South Korea takes the next step in virtual assets legislation with the launch of its second phase

In a move aimed at further strengthening regulations and protecting users in the cryptocurrency market, South Korean financial authorities are reportedly preparing to launch a research project for the second phase of virtual asset legislation in the country.

The second phase of the laws is to address the financing and issuance of cryptocurrencies

The recent passage by the South Korean Parliament of the “Virtual Asset Protection Law” laid the groundwork for strengthening user protection and regulating unfair business practices in the cryptocurrency industry. Now, the focus is on complementing these regulations by addressing issues related to financing and issuing virtual assets through Initial Coin Offerings (ICOs).

According to Korean-language business news outlet Chosun Biz, the Financial Services Commission (FSC) confirmed that a joint working group meeting on digital assets was held on July 3, during which discussions were held on the outlines of the second phase of South Korea. Crypto legislation.

The first bill on virtual assets, which includes provisions to protect users’ assets, regulate unfair business practices, and supervise and penalize powers for market operators, was passed during a plenary session of the South Korean parliament in June.

However, recognizing the need for more legislation, the lawmakers have asked the FSC to conduct research services to address the conflicts of interest arising from the issuance and distribution of crypto assets.

The research is expected to be completed in August

To this end, the FSC plans to order a research service for the second phase of the legislation as early as this month, with completion expected by August at the latest.

The research service will include such important aspects as resolving conflicts of interest, establishing regulations for stablecoins, implementing a regulatory system for evaluating virtual assets and advisory work, and establishing a unified standard for trading and issuing virtual assets.

According to Chosun Biz, concerns have been raised about the application of the existing legislative framework to virtual asset deposit and management operators. Its opacity has allowed some digital asset managers, such as Haru Invest and Delio, to bypass regulations, which has led to deposit and withdrawal disruptions recently.

Thus, the FSC will determine whether to regulate the depository business and the operation of the business through enforcement ordinances.