Daniel Walker
South Korea has initiated discussions to draft the second phase of its cryptocurrency regulatory framework, with plans to finalize the legislation in the latter half of the year, according to local media reports.
The Financial Services Commission (FSC) convened a meeting on Wednesday to outline key priorities for the upcoming legislation, as reported by South Korean outlet Edaily.
During the meeting, FSC Vice Chairman Kim So-young highlighted the global momentum toward implementing crypto regulations aimed at safeguarding investors and minimizing legal ambiguities.
The countryโs initial crypto regulatory framework took effect in July last year following its legislative approval in 2023. It established stringent security measures for exchanges, requiring service providers to maintain at least 80% of user cryptocurrency deposits in cold storage separate from their operational funds to protect investors.
Kim emphasized the need for a broader, systematic approach in the forthcoming regulations, aiming to cover service providers, market participants, and crypto users alike.
Key Focus Areas for New Regulations
Among the primary topics discussed during the meeting were transparency in cryptocurrency listings on exchanges and aligning disclosure requirements for crypto firms with those imposed on traditional financial institutions.
The regulatory framework is also expected to address stablecoin management, reviewing international best practices for reserve asset management and establishing user redemption rights.
South Koreaโs Active Role in the Global Crypto Landscape
As home to one of the largest and most dynamic cryptocurrency markets globally, South Korea plays a significant role in shaping industry trends. Notably, local exchange Upbit ranked as the worldโs third-largest centralized crypto exchange by trading volume last month.
With this legislative push, South Korea aims to balance fostering innovation in the digital asset space while maintaining investor protection and market integrity.
