The Digital Assets Committee, which will function as the supervisory and controlling authority for virtual assets, including cryptocurrencies, will be established as early as June. The committee is expected to be in charge of policy development and oversight of the virtual asset business until the Framework Act on Digital Assets is enacted and a specialized government organization is established.
According to a Korean official, the Digital Asset Committee would be established soon following the inauguration of the new chairman of the Financial Services Commission, possibly as early as the last week of June.
The decision to form the Digital Asset Committee was made in haste, since the Terra (LUNA) crash highlighted the necessity for a trustworthy authority to represent the virtual asset business. The government is anticipated to reduce market uncertainty and strengthen policy efforts by combining South Korea’s system of competent ministries into a single state entity.
The Digital Asset Committee intends to develop market norms such as listing review criteria, significant item classification, unfair trading monitoring, a transparency system, and investor protection measures. Furthermore, five prominent Korean exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, would form a joint consultative body to the aforementioned committee in order to prevent a second LUNA catastrophe and to express their own views.
Investor safety comes first.
In South Korea, there has been an increasing desire for the development of a dedicated organization for virtual assets. This is due to the expansion of the virtual asset market necessitating crypto investor protection on par with stock investors.
Hwang Seok-jin, a member of the Special Committee on Virtual Assets and a professor at Dongguk’s Graduate School of International Affairs & Information Security, stated, “As of the end of last year, the daily transaction amount of virtual assets was 11.3 trillion won, which is similar to the average of KOSDAQ daily transactions, but there is no investor protection due to the absence of the system,” and suggested, “We should set up a government department to protect digital assets.”