There were reports that the financial authorities proposed to the National Assembly a plan to reduce the scope of business by splitting the functions of domestic virtual asset exchanges. If realized, it could cause a big impact in the cryptocurrency industry, so it is drawing attention.
What's new: Maeil Business Newspaper reported on the 12th, citing anonymous figures in the domestic financial industry, that the Financial Services Commission and the Financial Supervisory Service delivered the 'Virtual Asset User Protection Act Subsidiary Opinion Implementation Report' to the National Assembly's Political Affairs Committee last month. This means that the business scope of each business entity should be reduced by splitting up tasks such as listing, trading, settlement, and storage of cryptocurrency exchanges.
Background of the problem: Recently, the domestic cryptocurrency industry appears to be busy preparing for the Virtual Asset User Protection Act , which takes effect on July 19th. This law is literally a bill that imposes various obligations on virtual asset business operators to prevent investors investing in virtual assets from being harmed by incorrect information.
What is most concerning is the issue of conflict of interest among virtual asset operators represented by exchanges. Domestic cryptocurrency exchanges directly screen the listed cryptocurrencies on their platforms, and in this process, there is a high possibility of price manipulation or use of undisclosed important information.
In fact , Shin Jin-wook, CEO of cryptocurrency exchange Bitsonic, was sentenced to seven years in prison for manipulating cryptocurrency prices and misappropriating funds in February this year . At the cryptocurrency exchange Coinone, working-level staff and executives in charge of listing colluded to pursue private interests, and were arrested and indicted by the prosecution in April of this year .
Important point: According to reports, financial authorities have submitted an opinion to divide the work of exchanges handling virtual assets into exchange business, listing business, depository business, custody business, and advisory business. The idea is to believe that the reason conflict of interest problems arise in the first place is because of the environment in which exchanges handle multiple tasks at once, and to prevent such incidents from occurring in advance.
What happens next: Although the financial authorities have expressed somewhat unconventional opinions, it seems unlikely that this plan will actually be promoted. The authorities also make it clear in the document that this is a long-term task.
In order to separate currently operating cryptocurrency exchanges in this way, several very specific bills must be passed through a process of collecting opinions from various industry stakeholders. Last year, when Representative Kim Nam-guk's cryptocurrency investment case received national attention , the National Assembly finally passed the Virtual Asset User Protection Act.
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