a de facto monopoly by the end of next month. Even this would not be certain, as the exchange in question – the market leader Upbit – is still awaiting the FIU’s approval of its application. The entire procedure could take up to three months.
Ko stated that there will be “no extension” to the deadline. Ko, who looks to be bracing for the brunt of a future “shutdown crisis,” added:
“We will release important information as soon as possible and make every attempt to minimize the damage caused to [crypto market] participants.”